nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2014‒07‒05
fourteen papers chosen by
Erik Thomson
University of Manitoba

  1. The roots of "Western European societal evolution" By Zsinka, László
  2. Do economists need virtues? By David Lipka
  3. On Self-Interest and Greed By Gebhard Kirchg�ssner
  4. People Do Not Discount Heavily in Strategic Settings, but They Believe Others Do. By Cary Deck; Salar Jahedi
  5. Navigating Constraints: The Evolution of Federal Reserve Monetary Policy, 1935-59 By Carlson, Mark A.; Wheelock, David C.
  6. Narrative and deliberative instauration: The use of narrative as process and artefact in the social construction of institutions By William James Fear; Ricardo Azambuja
  7. La pensée économique à l'épreuve de la crise de 2008 By Jérôme Maucourant
  8. Can Aristotle Help Us Specify the Very Nature of Management Problem? By Marc Nikitin
  9. The Decline of Drudgery and the Paradox of Hard Work By Epstein, Brendan; Kimball, Miles S.
  10. A Human Capital Theory of Economic Growth: New Evidence for an Old Idea By Theodore R. Breton
  11. Happiness matters: the role of well-being in productivity By DiMaria, Charles Henri; Peroni, Chiara; Sarracino, Francesco
  12. De la finance éthique à l'éthique dans la finance By Michel Lelart
  13. A Historical Sketch of Macroeconometrics By Rahmanov, Ramiz
  14. La méthode en histoire et l'histoire comme méthode By Yannick Lemarchand; Marc Nikitin

  1. By: Zsinka, László
    Abstract: Jenő Szűcs wrote his essay entitled Sketch on the three regions of Europe in the early 1980s in Hungary. During these years, a historically well-argued opinion emphasising a substantial difference between Central European and Eastern European societies was warmly received in various circles of the political opposition. In a wider European perspective Szűcs used the old “liberty topos” which claims that the history of Europe is no other than the fulfillment of liberty. In his Sketch, Szűcs does not only concentrate on questions concerning the Middle Ages in Western Europe. Yet it is this stream of thought which brought a new perspective to explaining European history. His picture of the Middle Ages represents well that there is a way to integrate all typical Western motifs of post-war self-definition into a single theory. Mainly, the “liberty motif”, as a sign of “Europeanism” – in the interpretation of Bibó’s concept, Anglo-saxon Marxists and Weber’s social theory –, developed from medieval concepts of state and society and from an analysis of economic and social structures. Szűcs’s historical aspect was a typical intellectual product of the 1980s: this was the time when a few Central European historians started to outline non-Marxist aspects of social theory and categories of modernisation theories, but concealing them with Marxist terminology.
    Keywords: liberty topos, eurocentrism, structure analysis
    JEL: N01
    Date: 2014
  2. By: David Lipka
    Abstract: In many works Deirdre McCloskey criticizes professional economics for ignoring virtues. Even though I disagree with details of her analysis I concur with her general conclusions. In the paper I sketch my own perspective on how economists could profit from the virtue discourse as developed by Adam Smith. My argument is intended for economists who believe economics is about implications of individual choice. I distinguish behaviorist and mentalist interpretation and criticize the former. We all should be mentalists and admit the existence of the problem of interpretation. I briefly discuss neuroeconomics and evolutionary psychology as theories of interpretation and show that moral psychology can be viewed as one in morally relevant situations. I read Adam Smith’s Theory of Moral Sentiments as an important contribution to the moral psychology. I outline the Smithian system and show what economists can learn from it. They can improve their interpretive skills but also cultivate their general outlook of the world by understanding how knowledge of the market process shapes interpretation of the choice problem. Their general outlook can do better provided that it is balanced with the complete array of virtues. If not it may provide a distorted picture of reality.
    Keywords: Moral sentiments, Adam Smith, Virtue, Interpretation, mentalism, behaviorism
    JEL: B12 D01 D83
    Date: 2014–06
  3. By: Gebhard Kirchg�ssner
    Abstract: First the assumption of self-interest as applied in Economics is presented. Here we also discuss areas in which (many) people behave less self- but more other-regarding than traditional economic models assume. Then, greedy behaviour is considered as existing in the political and economic �world�. Here we refer to corruption as well as to the role of money as a positional good. We also discuss such behaviour in the academic world, in which money plays a role as well as reputation. Thus, while the assumption of mutually disinterested rationality is a very powerful instrument for analysing individual behaviour, to explain some phenomena we have to recognise that people are not only sometimes other-regarding, but also sometimes greedy, and that they might value money much more than traditional Economics assumes. We conclude with some remarks on what we can learn in this respect from Behavioural Economics.
