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on History and Philosophy of Economics |
| By: | Kevin Hoover |
| Abstract: | The potted histories of macroeconomics textbooks are typically Keynes-centric. Keynes is credited with founding macroeconomics, and the central developments in the field through the early 1970s, including large-scale macroeconometric models are usually termed “Keynesian.” The story of macroeconomics is framed as support or opposition (e.g., monetarism or the new classical macroeconomics) to Keynes. The real story is more complicated and involves at least two distinct threads. Keynes was important, but perhaps more important for the detailed development of the field were the early macroeconometricians – Ragnar Frisch and Jan Tinbergen. Frisch and Tinbergen adopted physical or mechanical metaphors in which aggregate quantities are central. Keynes’s vision of macroeconomics is better described as “medical.” It is based in human psychology and individual decision-making and sees the economy as an organic system. Whereas policymakers and economic advisers in Keynes view can operate only within the economic system, Frisch and Tinbergen laid the basis for an optimal-control approach to economic policy in which the policymaker stands outside the system. Recent new classical macroeconomics has adopted an uneasy amalgam of the medical and mechanical metaphors. |
| Keywords: | macroeconomics, Keynes, Frisch, Tinbergen, Klein, macroeconometric models, macroeconomic policy |
| JEL: | B22 B23 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2013-03&r=hpe |
| By: | Kevin Hoover |
| Abstract: | Modern growth theory derives mostly from Robert Solow’s “A Contribution to the Theory of Economic Growth” (1956). Solow’s own interpretation locates the origins of his “Contribution” in his view that the growth model of Roy Harrod implied a tendency toward progressive collapse of the economy. He formulates his view in terms of Harrod invoking a fixed-coefficients production function. This paper, first, challenges Solow’s reading of Harrod, arguing that Harrod’s object in providing a “dynamic” theory had little to do with the problem of long-run growth as Solow understood it, but instead addressed the medium run fluctuations. It was an attempt to isolate conditions under which the economy might tend to run below potential. In making this argument, Harrod does not appeal to a fixed-coefficients production function – or to any production function at all, as that term is understood by Solow. The paper next traces the history of the dominance of Solow’s interpretation among growth economists. These tasks belong to the history of economics. The paper’s final task belongs to economic history. It offers an informal reexamination of economic history through the lens of Harrod’s dynamic model, asking whether there is a prima facie case in favor of Harrod’s model properly understood. |
| Keywords: | economic growth, Roy Harrod, Robert Solow, dynamics, dynamic instability, dnife-edge, warranted rate of growth, natural rate of growth |
| JEL: | B22 O4 E12 E13 N1 B31 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2013-02&r=hpe |
| By: | Degens, Philipp |
| Abstract: | In der gegenwärtigen Wirtschafts- und Finanzkrise werden wieder vermehrt Alternativen zum bestehenden Geldsystem diskutiert. Das vorliegende Discussion Paper bietet einen Literaturüberblick zu ausgewählten alternativen Geldkonzepten. Zum einen werden Ansätze der Systemergänzung durch Komplementärwährungen identifiziert, welche meist auf lokaler oder regionaler Ebene Dysfunktionalitäten des staatlichen Geldes ausgleichen wollen. Zum anderen werden verschiedene Vorschläge zur umfassenden Systemreform diskutiert, bei denen die Steuerung der Geldmenge entweder zentral durch gestärkte Zentralbanken oder dezentral durch die Marktteilnehmer selbst vorgesehen ist. Der vorliegende Bericht zeigt, inwieweit die dargestellten Konzepte sich im Hinblick auf die ihnen zugrunde liegende Problemanalyse, auf die Bedeutung der verschiedenen Geldfunktionen, auf die Steuerungsebenen und -mechanismen sowie ihrer grundlegenden Zielsetzungen unterscheiden. -- In the present economic and financial crisis, alternatives to the current money system have increasingly become the subject of debate. This paper reviews the literature on selected alternative concepts of money. It identifies approaches that complement the established system with parallel currencies and seek to reduce its dysfunctions at the local and regional level. It then discusses various proposals for a comprehensive reform of the system, which involve controlling the quantity of money either centrally by strengthening central banks, or decentrally via the market. Finally, it shows how the concepts differ regarding how they analyze the problem, which functions of money they focus on, where they identify levels and mechanisms of control, and what their fundamental objectives are. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:131&r=hpe |
