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on History and Philosophy of Economics |
| By: | Geoffroy De Clippel; Kareen Rozen |
| Date: | 2014–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:786969000000000904&r=hpe |
| By: | Detzer, Daniel; Herr, Hansjörg |
| Abstract: | This paper analyses financial crises from a theoretical point of view. For this it reviews what different schools of economic thought have to say about financial crises. It examines first the approaches that regard financial crises as a disturbing factor of a generally stable real economy (Wicksell, Hayek, Schumpeter, Fisher, and the early Keynes). Thereafter, approaches, where the dichotomy between the monetary and the real sphere is lifted, are reviewed. Here in particular the later works of Keynes and the contributions of Minsky are of importance. Lastly, it is looked at the behavioural finance approaches. After having reviewed the different approaches, it is examined where those approaches have similarities and where they can be combined fruitfully. Based on this, we develop an own theoretical framework methodologically based on a Wicksellian cumulative process, however, overcoming the neoclassical dichotomy. The paper ends with some policy recommendations based on the developed theoretical framework. -- |
| Keywords: | financial crisis,crisis theory,behavioral finance,Hayek,Keynes,Minsky,Schumpeter,Wicksell |
| JEL: | E12 E13 G01 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:322014&r=hpe |
| By: | Michel DE VROEY (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | In this review article of Backhouse and Boianovsky’s book, Transforming modern macroeconomics. Exploring disequilibrium microfoundations, 1956-2003, I make the following points: (a) Backhouse and Boianovsky’s too broad understanding of the disequilibrium approach results in their bringing together theories that should be kept separate. While the disequilibrium label fits the works of Patinkin, Clower and Leijonhuvud, it betrays the project of Barro and Grossman, Drèze and Benassy who strived at producing an equilibrium theory. (b) I put in question their claim that an inner link exists between disequilibrium and fixed price equilibrium theories and imperfect competition modeling. (c) I try to identify the deep nature of the controversy in which these authors were involved. (d) I put forward a few conjectures about the reason why fixed price modeling petered out. |
| Keywords: | Disequilibrium theory, non-Walrasian equilibrium models, Keynesian macroeconomics |
| JEL: | B E E |
| Date: | 2014–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2014006&r=hpe |
| By: | Hein, Eckhard; Dodig, Nina; Budyldina, Natalia |
| Abstract: | This paper surveys some of the important literatures on financial, economic and social systems with an eye towards explaining the tendencies towards 'financialisation'. We focus on important strands of this literature: the French Regulation School, the US-based Social Structures of Accumulation approach, the contributions by several Post-Keynesian authors, with a focus on the long-run views contained in Hyman Minsky's work, in particular. In our comparative assessment of these approaches, we adopt the following four steps procedure: First, we sketch the basic structure of the approaches in order to single out how each of them views the interaction between social institutions and the economy and the related dynamics regarding the development of the institutional structure and the associated stages or regimes of economic development. Second, we describe how these approaches view the structural breaks or the regime shifts in the long-run development of modern capitalism, which has triggered or at least has contributed to the emergence of a type of capitalism dominated by finance (financialisation). Third, we outline how these different approaches view the main characteristics and features of financialisation. Fourth, we deal with the respective views on the consequences of financialisation for long-run economic and social development including the crisis of this stage of development. -- |
| Keywords: | French Regulation School,Social Structures of Accumulation,Post-Keynesian approach,Minsky,financialisation,stages of capitalist development,finance-led growth regime,global neoliberal SSA,finance-dominated capitalism,money manager capitalism,financial, economic and social systems |
| JEL: | E02 E11 E12 G01 P10 P16 P51 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:342014&r=hpe |
| By: | Nicolas Barbaroux (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France, Université Jean Monnet, Saint-Etienne, F-42000, France); Patrizia Michel Bellet (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France, Université Jean Monnet, Saint-Etienne, F-42000, France) |
