nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2013‒11‒14
fifteen papers chosen by
Erik Thomson
University of Manitoba

  1. Economics at the Faculty of Law in Oslo - The First Hundred Years By Mehlum, Halvor
  2. Mihail Manoilescu’s international trade theories in retrospect: how and when emerging economies must be protected? By Nikolay Nenovsky; Dominique Torre
  3. "Eugene Meyer and the German Influence on the Origin of U.S. Federal Financial Rescues" By James L. Butkiewicz
  4. Multicoalitional solutions By Stéphane Gonzalez; Michel Grabisch
  5. Comments on monetary policy and 'Too Big to Fail' (with a tribute to Irving Kristol) By Richard W. Fisher
  6. Life's unpredictable arc By John C. Williams
  7. Should full employment be a mandate for central banks? By Eric S. Rosengren
  8. Social Enterprise and Renewable Energy: Issues of Sustainability and Self-Sufficiency By Mrs Caroline Morrison; Ms Emer Gallagher; Professor Elaine Ramsey; Mr Derek Bond
  9. What can civil society expect from academic macroeconomics? By Michel DE VROEY
  10. The U.S. economy and monetary policy By James Bullard
  11. Monetary policy and financial stability By Eric S. Rosengren
  12. Introductory remarks at the Museum of American Finance "The Fed at 100" exhibit By William C. Dudley
  13. Risk of financial runs: implications for financial stability By Eric S. Rosengren
  14. Anatomy of international banking crises at the onset of the Great Recession By Stolbov, Mikhail
  15. Lack of material resources causes harsher moral judgments By Marko Pitesa; Stefan Thau

  1. By: Mehlum, Halvor (Dept. of Economics, University of Oslo)
    Abstract: In this article I take up the relationship between economics and law in the hundred-year period preceding the establishing of economics as a separate discipline. Rather than providing a review of historical milestones, I concentrate on some observations that illustrate the relationship between law and economics. I conclude with some reflections on what the law may have missed out on by not having participated in a similar revolution as economics experienced.
    Keywords: history; of; economics
    JEL: B10 K00
    Date: 2013–11–04
  2. By: Nikolay Nenovsky; Dominique Torre
    Abstract: Mihail Manoilescu was one of the main intellectual personalities of the interwar period in Romania. He was known as a politician and a central banker, but also as an economist. From the very beginning of his theoretical and practical career, or at least from the late 1920s till the end of his life, Manoilescu’s ideas and theories were marked by a clear continuity and consistency based on the theory of protectionism. His defence of protectionism is generally presented as clumsy and founded on incorrect method. This paper contributes to a testament of Manoilescu’s conclusions, the validity of which we test in two different paradigms. Section 2 presents the theory of protectionism formulated by the author. Section 3 tries to interpret Manoilescu’s views in modern terms. It presents arguments assimilating his analysis to some post-Marxist presentations of the after-war period. It also develops a Ricardian model proving that Manoilescu’s intuitions can be verified in a Ricardian context. The last section concludes.
    Keywords: Mihail Manoilescu, theory of protectionism, gains from trade
    JEL: B22 B26 E42
    Date: 2013–10
  3. By: James L. Butkiewicz (Department of Economics,University of Delaware)
    Abstract: While federal financial rescues have become a common response to crises, federal provision of finance was not one of the original powers of the federal government. One man, Eugene Meyer, is largely responsible for the origin of federal financial rescues, through both the War Finance Corporation and Reconstruction Finance Corporation. Meyer learned laissez-faire economics from William Graham Sumner at Yale. However, German economist Adolph Wagner’s state-socialism philosophy heavily influenced Meyer’s thinking, and Meyer developed an interventionist philosophy. Serving in key government positions, Meyer put his beliefs into practice. These channels of influence and the resulting policies are examined.