    Keywords: Economic Model of Behaviour; Self-Interest; Altruism; Greed; Corruption
    JEL: B41
    Date: 2014–06
  4. By: Cary Deck (University of Arkansas and Chapman University); Salar Jahedi (RAND Corporation)
    Abstract: Several studies have shown that people greatly discount future benefits and costs. However, most of the direct laboratory evidence of this phenomenon has focused on individual choice experiments. This paper investigates the degree to which the timing of payments affects behavior in four commonly studies strategic settings: a Prisoner's Dilemma game, a Stag-Hunt game, a First Price Auction and a Second Price Auction. In all four settings, a two week delay in payoffs has a comparable effect to a 20% reduc- tion in current payoffs. A follow-up study suggests that it is an individual's strategic response to the anticipated discount rate of others that might be driving this behavior rather than a participant's own discount factor.
    Keywords: Strategic Behavior, Time Discounting, Experiments.
    Date: 2014
  5. By: Carlson, Mark A. (Board of Governors of the Federal Reserve System (U.S.)); Wheelock, David C. (Federal Reserve Bank of St. Louis)
    Abstract: The 1950s are often pointed to as a decade in which the Federal Reserve operated a particularly successful monetary policy. The present paper examines the evolution of Federal Reserve monetary policy from the mid-1930s through the 1950s in an effort to understand better the apparent success of policy in the 1950s. Whereas others have debated whether the Fed had a sophisticated understanding of how to implement policy, our focus is on how the constraints on the Fed changed over time. Roosevelt Administration gold policies and New Deal legislation limited the Fed's ability to conduct an independent monetary policy. The Fed was forced to cooperate with the Treasury in the 1930s, and fully ceded monetary policy to Treasury financing requirements during World War II. Nonetheless, the Fed retained a policy tool in the form of reserve requirements, and from the mid-1930s to 1951, changes in required reserve ratios were the primary means by which the Fed responded to expected inflation. The inability of the Fed to maintain a credible commitment to low interest rates in the face of increased government spending and rising inflation led to the Fed-Treasury Accord of March 1951. Following the Accord, the external pressures on the Fed diminished significantly, which enabled the Fed to focus primarily on macroeconomic objectives. We conclude that a successful outcome requires not only a good understanding of how to conduct policy, but also a conducive environment in which to operate.
    Keywords: Federal Reserve; monetary policy; reserve requirements; Fed-Treasury Accord; inflation
    JEL: E52 E58 N12
    Date: 2014–06–09
  6. By: William James Fear (Department of Organizational Psychology - Birkbeck College University of London); Ricardo Azambuja (MC - Management et Comportement - Grenoble École de Management (GEM))
    Abstract: Patient Safety is a global institution in the field largely assumed to have emerged following the publication of To Err Is Human by the Institute of Medicine in 1999. In this paper we demonstrate that Patient Safety has been constructed as an institution separately in the practice of anaesthesia since 1954 and in hospitalised care since 1964. The publication of To Err was, in fact, only one of a number of later field configuring events. We use Bruner's (1991) theory of narrative to frame the institution building process which we term deliberative instauration in recognition of the historic literature on the subject. We further link the process of institution building to Vygotsky's theory of social mediation and the use of artefacts in relation to the object of intended action. We conclude that a narrative can be understood as both an artefact and a process used in the social construction of institutions by professional psychological collectives (in this case physicians).