| Abstract: | Myrdal’s works are usually analysed with a dual and separated point of view : on the one hand the methodological papers concerning the value problem and based on a strong non neutrality thesis ; on the other part the theoretical analysis concerning monetary theory and policy, with a Wicksellian filiation. In fact both the dimensions are strongly connected by a common way : the application of the Hägerström’s Swedish guillotine between is and ought, but also the construction of a bridge between economic science and political views on social engineering and economic policy. Myrdal wants to address this problem : how economic science can become politically relevant ? This paper analyses two stages of that unique project : the proposition of a "technology of economics" (1930), and the selection process for a "norm for monetary policy" (1939). It shows that Myrdal distorts an initial end and means scheme by proposing some intermediary concepts between positive and normative fields. From a theoretical and statistical framework and an explicit value judgment these concepts enable to elaborate an iterative tree of selection of a speci-c monetary policy. If the Myrdal’s project encounters difficulties in conciliating a non-cognitivist thesis with economic prescriptions and in proposing a tractable method, it remains an important benchmark for the analysis of the links between positive and normative views concerning monetary policy. |
| Keywords: | value judgment, monetary policy, positive analysis, normative analysis |
| JEL: | B20 E52 B40 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1408&r=hpe |
| By: | Johannes Horner; Satoru Takahashi; Nicolas Vieille |
| Date: | 2014–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:786969000000000881&r=hpe |
| By: | Michael Wilkinson |
| Abstract: | Normative political theory is divided on whether questions of distributive justice properly extend beyond the state. From a functionalist perspective, however, justice reflects a balance of material forces, subject to the logics of ‘market’ and ‘social’ justice, or ‘capitalism’ and ‘democracy’. The justice ‘deficit’ is the imbalance or disequilibrium in these logics, an imbalance which the constitution of the post-war European state stabilises through their constraint. European integration, initially an important feature of this post-war settlement, now increasingly comes to be viewed as a significant threat to it. Whereas market logic and capital have been rapidly supra-nationalised, social-democratic logic has struggled to transcend the state, the EU, in particular, lacking the channels of contestation to legitimise redistribution. This leads to an imbalance in the forces of capitalism and democracy, a justice ‘deficit’, which destabilizes national as well as supranational institutions, but also leads to questions being asked of what Germans owe Greeks, or vice versa. The justice deficit and reaction to it now appear to be threatening core features of state sovereignty. But it also suggests that the logic of the state - and the question: to whom are obligations owed? - must itself be subject to contestation; the dilemma of market and social justice, or capitalism and democracy, must be replaced with a trilemma, of market, social and democratic justice. |
| JEL: | J1 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55831&r=hpe |
| By: | Schnellenbach, Jan; Schubert, Christian |
| Abstract: | Public choice theory has originally been motivated by the need to correct the asymmetry, widespread in traditional welfare economics, between the motivational assumptions of market participants and policymakers: Those who played the game of politics should also be considered rational and self-interested. History repeats itself with the rise of behavioral economics: Cognitive biases discovered in market participants often induce a call for rational governments to intervene. Recently, however, behavioral economics has also been applied to the explanatory analysis of the political process. This paper surveys the current state of the emerging field of 'behavioral public choice' and considers the scope for further research. -- |
| Keywords: | Behavioral Public Choice,Behavioral Economics,Rational Irrationality,Cognitive Biases,Social Norms,Voting,Paternalism |
| JEL: | D78 D03 A12 D72 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:1403&r=hpe |
| By: | Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Peter Sudhölter (University of Southern Denmark - Department of Business and Economics and COHERE) |
| Abstract: | A game with precedence constraints is a TU game with restricted cooperation, where the set of feasible coalitions is a distributive lattice, hence generated by a partial order on the set of players. Its core may be unbounded, and the bounded core, which is the union of all bounded faces of the core, proves to be a useful solution concept in the framework of games with precedence constraints. Replacing the inequalities that define the core by equations for a collection of coalitions results in a face of the core. A collection of coalitions is called normal if its resulting face is bounded. The bounded core is the union of all faces corresponding to minimal normal collections. We show that two faces corresponding to distinct normal collections may be distinct. Moreover, we prove that for superadditive games and convex games only intersecting and nested minimal collection, respectively, are necessary. Finally, it is shown that the faces corresponding to pairwise distinct nested normal collections may be pairwise distinct, and we provide a means to generate all such collections. |