    Keywords: B - History of Thought, N - Economic History
    JEL: J16 J30 J31 J70 J71
    Date: 2013
  4. By: Stéphane Gonzalez (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: The paper proposes a new concept of solution for TU games, called multicoalitional solution, which makes sense in the context of production games, that is, where v(S) is the production or income per unit of time. By contrast to classical solutions where elements of the solution are payoff vectors, multicoalitional solutions give in addition an allocation time to each coalition, which permits to realize the payoff vector. We give two instances of such solutions, called the d-multicoalitional core and the c-multicoalitional core, and both arise as the strong Nash equilibrium of two games, where in the first utility per active unit of time is maximized, while in the second it is the utility per total unit of time. We show that the d-core (or aspiration core) of Benett, and the c-core of Guesnerie and Oddou are strongly related to the d-multicoalitional and c-multicoalitional cores, respectively, and that the latter ones can be seen as an implementation of the former ones in a noncooperative framework.
    Keywords: Cooperative game; core; aspiration core; strong Nash equilibrium
    Date: 2013–08
  5. By: Richard W. Fisher
    Abstract: Remarks before Columbia University's School of International and Public Affairs, New York, N.Y., February 27, 2013 ; "The bottom line is that rather than achieve the intended theoretical effect, I believe the policy of super-abundant money at costs deviating substantially from normal equilibrium levels may ultimately prove to be counterproductive. Or it may restrain the benefits that theory might suggest."
    Date: 2013
  6. By: John C. Williams
    Abstract: Commencement Address, Economics Department, University of California, Berkeley, Berkeley, California, May 20, 2013
    Date: 2013
  7. By: Eric S. Rosengren
    Abstract: Remarks by Eric S. Rosengren, President and Chief Executive Officer, Federal Reserve Bank of Boston, at the Federal Reserve Bank of Boston's 57th economic conference, "Fulfilling the Full Employment Mandate - Monetary Policy and the Labor Market", Federal Reserve Bank of Boston, Boston, Massachusetts, April 12, 2013.
    Keywords: Employment (Economic theory) ; Monetary policy ; Banks and banking, Central
    Date: 2013
  8. By: Mrs Caroline Morrison; Ms Emer Gallagher; Professor Elaine Ramsey; Mr Derek Bond
    Abstract: Objectives Whilst much has been written about the role of the 'bottom up' approach to renewable energy, there is still no clear insight into why only some schemes work. The objective of this paper is to illustrate how adopting a social constructivist approach gives more insight into the factors that lead to successful small scale renewable energy adoption. In particular, social enterprises are playing an increasing role in delivering the objectives of Europe 2020 (sustainability and self-sufficiency). This paper discusses these current trends with regards to community renewable energy projects. Prior Work There is a considerable body of literature on community renewable energy projects (Fudge et al., 2011; Walker et al., 2010, 2006; Warren and McFadyen, 2010). At a practical level, the importance of adopting the correct organisational structures has been highlighted (Gubbins, 2010; DETI, 2011). However, in the literature there has been little discussion of this issue. This could be because most of the academic literature is framed within the technological determinist paradigm and has its origins in subjects other than business. Approach The paper presents and discusses the findings of a large number of case studies that explore these issues, undertaken as part of the European Regional Development Fund's transnational Northern Periphery Programme's projects in renewable energy. Results and Implications The case studies identified that the main barriers were socio-economic rather than technical. The main finding is that nearly all successful community renewable energy initiatives had formed themselves into social enterprises. This was because they were better placed to address the key barriers identified. Uncovering this finding was possible through the adoption of a social constructivist approach which allowed the socio-economic issues to be carefully considered. The implication is that further work needs to be undertaken by adopting this paradigm. Value The main value of this paper is that it illustrates how adopting a social constructivist paradigm and using management theory helps to explain the complex issues surrounding the 'bottom up' approach to sustainability and self-sufficiency. In particular, the approach provides an ideal way of studying the functioning of social enterprises.