| By: | Aghion, Philippe (Harvard University, NBER, and CIFAR.); Akcigit, Ufuk (University of Pennsylvania and NBER.); Howitt, Peter (Brown University and NBER.) |
| Abstract: | Schumpeterian growth theory has “operationalized” Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process which could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; (iv) the emergence and impact of long-term technological waves. In each case Schumpeterian growth theory delivers predictions that distinguish it from other growth models and which can be tested using micro data. |
| Keywords: | Creative destruction; entry; exit; competition; firm dynamics; reallocation; R&D; industrial policy; technological frontier; Schumpeterian wave; general purpose technology |
| JEL: | O10 O11 O12 O30 O31 O33 O40 O43 O47 |
| Date: | 2013–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0298&r=hpe |
| By: | Bobtcheff, Catherine (Toulouse School of Economics (CNRS, LERNA)); Bolte, Jérôme (Toulouse School of Economics (GREMAQ)); Mariotti, Thomas (Toulouse School of Economics (CNRS, GREMAQ, IDEI)) |
| Abstract: | We model academic competition as a game in which researchers ¯ght for priority. Researchers privately experience breakthroughs and decide how long to let their ideas mature before making them public, thereby establishing priority. In a two-researcher, symmetric environment, the resulting preemption game has a unique equilibrium. We study how the shape of the breakthrough distribution affects equilibrium maturation delays. Making researchers better at discovering new ideas or at developing them has contrasted effects on the quality of research outputs. Finally, when researchers have different innovative abilities, speed of discovery and maturation of ideas are positively correlated in equilibrium. |
| Keywords: | Academic Competition, Preemption Games, Private Information. |
| JEL: | C73 D82 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:26784&r=hpe |
| By: | Kleppe, John (CentER and Department of Econometrics and Operations Research); Reijnierse, Hans (CentER and Department of Econometrics and Operations Research); Sudhölter, Peter (Department of Business and Economics) |
| Abstract: | If the excesses of the coalitions in a transferable utility game are weighted, then we show that the arising weighted modifications of the well-known (pre)nucleolus and (pre)kernel satisfy the equal treatment property if and only if the weight system is symmetric in the sense that the weight of a subcoalition of a grand coalition may only depend on the grand coalition and the size of the subcoalition. Hence, the symmetrically weighted versions of the (pre)nucleolus and the (pre)kernel are symmetric, i.e., invariant under symmetries of a game. They may, however, violate anonymity, i.e., they may depend on the names of the players. E.g., a symmetrically weighted nucleolus may assign the classical nucleolus to one game and the per capita nucleolus to another game. We generalize Sobolev's axiomatization of the prenucleolus and its modification for the nucleolus as well as Peleg's axiomatization of the prekernel to the symmetrically weighted versions. Only the reduced games have to be replaced by suitably modified reduced games whose definitions may depend on the weight system. Moreover, it is shown that a solution may only satisfy the mentioned sets of modified axioms if the weight system is symmetric. |
| Keywords: | TU game; nucleolus; kernel |
| JEL: | C71 |
| Date: | 2013–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2013_003&r=hpe |
| By: | Simon MacKenzie; Manfred Kerber; Colin Rowat |
| Keywords: | pillage games, cooperative game theory, core, stable sets |
| JEL: | C63 C71 P14 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:13-07&r=hpe |
| By: | Yusuke Mori; |
| Abstract: | We explore why authority within firms helps trading parties immediately settle ex post adaptation problems despite the possibility of a subordinate's disobedience to the orders of his boss. By employing three crucial behavioral assumptions (reference-dependent preference, self-serving bias, and shading), we point out that the choice of governance structure affects trading parties' expectations about outcome of ex post adaptations and show that a subordinate is likely to obey orders of his boss because he is expected to do so. Nevertheless, our study also points out that such a positive aspect of authority comes with subordinate's psychological disutility. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0863&r=hpe |