| Keywords: | game theory; restricted cooperation; distributive lattice; core; extremal rays; faces of the core |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00950109&r=hpe |
| By: | Francesco Nava; Michele Piccione |
| Abstract: | The paper discusses community enforcement in infinitely repeated, two-action games with local interaction and uncertain monitoring. Each player interacts with and observes only a fixed set of opponents, of whom he is privately informed. the main result shows that when beliefs about the monitoring structure have full support, efficiency can be sustained with sequential equilibria that are independent of the players' beliefs. Stronger results are obtained when only acyclic monitoring structures are allowed or players have unit discount rates. These equilibria satisfy numerous robustness properties. |
| JEL: | J1 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:54250&r=hpe |
| By: | Apostolos Serletis (University of Calgary) |
| Abstract: | In the aftermath of the global Â…financial crisis questions have been raised regarding the value and applicability of modern macroeconomics. Motivated by these developments and recent advances in dynamical systems theory, the papers in this special issue of Macroeconomic Dynamics deal with specifiÂ…c aspects of the economy as a complex evolving dynamic system. |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2014-40&r=hpe |
| By: | Daron Acemoglu; Asuman E. Ozdaglar; Alireza Tahbaz-Salehi |
| Date: | 2014–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:786969000000000944&r=hpe |
| By: | Maxime Demarais-Tremblay (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, Centre Walras Pareto - Université de Lausanne) |
| Abstract: | This paper provides an explanation of the emergence of the standars textbook definition of public goods in the middle of the 20th century. It focuses on Richard Musgrave's contribution in defining public goods as non-rival and non-excludable - from 1939 to 1969. Although Samuelson's mathematical definition is generally used in models of public goods, the qualitative understanding of the specificity of pure public goods owes more to Musgrave's emphasis on the impossibility of exclusion. This paper also highlights the importance of the size of the group to which benefits of a public good accrue. This analysis allow for a reassessment of the Summary table of goods which first appeared in Musgrave and Musgrave (1973) textbook. |
| Keywords: | Richard A. Musgrave; social goods; public goods; non-rivalry; non-exclusion |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00951577&r=hpe |
| By: | Sang-Hyun Kim (University of East Anglia) |
| Abstract: | In a typical study of political economy, citizens are regarded as principals, and government as agent. This is a modern way of thinking in the sense that classical theorists of democracy such as Jean-Jacques Rousseau and James Madison were more interested in the dual nature of people; they are principals (citizens sharing the sovereign power) and, at the same time, agents (subjects under the laws). Government, in their framework, is an intermediate body which helps people solve their self-control problem. Equipped with tools of modern economics, this paper explores the classical problem to see how economic development and political institutionalization relate to the structure of government and the quality of public sector. In particular, I consider repeated games with a large population and incomplete information, in which players decide whether to sacrifice private consumption to provide public goods. Because both people and the executive of public projects are subject to moral hazard, the people spend resources to monitor the executive and the people themselves. The optimal self-enforcing contract, which can be interpreted as an efficiency upper bound of political systems, is characterized. The analysis of the contract shows that as a country gets more economically developed and politically institutionalized, the agency problem on the people's side becomes negligible, and the citizens' demand for accountable government becomes stronger, in which case the standard principal-agent framework is good enough to describe the political reality. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:uea:aepppr:2012_59&r=hpe |
| By: | John Knight; Ramani Gunatilak |