    Keywords: Institution; Artefact; Narrative; Patient Safety; Healthcare
    Date: 2014
  7. By: Jérôme Maucourant (TRIANGLE - Triangle : action, discours, pensée politique et économique - CNRS : UMR5206 - Université Lumière - Lyon II - Institut d'Études Politiques [IEP] - Lyon - École Normale Supérieure (ENS) - Lyon - Université Jean Monnet - Saint-Etienne)
    Abstract: La perpétuation, spécialement en Europe, des logiques libérales au sein des politiques économiques, deux années après la crise de 2008, peut surprendre. À côté d'une façon de " keynésianisme du désastre ", que l'on tente d'occulter ou d'abandonner, parce que le fétiche de la " reprise " semble paraître ou que les dettes publiques semblent excessives désormais, les offensives visant à la réduction des sphères publiques ont repris de la vigueur. Le FMI reprend son rôle de syndic de la banque internationale et les velléités de réglementation de la finance sont presque oubliées. À la déflation du public s'ajoute l'amoindrissement du commun : comme jamais, les lieux du commun se réduisent à mesure que s'utilisent à l'excès les ressources naturelles et que se constatent les irréversibilités environnementales. Tel est, sans doute, le prix à payer pour que la croissance des pays " émergents " ranime le Capital défaillant. Sans doute, mais pas seulement. Il est essentiel de prendre en compte un effet de rémanence idéologique. Le libéralisme, comme culture, s'est enraciné depuis deux siècles ; il possède, à l'image du discours religieux, une capacité étonnante à immuniser les consciences collectives des chaos du monde réel qu'il contribue à produire et entretenir. Sans ce ciment qui unit les consciences, le capitalisme ne tiendrait pas longtemps. Un aspect de cette culture nous concerne précisément : la croyance en une " science économique ", fiction qui rationalise, organise et justifie notre monde à partir de la référence centrale au " marché ". En ce sens, une part des productions savantes a une fonction mythopoiétique. D'où l'effet en retour que l'on doit signaler : si des mythes économiques contribuent à construire le monde, il faut les identifier comme tels et, finalement, alimenter la controverse sur le soubassement d'une science construite sur la centralité du marché. Cette place occupée par le marché a un avantage important dans le champ académique : négliger la puissance structurante du Capital. L'obsession du marché, en effet, revient à méconnaître la force d'un rapport social spécifique de séparation, ce qui est la marque de fabrique de l'idéologie ordinaire unissant dans le règne de l'idéel ce qui est séparé dans l'empire du matériel. Nous ferons donc, en premier lieu, une brève esquisse de ce qui fut " l'impérialisme de l'économie " des années 1970-1990, mouvement poussant l'économie " hors d'elle-même " et approfondissant l'autonomie supposée de celle-ci vis-à-vis des autres sciences sociales. En conséquence, il s'est constitué une clôture de la théorie, qui s'est immunisée contre nombre de faits : on prétend encore que la solution à la crise actuelle est l'institution de nouveaux marchés et la liquidation de tout ce qui peut s'apparenter à des garanties de l'Etat. Ces mécanisme de défense surgissent avec une vigueur qu'on ne lui avait pas connue depuis les années 1930, même s'il faisait quelques années que les crises mineures du capital mondialisé, celles des années 1990, suscitaient semblable tropisme. Ensuite, nous aborderons, successivement, l'étude de fragments révélateurs de trois importants économistes contemporains, dans le dessein d'illustrer que l'occultation du Capital, au profit du marché ou de ses simulacres, implique des impasses. Comme le prix " en mémoire d'Alfred Nobel " (offert par la Banque de Suède) est la distinction qu'affectionnent les économistes du courant dominant, nous choisirons donc d'évoquer quelques aspects des travaux de North, Stiglitz et Krugman. Bien que le triomphe de la " mentalité de marché " ait durablement ossifié le travail de nombreux économistes, ces économistes de renom se sont autorisés quelques émancipations révélatrices vis-à-vis de carcans longtemps respectés. Ce sont les graves dérives de la science économique qui les ont conduits à prendre leur distance vis-à-vis de discours ou de pratiques, lesquels, risquaient, à terme, de discréditer leur idéal scientifique. Stiglitz et Krugman sont assurément les plus critiques sur l'idéologie dominante imprégnant la grande majorité de leurs collègues , North prétendant, de façon moins hérétique, construire un cadre qui englobe la théorie néoclassique, de façon à rendre compte du changement. Néanmoins, le fait est que tous, à leur façon, redécouvrent la question politique, sans s'engager réellement sur la voie de l'économie politique qu'il nous faut distinguer de la science économique, structurée par une logique formaliste . Avant de conclure sur la nécessité d'aller au-delà de l'offre et de la demande, nous évoquerons une pensée française dans la mondialisation : Pierre Dockès s'inquiète de ce que la peur de la mondialisation ne soit que l'expression d'une peur régressive de l'altérité. Cette crainte sérieuse ne devrait-elle pas, pourtant, nous faire oublier que le " protectionnisme social et écologique " a des forts arguments en sa faveur, notamment dans l'Europe de ce début de siècle ?
    Keywords: science économique, crise de 2008, Krugman, North, Stiglitz
    Date: 2014
  8. By: Marc Nikitin (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans)
    Abstract: The question we address here is: "What is the very nature of managerial problems?". We first argue that real management problems, as opposed to technical problems, are those which do not have "a priori" solutions and for which the arguments for and against any important decision are more or less of equal weight. We then define managerial problems as recurrent dilemmas. Drawing on Aristotle's distinction between theoretical and practical sciences, we then try to analyze the consequences of the previous definition on an epistemological and a pedagogical point of view.
