nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2015‒06‒05
29 papers chosen by
Erik Thomson
University of Manitoba

  1. Econometrics as a Pluralistic Scientific Tool for Economic Planning: On Lawrence R. Klein's Econometrics By Erich Pinzón Fuchs
  2. Conceptualizing the formation and role of expectations before 1950: George Katona's thought By Pierrick Dechaux
  3. Games on concept lattices: Shapley value and core By Ulrich Faigle; Michel Grabisch; Andres Jiménez-Losada; Manuel Ordóñez
  4. A simple case of rationality of escalation By Pierre Lescanne
  5. About some distortions in the interpretation of 'The Problem of Social Cost' By Claude Ménard
  7. On the Existence of Approximate Equilibria and Sharing Rule Solutions in Discontinuous Games By Philippe Bich; Rida Laraki
  8. Debunking Mill's "Fourth fundamental proposition on capital" By Roy H Grieve
  9. Pouvoir de marché, stratégies et régulation: Les contributions de Jean Tirole, Prix Nobel d'Economie 2014 By David Encaoua
  10. Narrative and deliberative instauration: The use of narrative as process and artefact in the social construction of institutions By William James Fear; Ricardo Azambuja
  12. Proving the existence of macropsychological phenomena? The Katona-Tobin controversy over the predictive value of attitudinal data By Pierrick Dechaux
  14. Preconditions of world economic crisis and needs for qualitative changes in economic theory and practise By Vladimir Jovanoviæ, Marija Jovanoviæ
  15. Bertrand-Edgeworth games under triopoly: the payoffs By De Francesco, Massimo A.; Salvadori, Neri
  16. The Theory of a Heliospheric Economy By Thomas Tarler
  17. A Nash Equilibrium in Electoral Competition Models By Shino Takayama; Yuki Tamura
  18. Reducing Evolutionary Stability to Pure Strategies in Positive Semidefinite Games By Ido Polak; Joseph Abdou
  19. Fear of novelty : a model of scientific discovery with strategic uncertainty By Damien Besancenot; Radu Vranceanu
  20. Teaching the Economic Way of Thinking Through Op-eds By Joshua C. Hall; Marta Podemska-Mikluch
  21. The Half-Life of Happiness: Hedonic Adaptation in the Subjective Well-Being of Poor Slum Dwellers to a Large Improvement in Housing By Sebastian Galiani; Paul J. Gertler; Raimundo Undurraga
  22. Creating the Environment for Entrepreneurship through Economic Freedom By Joshua C. Hall; Robert A. Lawson; Saurav Roychoudhury
  23. Indonesian Macro Policy through Two Crises By Prayudhi Azwar; Rod Tyers
  24. What understanding of capital for tomorrow? By Gaël Giraud
  26. What Would Madison Say? By Bruce M. Owen
  27. Les deux critiques du capitalisme numérique By Sebastien Broca
  28. Managing the climate commons at the nexus of ecology, behaviour and economics By Alessandro Tavoni; Simon Levin
  29. Economic Size and Debt Sustainability against Piketty's Capital Inequality By Hyejin Cho

  1. By: Erich Pinzón Fuchs (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: Lawrence R. Klein (1920-2013) played a major role in the construction and in the further dissemination of econometrics from the 1940s. Considered as one the main developers and practitioners of macroeconometrics, Klein's influence is reflected in his application of econometric modelling “to the analysis of economic fluctuations and economic policies” for which he was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 1980. The purpose of this paper is to give an account of Klein's image of econometrics focusing on his early period as an econometrician (1944-1950), and more specifically on his period as a Cowlesman (1944-1947). Independently of how short this period might appear, it contains a set of fundamental publications and events, which were decisive for Klein's conception of econometrics, and which formed Klein's unique way of doing econometrics. At least four features are worth mentioning, which characterise this uniqueness. First, Klein was the only Cowlesman who carried on the macroeconometric programme beyond the 1940s, even if the Cowles had already abandoned it. Second, his pluralistic approach in terms of economic theory allowed him not only to use the Walrasian framework appraised by the Cowles Commission and especially by T.C. Koopmans, but also the Marxian and Keynesian frameworks, enriching the process of model specification and motivating economists of different stripes to make use of the nascent econometrics. Third, Klein differentiated himself from the rigid methodology praised at Cowles; while the latter promoted the use of highly sophisticated methods of estimation, Klein was convinced that institutional reality and economic intuition would contribute more to econometrics than the sophistication of these statistical techniques. Last but not least, Klein never gave up what he thought was the political objective of econometrics: economic planning and social reform.
    Date: 2014–10
  2. By: Pierrick Dechaux (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: This article analyzes Katona's theory of expectations and compares it to that of Keynes and Hicks. It discusses the implicit and explicit debates on the introduction of psychology in economic theory. The aim of this paper is twofold: define Katona's thought and examine the impact of this work on the debate on expectations in macroeconomics. This paper shows that Katona is the only author, to our knowledge, who develops both an empirical and theoretical research program on expectations that borrows from the epistemology of Keynes. While rediscovering Katona's work, this paper contributes to highlight the forgotten methodology that initiated the construction of confidence (or sentiment) indexes. It also discusses the implicit and explicit debates on the introduction of psychology in economic theory.