| Abstract: | The empirical literature on the economics of happiness has grown rapidly, and much has been learned about the determinants of subjective well-being. Less attention has been paid to its normative implications. Taking China as a case study, this paper first summarises empirical results on the determinants of subjective well-being and then considers whether that evidence can be used for social evaluation. Different criteria for social evaluation give very different answers: on the one hand, real income per capita and the human development index have risen rapidly in recent years but, on the other hand, subjective well-being appears not to have risen at all. Ultimately a value judgement is required: arguments are presented for and against including subjective well-being, either alone or with other criteria, in the social welfare function. |
| Keywords: | Capabilities; China; Happiness; Human development; Social evaluation; Subjective well-being |
| JEL: | D03 D63 O15 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-09&r=hpe |
| By: | Jo Braithwaite |
| Abstract: | The September 2008 collapse of the Lehman Brothers group marked the nadir of the global financial crisis. While the regulatory aftermath has been extensively debated, the effects of the case law that arose from the insolvency have not. This paper explains the need to redress the balance. It starts by considering the quantity and qualities of the Lehmans case law, examining why the 30 plus decisions handed down by the English courts enjoy an unusually high precedent-setting potential. The paper proceeds by analysing the precedential effects of these decisions, and it reports on a recent workshop held at the London School of Economics that met to consider this question. Subject to the event’s terms of engagement, the paper draws out several themes from the discussion, including the impact of the Lehmans cases on the principles of contractual interpretation, the law of trusts and insolvency law. By way of conclusion, it is submitted that the impact of Lehmans case law reaches far beyond that particular insolvency, to worldwide users of standard form documents, the global financial markets and the common law itself. Seen in this light, the Lehmans case law is a significant, but under-appreciated, side-effect of the global financial crisis. |
| JEL: | N0 L81 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55834&r=hpe |
| By: | John E. Roemer |
| Date: | 2014–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:786969000000000919&r=hpe |
| By: | Taube, Markus |
| Abstract: | Der Beitrag zeichnet die zentralen Entwicklungs- und Wachstumslinien der chinesischen Volkswirtschaft seit Gründung der VR China nach und stellt die in verschiedenen Perioden verfolgten ordnungspolitisch-institutionellen Leitbilder dar. Die Darstellung geht explizit auf die entsprechenden Entwicklungen im Rahmen der chinesischen Zentralverwaltungswirtschaft, der Wirtschaftswunderjahre und der aktuellen Herausforderungen an eine Fortführung des Wachstumsprozesses ein. -- This paper discusses the major patterns of economic development and growth in the Chinese economy since the foundation of the PR China. In this context it highlights the institutional foundations and economic policy guidelines adhered to during various development periods. The paper deals with respective developments during China's central planning period, the economic miracle era as well as contemporary challenges to continued growth and development. |
| Keywords: | Wirtschaftliche Entwicklung,Wachstum,Institutionen,Wirtschaftssysteme,Ordnungspolitik,economic development,growth, institutions,economic systems,economic/regulatory policy |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:udedao:962014&r=hpe |
| By: | Daron Acemoglu; Francisco A. Gallego; James A. Robinson |
| Abstract: | In this paper we revisit the relationship between institutions, human capital and development. We argue that empirical models that treat institutions and human capital as exogenous are misspecified both because of the usual omitted variable bias problems and because of differential measurement error in these variables, and that this misspecification is at the root of the very large returns of human capital, about 4 to 5 times greater than that implied by micro (Mincerian) estimates, found in some of the previous literature. Using cross-country and cross-regional regressions, we show that when we focus on historically-determined differences in human capital and control for the effect of institutions, the impact of institutions on long-run development is robust, while the estimates of the effect of human capital are much diminished and become consistent with micro estimates. Using historical and cross-country regression evidence, we also show that there is no support for the view that differences in the human capital endowments of early European colonists have been a major factor in the subsequent institutional development of these polities. |
| Keywords: | Economic Development, Institutions, Human Capital |
| JEL: | I25 P16 O10 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:449&r=hpe |