nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2014‒05‒17
eighteen papers chosen by
Erik Thomson
University of Manitoba

  1. Agricultural Literature in Eurasia circa 200 BCE – 1500 CE By Myrdal, Janken
  2. Ethics, moral philosophy and economics By Frédéric Teulon
  3. Adam Smith and modern economics. By Sandmo, Agnar
  4. Jean-Baptiste Say et la question des débouchés By Alain Béraud
  5. Say's Law By Meacci, Ferdinando
  6. Floating a "Lifeboat": The Banque de France and the Crisis of 1889 By Pierre-Cyrille Hautcoeur; Angelo Riva; Eugene N. White
  7. Karl Marx y Max Weber: ¿ruptura o continuidad? By Mejía Sanabria, Carlos Alberto
  8. Baffling Inflation: Cost-push Inflation Theories in the Late 1950s United States By Takami, Norikazu
  9. The early history of environmental economics. By Sandmo, Agnar
  10. The Market in Economics: Behavioural Assumptions and Value Judgments. By Sandmo, Agnar
  11. The economics of happiness and anger in North Africa By Chamlou, Nadereh
  12. Fairness is Intuitive By Alexander W. Cappelen; Ulrik H. Nielsen; Bertil Tungodden; Jean-Robert Tyran; Erik Wengström
  13. Is There a Development Gap in Rationality? By Cappelen, Alexander W.; Kariv, Shachar; Sørensen, Erik Ø.; Tungodden, Bertil
  14. Localized and Biased Technologies: Atkinson and Stiglitz’s New View, Induced Innovations, and Directed Technological Change By Daron Acemoglu
  15. "Minsky and Dynamic Macroprudential Regulation" By Jan Kregel
  16. Evaluating Policies to Prevent another Crisis: An Economist’s View By Paul S. Willen
  17. Reciprocal beliefs and out-group cooperation: evidence from a public good game By Brañas-Garza, Pablo; Kernohan, David; Oyediran, Olusegun; Rivas, M. Fernanda
  18. DiSES Working Papers - 30 Years and 400 Papers After By Maurizio MARIOTTI; Massimo TAMBERI

  1. By: Myrdal, Janken (Dept. of Economic History, Stockholm University)
    Abstract: Agricultural literature is one of the most important and oldest non-fictions genres in the world. This text gives us the first overview of extant agricultural treatises in Eurasia before c. 1500. With this overview, it is possible to give a better foundation to discussions on the role of knowledge. This literature also gives us indications about the importance of agriculture in different periods for a number of regions in Eurasia. An important part is discussion on method. The goal is to arrive at comparable numbers – to form the basis for analyze.
    Keywords: Agricultural history; Knowledge; Eurasia
    JEL: N13 N15 N50
    Date: 2014–05–14
  2. By: Frédéric Teulon
    Abstract: Seemingly, the economic relations have no thing to do with the morality. The economy claims to be able to be a science; yet in th other scientific disciplines one does not arise this type of questions (we do not wonder if the physics of particles is moral either or not or if the composition of such molecule obeys ethical principles.The analysis led here on Bernard Mandeville's papers which showed the ambiguous relationships which the vice maintians with the virtue. However the paradox is that the economy cannot work without a certain shape of morality. The economy is made by individuals endowed with a capacity to know right from wrong. While the economy and capitalism may be amoral, individuals are not.
    Keywords: Economics, Moral philosophy, Ethics, Economics of welfare.
    Date: 2014–05–15
  3. By: Sandmo, Agnar (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: In his Wealth of Nations (1776) Adam Smith created an agenda for the study of the economy that is reflected in the structure of modern economics. This paper describes Smith’s contributions to four central areas of economic theory: The theory of price formation, the relationship between market outcomes and the public interest, the role of the state in the economy, and the sources of economic growth. In each case, an attempt is made to relate Smith’s contribution to the state of contemporary economics, showing both the similarities and contrasts between the respective approaches.
    Keywords: Adam Smith; markets; government; economic growth.