    Keywords: management ; managerial problem ; epistemology ; Aristotle
    Date: 2014–06–25
  9. By: Epstein, Brendan (Board of Governors of the Federal Reserve System (U.S.)); Kimball, Miles S. (University of Michigan)
    Abstract: We develop a theory that focuses on the general equilibrium and long-run macroeconomic consequences of trends in job utility. Given secular increases in job utility, work hours per capita can remain approximately constant over time even if the income effect of higher wages on labor supply exceeds the substitution effect. In addition, secular improvements in job utility can be substantial relative to welfare gains from ordinary technological progress. These two implications are connected by an equation flowing from optimal hours choices: improvements in job utility that have a significant effect on labor supply tend to have large welfare effects.
    Keywords: Labor supply; work hours; drudgery; income effect; substitution effect; job utility
    JEL: E24 J22 O40
    Date: 2014–06–06
  10. By: Theodore R. Breton
    Abstract: In 1960 Theodore Schultz expounded a human capital theory of economic growth that includes three elements: 1) Countries without much human capital cannot manage physical capital effectively, 2) Economic growth can only proceed if physical capital and human capital rise together, and 3) Human capital is the factor most likely to limit growth. I specify Schultz’s theory mathematically and test it in periods when global financial capital was highly mobile. I find that in 1870, 1910, and 2000, the average schooling attainment of the adult population largely determined the stock of physical capital/capita and GDP/capita in 42 market economies.
    Keywords: Human Capital, Schooling, Capital Investment, Economic Growth, Solow Model, Market Economies
    JEL: E13 I21 O11 O15 O41
    Date: 2014–01–01
  11. By: DiMaria, Charles Henri; Peroni, Chiara; Sarracino, Francesco
    Abstract: This article is about the link between people’s subjective well-being, defined as an evaluation of one’s own life, and productivity. Our aim is to test the hypothesis that subjective well-being contributes to productivity using a two step approach: first, we establish whether subjective well-being can be a candidate variable to study Total Factor Productivity; second, we assess how much subjective well-being contributes to productivity at aggregate level through efficiency gains. We adopt Data Envelopment Analysis to compute total factor productivity and efficiency indices using European Social Survey and AMECO data for 20 European countries. Results show that subjective well-being is an input and not an output to production.
    Keywords: productivity, subjective well-being, TFP, efficiency gains, life satisfaction, economic growth, DEA.
    JEL: E23 I31 O47
    Date: 2014–06–27
  12. By: Michel Lelart (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans)
    Abstract: En matière de finance, la référence à l'éthique devient plus populaire que jamais. Cela tient naturellement aux crises financières qui se suivent en s'amplifiant. La finance est en effet de moins en moins éthique, mais certaines pratiques financières le sont restées davantage. C'est le cas de la finance qui se veut éthique et de la finance islamique. C'est aussi, mais à un moindre degré, de la finance solidaire et de la microfinance. Ce papier est aussi l'occasion de montrer ce que ces différentes variétés de pratiques financières ont de particulier et de les comparer.
    Keywords: éthique ; finance éthique ; finance islamique ; finance solidaire ; microfinance ; finance informelle
    Date: 2014–06–26
  13. By: Rahmanov, Ramiz
    Abstract: The paper describes the evolutionary history of Macroeconometrics over the last one hundred years. Three main approaches are distinguished, their underlying principles are discussed and the weakness of each principle is considered. The paper also shows the current developments in the field and indicates the directions of the research currently undertaken.
    Keywords: Macroeconometrics, history, Cowles Commission, VAR, VECM, DSGE
    JEL: B41 C50 C6 C60
    Date: 2014
  14. By: Yannick Lemarchand (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Marc Nikitin (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans)
    Abstract: Nous abordons ici les deux types de problèmes auxquels sont confrontés les chercheurs qui s'intéressent à l'épaisseur temporelle des problèmes de management : d'une part l'étude de l'histoire d'un problème managérial peut être considérée comme une méthode pour l'approcher1, mais d'autre part ce recours suppose que les chercheurs en gestion qui s'aventurent sur ce terrain maîtrisent au moins les rudiments des méthodes de travail des historiens.
    Keywords: histoire de la gestion ; méthodes de recherche ; épistémologie de la gestion
    Date: 2014–06–25

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