| By: | Matthew W. McCarter (Argyros School of Business and Economics, Chapman University); Anya C. Samak (School of Human Ecology, University of Wisconsin-Madison); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University) |
| Abstract: | It is common in organizational life to be simultaneously involved in multiple collective actions. These collective actions may be modeled using public good dilemmas. The developing social dilemma literature has two perspectives – the “divided loyalties” and “conditional cooperation” perspectives – that give opposite predictions about how individuals will behave when they simultaneously play two identical public good games. The current paper creates consensus between these social dilemma perspectives by examining cooperative behavior of participants interacting in two public good games with either different or the same group members. In each round, individuals have a common budget constraint across the two games. In support of the conditional cooperator’s perspective of social dilemmas, we find that playing two games with different, rather than same, group members increases overall contributions. Over the course of the experiment, participants playing two games with different group members shift their contributions significantly more often toward more cooperative public good games than participants playing with the same group members. |
| Keywords: | cooperation, conditional cooperation, public good, experiments, group composition |
| JEL: | C72 C73 C91 D03 H41 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:13-08&r=hpe |
| By: | Lindenberger, Dietmar (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Kümmel, Reiner (Universität Würzburg, Theoretische Physik I) |
| Abstract: | Energy conversion in the production of goods and services, and the resulting emissions associated with entropy production, have not yet been taken into account by the mainstream theory of economic growth. Novel econometric analyses, however, have revealed energy as a production factor whose output elasticity, which measures its productive power, is much higher than its share in total factor cost. This, although being at variance with the notion of orthodox economics, is supported by the standard maximization of profit or time-integrated utility, if one takes technological constraints on capital, labor, and energy into account. The present paper offers an explanation of these findings in the picture of a sledge, which represents the economy, on the slope of a niveous mountain, which represents cost. Historical economic trajectories indicate that the representative entrepreneur at the controls of the sledge steers his vehicle with due regard of the barriers from the technological constraints, observing “soft” constraints, like the legal framework of the market, in addition. We believe that this perspective contributes to resolving the paradox that energy hardly matters in mainstream growth theory, whereas it is an issue of growing importance in international policy. |
| Keywords: | energy; economic growth; oil price; profit maximization; technological constraints; output elasticities |
| JEL: | O11 Q43 |
| Date: | 2013–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2013_003&r=hpe |
| By: | Bezu, Sosina (School of Economics and Business Norwegian University of Life Sciences); Holden, Stein T. (School of Economics and Business Norwegian University of Life Sciences) |
| Abstract: | Field experiments combining dictator games with stated preference questions are used to elicit within subject and between subject sharing behavior with known family members and anonymous villager. A simple theoretical model incorporating social preferences, social distance and inter-dependent preferences is developed. The results show that generosity in form of probability of giving and amounts given are much lower towards anonymous villagers than to known family members. The probability of giving to the spouse is positively correlated with probability of giving to anonymous villager. Husbands and wives receiving positive amounts from their spouses (without knowing), were also more likely to give positive amounts to their spouses than those that received nothing from their spouses. Receiving positive amounts from spouse was uncorrelated with giving behavior towards anonymous villager. How sharing behavior is correlated with marriage type (parental arrangement, parental and bride agreement, love marriage, and kidnapping marriage), and other socioeconomic characteristics was assessed separately for husbands and wives to explore the sensitivity of responses to such socio-economic characteristics. |