    JEL: B12 B31
    Date: 2014–04–28
  4. By: Alain Béraud (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise)
    Abstract: Say a soutenu qu'il n'y a pas de capital, quelque considérable qu'il soit, qui ne puisse être employé de façon profitable. Une telle proposition n'implique pas l'absence de chômage et de crise. Les marchés peuvent être encombrés. Dans ses premiers écrits, Say expliquait que si certaines marchandises ne peuvent pas se vendre, c'est parce que d'autres manquent. Quand on a moins gagné, on peut moins acheter et un déséquilibre sectoriel peut se diffuser dans l'ensemble de l'économie. Plus tard, il expliquera les crises commerciales par les abus des banques de circulation qui, pour escompter les effets de commerce de leurs clients, émettent des quantités excessives de billets. La valeur de la monnaie diminue ; les individus qui détiennent des billets demandent leur paiement en espèces ; les banques constatant la diminution de leurs réserves restreignent leurs crédits provoquant ainsi une crise.
    Keywords: Say, débouchés, théorie quantitative de la monnaie, crises commerciales
    Date: 2014–04–29
  5. By: Meacci, Ferdinando
    Abstract: The expression “Say’s Law” is used in the economics literature to represent the arguments set out by Say in Chapter XV, Des Débouchés, Book I, of his Traité d’Economie Politique (1st ed. 1803; 4th ed. 1819, 1st English trans. 1821). These arguments, later known and discussed under the different names of “loi des débouchés” and “law of markets”, are considered by Ricardo amongst the “original, accurate, and profound” discussions of an author “who justly appreciated and applied the principles of Smith” (Works I: 6-7). Ever since Say’s exposition and Ricardo’s appreciation, the focus and controversies on this Law reached two distinct peaks first in the classical and then in the post-Keynesian period. While the classical period, which run between James Mill’s explicit draft of the Law (1965 [1808]) and J. S. Mill’s final qualification of it (1929 [1871]), reached its own peak in Ricardo’s outright support, against Malthus’ criticisms, of those arguments, the post-Keynesian period was opened by Keynes’ outright criticism of Ricardo’s system of thought (believed to be based on Say’s Law), and corresponding defence of Malthus, in his General Theory (CW VII: 18-21, 32-34, 364]). The different versions, interpretations and misunderstandings that have surrounded the Law in the course of time have been so numerous that an entire volume (be it one of those authored by Kates, 1998, Sowell, 1972, and Hutt, 1974; or the one edited by Kates, 2003) may not be enough to account for all of them. This holds even if the Law were looked at from the standpoint of a single author, be it Say or Ricardo, or of the interactions within, or between, the systems of thought of these or of many other authors. This entry is intended to single out, amongst these different versions, interpretations and misunderstandings, only those connected, directly or indirectly, with Ricardo’s support of the Law. Thus the entry is divided into 5 sections. Section 1 is focused on the limits of the Law from the standpoint of its pure or abstract content and on why it should be more properly referred to as Say’s Principle, while section 2 is focused on the split of the Law into its two forms known in the literature as “Say’s identity” and “Say’s equality”. The remaining three sections are instead devoted to an analysis of the main endorsements, criticisms and counter-criticisms that have surrounded the Law ever since Ricardo came to its support against Malthus, and until Keynes moved against it and, more generally, against Ricardo himself. Some brief conclusions are eventually provided in the final section. A draft of this paper has been submittted for publication in the Elgar Companion to David Ricardo, edited by H. Kurz and N. Salvadori, E. Elgar, forthcoming
    Keywords: Law of markets, Say's identity, Say's Equality
    JEL: B1 B12 B2 B22 B3
    Date: 2013–06
  6. By: Pierre-Cyrille Hautcoeur; Angelo Riva; Eugene N. White
    Abstract: When faced with a run on a “systemically important” but insolvent bank in 1889, the Banque de France pre-emptively organized a lifeboat to ensure that depositors were protected and an orderly liquidation could proceed. To protect the Banque from losses on its lifeboat loan, a guarantee syndicate was formed, penalizing those who had participated in the copper speculation that had caused the crisis bringing the bank down. Creation of the syndicate and other actions were consistent with mitigating the moral hazard from such an intervention. This episode contrasts the advice given by Bagehot to the Bank of England to counter a panic by lending freely at a high rate on good collateral, allowing insolvent institutions to fail.
