nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2014‒10‒13
eleven papers chosen by
Erik Thomson
University of Manitoba

  1. "Endogenous Money and the Natural Rate of Interest: The Reemergence of Liquidity Preference and Animal Spirits in the Post-Keynesian Theory of Capital Markets" By Philip Pilkington
  2. The Problem Of Sovereignty In The Liberal Conservatism Of Francois Guizot By Sergey Matveev
  3. Economics for Substantive Democracy By Manuel Couret Branco
  4. Henri Theil's Contributions to Demand Analysis Creation Date: 1989 By K.W. Clements; E.A. Selvanathan; S. Selvanathan
  5. How did we get to where we are now? Reflections on 50 years of macroeconomic and financial econometrics By Michael Wickens
  6. La formulation du modèle keynésien et le choix de l'unité de mesure By Alain Béraud
  7. A History of Bimetallism: Greece, Rome, Middle Ages, Modern Times Creation Date: 1999 By E.J. Weber
  8. How satisfied are the self-employed? A life domain view By Martin Binder; Alex Coad
  9. Qu'est-ce que la productivite? Comment la mesure-t-on? Quelle a ete la productivite du Canada pour la periode de 1961 a 2012? By Macdonald, Ryan; Gu, Wulong; Baldwin, John R.; Yan, Beiling
  10. Non-Implementability of Arrow-Debreu Equilibria by Continuous Trading Under Knightian Uncertainty By Frank Riedel; Patrick Beissner
  11. Cognitive Diversity, Binary Decisions, and Epistemic Democracy By John A Weymark