| Keywords: | Generosity; social distance; within-family generosity |
| JEL: | C93 D03 O12 |
| Date: | 2013–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nlsclt:2013_001&r=hpe |
| By: | Marilda Sotomayor |
| Abstract: | Aiming to obtain new characterizations for the concepts of core, cooperative equilibrium and competitive equilibrium, and new correlations among these concepts, we introduce labor time into the assignment game. Two many-to-many matching models are obtained, distinguished by the nature of the agreements - rigid and flexible. An example illustrates that the characteristic function form does not always fully represent the cooperative structure of the two markets. Two different notions of demand correspondence generate distinct sets of competitive equilibrium allocations. The connection between the cooperative structures of both markets and the cooperative and competitive structures of each market is established through five cooperative solution sets proved to be non-empty, distinct and correlated by the set inclusion - one set is a superset of the next: the maximal set is the core; the second one characterizes the cooperative equilibria for the rigid market; the third set characterizes the cooperative equilibria for the flexible market; the other two sets characterize the competitive equilibrium allocations for the two competitive markets. |
| Keywords: | stable allocations, core, competitive equilibrium allocations, feasible |
| JEL: | C78 D78 |
| Date: | 2013–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2013wpecon02&r=hpe |
| By: | Salvatore Monni; Massimo Pallottino |
| Abstract: | The aim of this paper is to investigate to what extent buen vivir ("good life"), Latin America’s new concept for collective well being, can be considered a way forward beyond current paradigms related to economic growth, development, ideology and state building, with its strengths and potential weaknesses or just a new version of political discourse. In order to answer this question, we will briefly review the literature that can help to trace the buen vivir origins in the cosmovisions of latinoamerican indigenous peoples, and to connect it to reflections made in different areas of social, economic and political sciences, trying to identify the areas in which divergences arise using established approaches and frameworks. In the conclusions we’ll also try to look at the added value brought by the buen vivir towards a renewed understanding of political, social, economic objectives of the associated life. |
| Keywords: | Buen Vivir, development policy, Latin America, plurinational state, socialism, state building. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0172&r=hpe |
| By: | Paolo Pini |
| Abstract: | The way forward for Italy, within a Europe that has to change. A Europe that is too economics-minded and not politically-minded enough, where growth and employment are stifled by tight budgets. Yet another path is possible, if we still keep the single currency but if we change regulations and economic policies. And introduce more democracy, also in the economy. |
| Keywords: | European crisis; Euro; Economic policy |
| JEL: | E6 O52 P16 |
| Date: | 2013–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:2013062&r=hpe |
| By: | Mayntz, Renate |
| Abstract: | Der Aufsatz beschäftigt sich mit der Frage, ob eine Systemtheorie, in deren Zentrum die funktionelle Differenzierung steht, einen analytischen Rahmen für eine über die deskriptive Auflistung einzelner Faktoren hinausgehende Erklärung der zu der jüngsten internationalen Krise des Finanzsystems führenden Entwicklung bietet. Die Frage ließe sich nur bejahen, wenn funktionelle Differenzierung auf Leistung bezogen wird, das Finanzsystem als von der produzierenden Wirtschaft getrenntes Teilsystem betrachtet wird und das Eigeninteresse der Akteure im Teilsystem sowie die von externen Akteuren tatsächlich nachgefragten Leistungen in die Analyse einbezogen werden. Das würde verlangen, der Systemtheorie einen akteurtheoretischen Boden einzuziehen. Da damit Macht ins Zentrum der Analyse rückt, müsste auch die Verschränkung funktioneller und stratifikatorischer Differenzierung thematisiert werden. Diese theoretischen Modifikationen und Erweiterungen passen kaum unter das Dach der gängigen Theorie funktioneller Differenzierung, sondern begründen einen anderen, zugleich stärker historischen analytischen Ansatz. -- This article tries to answer the question whether the sociological systems theory that focuses on functional differentiation provides an analytical approach that permits going beyond the identification of isolated causal