    Keywords: social enterprise, renewable energy, innovation, social constructivism
    Date: 2013–11
  9. By: Michel DE VROEY (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: Academic macroeconomics as it has been practiced for the last three decades has a bad reputation, especially after the onset of the 2008 recession. The aim of this paper is to reflect on this state of affairs. To begin, I draw a comparison between Keynesian and Lucasian macroeconomics, bringing to light that they are based on different tenets. Next, I claim that because of its higher internal consistency, Lucasian macroeconomics is superior to Keynesian. However, I also claim that espousing it bears a heavy price — in particular a limited usefulness for policymaking and an inability to come to grips with economic crises.
    Keywords: Keynesian macroeconomics, Lucas, Real Business Cycle models
    JEL: B E E
    Date: 2013–05–31
  10. By: James Bullard
    Abstract: June 10, 2013. Presentation. "The U.S. Economy and Monetary Policy." 19th Conference of Montreal—Entering the Next Economy: New Realities, New Frontiers, Montreal, Canada.
    Keywords: Monetary policy ; Economic conditions
    Date: 2013
  11. By: Eric S. Rosengren
    Abstract: Remarks by Eric S. Rosengren, President and Chief Executive Officer, Federal Reserve Bank of Boston, to the Business and Industry Association of New Hampshire and the New Hampshire Bankers Association, Saint Anselm College, Manchester, New Hampshire, March 27, 2013.
    Keywords: Monetary policy ; Financial stability
    Date: 2013
  12. By: William C. Dudley
    Abstract: Remarks at the Museum of American Finance, New York City.
    Keywords: Museums ; Federal Reserve System - History ; Corrigan, E. Gerald ; Federal Reserve Bank of New York ; Federal Open Market Committee ; Financial stability
    Date: 2013
  13. By: Eric S. Rosengren
    Abstract: Remarks by Eric S. Rosengren, President and Chief Executive Officer, Federal Reserve Bank of Boston, at “Building a Financial Structure for a More Stable and Equitable Economy,” the 22nd Annual Hyman P. Minsky Conference on the State of the U.S. and World Economies, The Levy Economics Institute of Bard College and the Ford Foundation, New York, New York, April 17, 2013.
    Keywords: Financial stability ; Global Financial Crisis, 2008-2009 ; Investment banking
    Date: 2013
  14. By: Stolbov, Mikhail
    Abstract: The paper examines a wide range of potential predictors of 25 international banking crises that broke out in 2007–2011 on the basis of cross–sectional logit models and the BCT (binary classification tree) algorithm, a novel technique in assessing the causes of banking crises. The major determinants of the crises arise from excessive credit depth (measured as private credit to GDP ratio) and illiquidity of the banking sector (credits to deposits ratio). The implementation of explicit deposit insurance schemes is also a pro–crisis factor due to the moral hazard effect they tend to cause. On the contrary, higher values of remittance inflows to GDP decrease the susceptibility to banking crises. These findings are robust under both methodologies. Lower bank concentration, bigger values of cost to income ratios as well as a higher level of economic liberalization make countries more vulnerable to banking crises, as derived from the logit analysis.
    Keywords: banking crises, Great Recession, logit analysis, binary classification tree
    JEL: E44 G21
    Date: 2013–10–26
  15. By: Marko Pitesa (MC - Management et Comportement - Grenoble École de Management (GEM)); Stefan Thau (INSEAD - INSEAD)
    Abstract: This research tested the idea that lack of material resources (e.g., low income) causes people to make harsher moral judgments because lack of material resources is associated with a lower ability to cope with the effects of others' harmful behavior. Consistent with this idea, a large cross-cultural survey (Study 1) found that both chronic (low income) and situational (inflation) lack of material resources were associated with harsher moral judgments. The effect of inflation was stronger for low-income individuals, whom inflation renders relatively more vulnerable. A follow-up experiment (Study 2) caused participants to perceive they lacked material resources by employing different anchors on the scale they used to report their income. The manipulation led to harsher judgments of harmful, but not of non-harmful, transgressions and this effect was explained by a sense of vulnerability. Alternative explanations were excluded. These results demonstrate a functional and contextually situated nature of moral psychology.
    Keywords: moral judgments, material resources, income, moral transgressions, moral psychology
    Date: 2013–10–25

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