    JEL: E58 G01 N13 N23
    Date: 2014–05
  7. By: Mejía Sanabria, Carlos Alberto
    Abstract: El comienzo del siglo XX pudo contemplar la emergencia de un intenso debate, que se prolonga hasta nuestros días, en torno a la obra de Karl Marx y Max Weber. En el afloraron diferencias sustanciales respecto de las perspectivas teóricas de los dos autores en el abordaje de diversas temáticas tratadas por ellos, algunas relacionadas con el método del materialismo histórico, el conocido asunto de la relación entre base económica y superestructura, el papel de las ideas y de la religión, particularmente del protestantismo, en la transformación del mundo material o las clases sociales y la función del Estado. Pensadores diversos han querido ver allí una radical ruptura teórica entre dos de los fundadores de la disciplina de la Sociología, iniciándose una corriente de pensamiento que aviva una ya prolongada tradición de enfrentamientos. Alguna evidencia empírica permite sostener que, antes que profundas rupturas, parecieran más bien identificarse líneas de continuidad entre los corpus de pensamiento que nos legaron los autores en cuestión
    Keywords: Materialismo histórico; Protestantismo; Marx, Karl, 1818-1883; Weber, Max, 1864 - 1920; Crítica e interpretación
    Date: 2013–10–16
  8. By: Takami, Norikazu
    Abstract: The aim of this essay is to examine how cost-push inflation theories, which highlight autonomous increases of wages and other production costs as a cause of inflation, played their decisive role in the policy debate to interpret the price movements in the second half of the 1950s. In late 1956, economic experts including politicians and journalists as well as economists started to observe a peculiarity accompanying the ongoing inflation, namely, the apparent lack of excess aggregate demand, and they placed great emphasis on cost-push inflation theories to interpret this peculiar phenomenon. When the recession of 1958 entailed a steady increase of general prices, some experts considered this as another supporting evidence of cost push inflation. Against the background of this atypical inflation, the United States Congress, then ruled by the opposition Democratic party, engaged in large-scale inquiries of inflation. These investigations produced one report among others that emphasized cost-push theories, which was called the Eckstein Report after the technical director and Harvard economist Otto Eckstein. This essay concludes that the controversy on the inflation of the late 1950s created various processes that shaped and propagated cost-push inflation theories.
    Date: 2014–04
  9. By: Sandmo, Agnar (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: This paper considers economists’ treatment of problems related to the environment prior to the establishment of environmental economics as a separate field in the 1960s. In discussing the literature from the late 18th century onwards, it looks on the one hand for awareness in the work of the early economists of the effects of economic activity on the natural and social environment and of the feedback from the environment to the economy. On the other hand, it describes how economic theory developed in a way which made it increasingly relevant for the study of environmental issues and the design of economic policy.
    Keywords: History of thought; environment; natural resources
    JEL: B00 Q30 Q50
    Date: 2014–04–08
  10. By: Sandmo, Agnar (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: This paper tries to convey the essence of the economic theory of behaviour of individuals and firms to an audience of non-economists. The hypotheses of utility and profit maximization and their use as building blocks in the theory of market equilibrium are explained. The paper discusses the efficiency of the market mechanism and sources of market failure. It considers the origin of preferences and the role played by ethical and religious views for consumer demand and labour supply. It concludes by discussing the role of economic theory in the design of institutions and considers the view that the introduction of market incentives in new areas may be harmful to society.
    Keywords: Utility and profit maximization; incentives; welfare.
    JEL: A13 B40 D01
    Date: 2014–04–22
  11. By: Chamlou, Nadereh
    Abstract: Economics has rediscovered happiness even though the discipline has always been about human wellbeing. A growing evidence suggests that happier people can be more productive and innovative, which leads to profitability and economic growth. Thus, there are
    Keywords: economics of happiness, Arab Spring, North Africa, Islamic economics, freedom, governance
    Date: 2014
  12. By: Alexander W. Cappelen (Department of Economics, Copenhagen University); Ulrik H. Nielsen (Department of Economics, Copenhagen University); Bertil Tungodden (Norwegian School of Economics); Jean-Robert Tyran (Department of Economics, Copenhagen University); Erik Wengström (Department of Economics, Copenhagen University)
    Abstract: In this paper we provide new evidence showing that fair behavior is intuitive to most people. We find a strong association between a short response time and fair behavior in the dictator game. This association is robust to controls that take account of the fact that response time might be affected by the decision-maker's cognitive ability and swiftness. The experiment was conducted with a large and heterogeneous sample recruited from the general population in Denmark. We find a striking similarity in the association between response time and fair behavior across groups in the society, which suggests that the predisposition to act fairly is a general human trait.