factors in explaining the developments leading up to the recent financial market crisis. To be able to do so would require to define functional sub-systems with reference to specific outputs rather than codes, to differentiate the financial system from the productive economy, and to include the self-interest of financial system actors as well as actually existing service demands of external actors in the analysis. This amounts to an actor-theoretic revision of social systems theory as presented by Parsons and Luhmann, which in turn introduces power phenomena into the analysis, thus calling for the consideration of the relationship between horizontal functional and vertical power differentiation. The necessary modification and extension of the classic paradigm of functional differentiation would result in the construction of an altogether different analytical approach. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:132&r=hpe |
| By: | Markantonatou, Maria |
| Abstract: | This paper discusses the management of the crisis in Greece, arguing that it was based on a series of diagnoses that justified fiscal discipline by stigmatizing the Greek economy and society, and that it had a narrow understanding of the reasons for Greece's deteriorating competitiveness. I begin by critically examining a series of diagnoses that take a 'rent-seeking' approach as a common starting point. I then argue that the chosen treatment of 'internal devaluation' was based on questionable perceptions of labor costs and public expenditure during the pre-crisis period in Greece, a treatment which then aggravated recession. I follow up with an overview of the socio-political consequences of the crisis (unemployment, poverty, social deregulation, rise of neofascism). In conclusion, I point to the premises of methodological nationalism, both in neoliberal and neo-Keynesian understandings of the crisis. Such views disregard the fact that states have prioritized the strengthening of the global financial system and its rescue in times of crisis, as well as the process of a deepening neoliberalism within the EU - even at a constitutional level through the Fiscal Compact - in which management of the Greek crisis has been inscribed. -- Der Beitrag analysiert das Management der Krise in Griechenland. Grundlage des Krisenmanagements, so die Argumentation, waren Diagnosen, die über eine Stigmatisierung der griechischen Wirtschaft und Gesellschaft eine strengere Haushaltsdisziplin rechtfertigten, sowie ein allzu eng gefasstes Verständnis der schwindenden Wettbewerbsfähigkeit des Landes. Ausgehend von einer kritischen Bestandsaufnahme des 'Rent-Seeking'-Ansatzes wird dargelegt, dass die gewählte Strategie der 'internen Abwertung' nicht nur auf einer fragwürdigen Beurteilung der Entwicklung von Lohnkosten und öffentlichen Ausgaben während der Vorkrisenperiode in Griechenland beruht, sondern auch die wirtschaftliche Rezession verschärft hat. Schließlich bietet der Beitrag einen Überblick über die soziopolitischen Konsequenzen der Krise (Unterbeschäftigung, Armut, soziale Deregulierung, Neofaschismus). Sowohl das neoliberale wie auch das neo-keynesianische Krisenverständnis beruhen auf den Prämissen des methodologischen Nationalismus. Diese Betrachtungsweise lässt jedoch außer Acht, dass Staaten der Rettung und Stärkung des globalen Finanzsystems in Krisenzeiten höchste Priorität einräumen und dass das Management der Krise in Griechenland durch den Europäischen Fiskalpakt auch auf konstitutioneller Ebene mit dem Vertiefungsprozess des Neoliberalismus in der Europäischen Union verwoben ist. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:133&r=hpe |
| By: | Stijn Claessens; M. Ayhan Kose; Luc Laeven; Fabián Valencia |
| Abstract: | The global financial crisis of 2007-09 has led to an intensive research program analyzing a wide range of issues related to financial crises. This paper presents a summary of a forthcoming book, Financial Crises: Causes, Consequences, and Policy Responses, that includes 19 contributions examining these issues and distilling policy lessons. The book covers a wide range of crises, including banking, balance-of-payments, and sovereign debt crises. It reviews the typical patterns prior to crises, considers lessons on their antecedents, and analyzes their evolution and aftermath. It also provides valuable policy lessons on how to prevent, contain and manage financial crises. |
| Keywords: | Global financial crisis, sudden stops, debt crises, banking crises, currency crises, defaults, restructuring, welfare cost, asset price busts, credit busts, prediction of crises |
| JEL: | E32 F44 G01 E5 E6 H12 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2013-05&r=hpe |