  1. By: Philip Pilkington
    Abstract: Since the beginning of the fall of monetarism in the mid-1980s, mainstream macroeconomics has incorporated many of the principles of post-Keynesian endogenous money theory. This paper argues that the most important critical component of post-Keynesian monetary theory today is its rejection of the "natural rate of interest." By examining the hidden assumptions of the loanable funds doctrine as it was modified in light of the idea of a natural rate of interest--specifically, its implicit reliance on an "efficient markets hypothesis" view of capital markets--this paper seeks to show that the mainstream view of capital markets is completely at odds with the world of fundamental uncertainty addressed by post-Keynesian economists, a world in which Keynesian liquidity preference and animal spirits rule the roost. This perspective also allows us to shed new light on the debate that has sprung up around the work of Hyman Minsky, calling into question to what extent he rejected the loanable funds view of financial markets. When Minsky's theories are examined against the backdrop of the natural rate of interest version of the loanable funds theory, it quickly becomes clear that Minsky does not fall into the loanable funds camp.
    Keywords: Capital Markets; Financial Economics; Financial Market Theory; Macroeconomics; Monetary Economics; Monetary Theory
    JEL: E00 E12 E40 E43 E44
    Date: 2014–09
  2. By: Sergey Matveev (National Research University Higher School of Economics)
    Abstract: The problem of sovereignty is one of the key issues of political philosophy as it prompts a key political question: “Who has the supreme state power?” Who is sovereign: the people, the representation, the monarch or God? The research of this topic was one of the most popular and fruitful areas in political philosophy of the 19th century. In his meditations on sovereignty Francois Guizot was seeking answers to specific questions, such as the causes of decline of the Revolution and the fall of the Napoleonic Empire, the fate of the Bourbon dynasty and vitality of the 1814 Charter. An examination of Guizot’s sovereignty conception would help to reconstruct an important part of political theory of this thinker, shed light on the philosophical roots of French liberalism, demonstrate the ideology’s relation to democratic tradition and reveal complex thinking concerning the status of the sovereignty problem in political practice
    Keywords: Francois Guizot, sovereignty, liberal conservatism, politics, power, society, democracy
    JEL: Z
    Date: 2014
  3. By: Manuel Couret Branco (Department of Economics, Universidade de Évora)
    Abstract: What is the scope of economics as a science, what is economics for? Real freedom or what we call substantive democracy has never been an objective of economics. In this perspective freedom, or the lack of it, would not be a purpose of a particular economic system, but at best one of its side effects. In this paper I sustain that economics’ discourse has become one the most substantial contributors to what could be called the erosion of democracy. The first argument used in this case against economics refers to its attempt to be considered a neo-naturalistic science; the second concerns the fact that economics considers democracy contradictory to the expression of its scientific rationality and; the third, that economics crowds out people from decision-making processes by pushing them into the hands of experts. What part should economics be called to play in this search for substantive democracy? This issue is all the more critical that economics has reached the status of a major political fact. Partisan political programs have essentially become economic programs, and economic variables have thereby become major global political issues. One of the ways for economics to contribute to substantive democracy is to propose an alternative discourse to mainstream economics. An economics favorable to substantive democracy should, thereby, be political rather than naturalistic, pluralist rather than monist and, instead of crowding out people from decisions processes, should aim at the co-production of economic knowledge with those concerned by the outcome of economic decisions.
    Keywords: Economic Theory; Political Economy; Democracy; Decision-Making.
    JEL: A13 B40 K00 P16
    Date: 2014
  4. By: K.W. Clements; E.A. Selvanathan; S. Selvanathan
  5. By: Michael Wickens
    Abstract: This lecture is about how best to evaluate economic theories in macroeconomics and finance, and the lessons that can be learned from the past use and misuse of evidence. It is argued that all macro/finance models are ‘false’ so should not be judged solely on the realism of their assumptions. The role of theory is to explain the data, They should therefore be judged by their ability to do this. Data mining will often improve the statistical properties of a model but it does not improve economic understanding. These propositions are illustrated with examples from the last fifty years of macro and financial econometrics.
    Keywords: Theory and evidence in economics, DSGE modelling, time series modelling, asset price modelling
    JEL: B1 C1 E1 G1
    Date: 2014–09
  6. By: Alain Béraud (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise)
    Abstract: Cet article analyse la façon dont Keynes et les keynésiens posèrent la question du choix de l'unité de mesure des agrégats macroéconomiques. Soulignant les rapports étroits qui existent entre les cours que Keynes professa entre 1933 et 1935 et les diverses versions du modèle IS-LM, il montre que les problèmes naissent de la façon dont Keynes avait abordé ce problème. Raisonner sur la valeur monétaire des agrégats conduit à dichotomiser le modèle et ne permet pas d'analyser correctement l'interdépendance entre le marché du travail d'une part et les marchés des biens et de la monnaie d'autre part. Dans le modèle ainsi formulé, il est impossible d'étudier de façon rigoureuse les effets d'une variation du salaire monétaire et l'on est conduit à penser, à tort, qu'il existe nécessairement un équilibre de plein emploi si le taux de salaire monétaire est flexible.
    Keywords: Keynes, IS-LM, unité de mesure
    Date: 2014–09
  7. By: E.J. Weber
  8. By: Martin Binder (Bard College, Berlin, Platanenstr, 24, 13156 Berlin, Germany; Max Planck Institute of Economics, Evolutionary Economics Group, Kahlaische Str.10, 07745 Jena, Germany; SPRU - Science Policy Research Unit, University of Susex, Falmer, Brighton, BN1 9SL, UK); Alex Coad (SPRU - Science Policy Research Unit, University of Susex, Falmer, Brighton, BN1 9SL, UK; RATIO, P.O. box 3203, SE-10364 Stockhold, Sweden; Department of Business and Management, Aalborg University, Fibigerstaede 4, 9220 Aalborg O, DK.)
    Date: 2014–09
  9. By: Macdonald, Ryan; Gu, Wulong; Baldwin, John R.; Yan, Beiling
    Abstract: Le present document fournit un apercu du programme de productivite de Statistique Canada et une breve description du rendement du Canada en matiere de productivite. Il definit la productivite et les diverses mesures utilisees pour examiner les differentes facettes de la croissance de la productivite. Il decrit la difference entre des mesures de productivite partielles (par exemple, la productivite du travail) et une mesure plus complete (productivite multifactorielle) ainsi que les avantages et desavantages de chacune de ces mesures. Le document explique pourquoi la productivite est importante. Il decrit sommairement comment la croissance de la productivite s?integre dans le cadre comptable de la croissance et comment on utilise ce dernier pour examiner les diverses sources de croissance economique. Il presente brievement les defis que les statisticiens doivent relever lorsqu?ils mesurent la croissance de la productivite. Il fournit egalement un survol de la productivite a long terme du Canada et compare celle-ci a celle des Etats-Unis, selon les niveaux de productivite et selon les taux de croissance de la productivite.
    Keywords: Economic accounts, Productivity accounts
    Date: 2014–09–15
  10. By: Frank Riedel (Center for Mathematical Economics, Bielefeld University); Patrick Beissner (Center for Mathematical Economics, Bielefeld University)
    Abstract: Under risk, Arrow-Debreu equilibria can be implemented as Radner equilibria by continuous trading of few long-lived securities. We show that this result generically fails if there is Knightian uncertainty in the volatility. Implementation is only possible if all discounted net trades of the equilibrium allocation are mean ambiguity-free.
    Keywords: Knightian Uncertainty, Ambiguity, General Equilibrium, Asset Pricing, Radner Equilibrium
    JEL: D81 C61 G11
    Date: 2014–09
  11. By: John A Weymark (Vanderbilt University)
    Abstract: In Democratic Reason, Hélène Landemore has built a case for the epistemic virtues of inclusive deliberative democracy based on the cognitive diversity of the group engaged in making collective decisions. She supports her thesis by appealing to the Diversity Trumps Ability Theorem of Lu Hong and Scott Page. In practice, deliberative assemblies often restrict attention to situations with only two options. In this paper, it is shown that it is not possible to satisfy the assumptions of the Diversity Trumps Ability Theorem when decisions are binary. The relevance of this theorem for democratic decision-making in non-binary situations is also considered.
    Keywords: epistemic democracy, Diversity Trumps Ability Theorem
    JEL: D7 Y8

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