    Keywords: Response Time, Dictator Game, Experiment, Fairness
    JEL: C90 D03 D60
    Date: 2014–04–02
  13. By: Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Kariv, Shachar (University of California, Berkeley); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We report an experimental test of the four touchstones of rationality in choice under risk – utility maximization, stochastic dominance, expected-utility maximization and small-stakes risk neutrality – with students from one of the best universities in the United States and one of the best universities in Africa, the University of Dar es Salaam. Although the US and the Tanzanian subjects come from different backgrounds and face different economic prospects, they are united by being among the most able in their societies. Importantly, many of whom will exercise an outsized influence over economic and political affairs. We find very small or no significant differences between the two samples in the degree of rationality according to a number of standard economic measures. An alternative approach is to take cognitive ability (IQ) as a proxy for economic rationality. We show that a canonical IQ test indicates a much larger development gap in rationality relative to our economic tests.
    Keywords: Development; rationality; revealed preference; stochastic dominance; expected utility; risk aversion; cognitive ability; experiment.
    JEL: D01 D03 D81 O12
    Date: 2014–01–28
  14. By: Daron Acemoglu
    Abstract: This paper revisits the important ideas proposed by Atkinson and Stiglitz’s seminal 1969 paper on technological change. After linking these ideas to the induced innovation literature of the 1960s and the more recent directed technological change literature, it explains how these three complementary but different approaches are useful in the study of a range of current research areas though they may also yield different answers to important questions. It concludes by highlighting several important areas where these ideas can be fruitfully applied in future work.
    JEL: E25 J31 O30 O31 O33
    Date: 2014–04
  15. By: Jan Kregel
    Abstract: In the context of current debates about the proper form of prudential regulation and proposals for the imposition of liquidity and capital ratios, Senior Scholar Jan Kregel examines Hyman Minsky's work as a consultant to government agencies exploring financial regulatory reform in the 1960s. As Kregel explains, this often-overlooked early work, a precursor to Minsky's "financial instability hypothesis"(FIH), serves as yet another useful guide to explaining why regulation and supervision in the lead-up to the 2008 financial crisis were flawed—and why the approach to reregulation after the crisis has been incomplete.
    Date: 2014–04
  16. By: Paul S. Willen
    Abstract: I consider four policies created to address the financial crisis: (1) the ability-to-repay requirement in mortgage underwriting; (2) reform of rating agency compensation, (3) risk retention in securitization, and (4) mandatory loan renegotiation. I show that according to standard models, policies (1)–(3) do not address the standard asymmetric information problems that afflict financial markets. Policy (4) could reduce the deadweight losses associated with asymmetric information but requires that policy makers allocate gains and losses.
    JEL: D61 D82 G21 G28
    Date: 2014–05
  17. By: Brañas-Garza, Pablo; Kernohan, David; Oyediran, Olusegun; Rivas, M. Fernanda
    Abstract: This experimental study examines latent racial prejudice toward out-groups among 152 Spanish college students when they make guesses about the contributions of others in a public good game. Prejudice is examined firstly from the perspective of a two-sided, implicitly-held belief toward any of the specified out-groups: Africans, Asians, Latin Americans and Western. Secondly, from an ordinal perspective of highest negative (positive) prejudice. Lastly models of racial beliefs are fitted for the four out-groups. Results suggest subjects expect Africans and Latin Americans to be less cooperative, but Asians and Western to be more cooperative, than they actually are. We also find that racial prejudices do not have unique determinants across the out-groups under study, nor do the determining factors work in similar directions.
    Keywords: Beliefs, Implicit Cognition, Multiculturalism, Prejudice, Public Good Game, Stereotypes
    JEL: C91 H41 J15
    Date: 2014–05–13
  18. By: Maurizio MARIOTTI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Massimo TAMBERI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)
    Abstract: With this paper we celebrate thirty years (1983-2013) of the present series of research papers "Quaderni di ricerca", after 400 issues of the publication. We analyze the available quantitative information from a descriptive point of view, evidencing the main research fields, and stressing, among other aspects, the progressive integration of the research of our department in the international community of researchers. From the qualitative side, we analyze the position of the series within the RePEc archive, in terms of total downloads and of two bibliometric indexes, showing the progressive improvement of the ranking of the "Quaderni".
    Keywords: Publishing, Research in Economics
    JEL: A
    Date: 2014–05

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