    Abstract: Cet article étudie la théorie des anticipations de Katona et la compare à celle de Keynes et de Hicks. Il poursuit deux objectifs : définir la pensée de Katona et examiner son impact dans le débat sur les anticipations en macroéconomie. Ce papier met en évidence que Katona est le seul auteur, à notre connaissance, à développer un programme à la fois empirique et théorique sur les anticipations qui empreinte à l'épistémologie de Keynes. En s'intéressant aux travaux peu étudiés de Katona, cet article remet en avant la méthodologie à l'origine de la construction des indicateurs de confiance. Il discute aussi les débats implicites et explicites sur l'introduction de la psychologie en théorie économique.
    Date: 2015–02
  3. By: Ulrich Faigle (Universität zu Köln - Mathematisches Institut); Michel Grabisch (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS); Andres Jiménez-Losada (Escuela Superior de Ingenieros - Universidad de Sevilla); Manuel Ordóñez (Escuela Superior de Ingenieros - Universidad de Sevilla)
    Abstract: We introduce cooperative TU-games on concept lattices, where a concept is a pair (S,S' ) with S being a subset of players or objects, and S' a subset of attributes. Any such game induces a game on the set of players/objects, which appears to be a TU-game whose collection of feasible coalitions is a lattice closed under intersection, and a game on the set of attributes. We propose a Shapley value for each type of game, axiomatize it, and investigate the geometrical properties of the core (nonemptiness, boundedness, pointedness, extremal rays).
    Abstract: Nous introduisons la notion de jeu coopératif sur les treillis de concepts, où un concept est une paire (S,S' ) avec S un sous-ensemble de joueurs et S' un sous-ensemble d'attributs. Un tel jeu induit un jeu sur l'ensemble des joueurs/objets, qui s'avère être un jeu TU dont la collection des coalitions réalisables est un treillis fermé sous l'intersection, et un jeu sur l'ensemble des attributs. Nous proposons une valeur de Shapley pour chaque type de jeu, l'axiomatisons et étudions les propriétés géométriques du cœur (conditions pour être non vide, borné et pointé).
    Date: 2014–10
  4. By: Pierre Lescanne (LIP - Laboratoire de l'Informatique du Parallélisme - CNRS - INRIA - UCBL - Université Claude Bernard Lyon 1 - PRES Université de Lyon - ENS Lyon - École normale supérieure - Lyon)
    Abstract: Escalation is the fact that in a game (for instance an auction), the agents play forever. It is not necessary to consider complex examples to establish its rationality. In particular, the $0,1$-game is an extremely simple infinite game in which escalation arises naturally and rationally. In some sense, it can be considered as the paradigm of escalation. Through an example of economic games, we show the benefit economics can take of coinduction.
    Date: 2013–09–03
  5. By: Claude Ménard (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: The extraordinary influence of The Problem of Social Cost" is now well acknowledged. Beyond the official recognition coming with the award of the Alfred Nobel Memorial Prize in Economic Sciences as well as the myriad citations, what may matter most, as emphasized by Mary Shirley (2013), is that in introducing the concept of 'transaction costs', Coase initiated a revolution in the way economists and social scientists should look at the organization of economic activities in a market economy. Actually, the concept of transaction could well be considered one of the most important in economic theory, together with the concept of the division of labor. As emphasized by Coase (1998), the two concepts complement each other. In order to take advantage of the division of labor economic actors must specialize their activity; this is sustainable and beneficial if and only if they can organize transactions among them at a cost that is less than the expected benefits. Paradoxically, this organizational dimension that Coase pinpointed as "The Institutional Structure of Production" in his Nobel Lecture has been largely neglected in the literature inspired by "The Problem of Social Cost." In what follows, I would like to show how this missing dimension is rooted in some misinterpretations of the 1960 paper (section 1) and what consequences it should have in partially redefining the research agenda sketched by Coase in his paper (section 2).
    Date: 2013–10–23
  6. By: Zoran Stefanovic, Branislav Mitrovic (University of Niš, Faculty of Economics)
    Abstract: In the last four decades there is a renewed interest within the economic theory for the institutional structures. Numerous, multiple and often unpredictable effects of institutions on economic process are differently reflected among the leading schools of economic analysis. Certainly, in this sense, the greatest attention should be given to the stream of economic thought known as institutional economics. This heterogeneous research orientation today is already clearly differentiated on Veblenian and the new institutional economics. The paper will make, in the light of its recorded achievements and the subjects of interest of its main protagonists, a general insight into the new institutional economics.
    Keywords: neoclassical economics, institutions, new institutional economics, property rights, transaction costs,
    JEL: B31 B41 B52 D21 D86 E02 N01
    Date: 2015–01
  7. By: Philippe Bich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Rida Laraki (Ecole Polytechnique [Palaiseau] - Ecole Polytechnique, IMJ - Institut de Mathématiques de Jussieu - UPMC - Université Pierre et Marie Curie - Paris 6 - UP7 - Université Paris Diderot - Paris 7 - CNRS)
    Abstract: This paper studies the existence of some known equilibrium solution concepts in a large class of economic models with discontinuous payo functions. The issue is well understood for Nash equilibria, thanks to Reny's better-reply security condition [34], and its recent improvements [3, 25, 35, 36]. We propose new approaches, related to Reny's work, and obtain tight conditions for the existence of an approximate equilibrium and of a sharing rule solution in pure and mixed strategies (Simon and Zame [38]). As byproducts, we prove that many auction games with correlated types admit an approximate equilibrium, and that in any general equilibrium model with discontinuous preferences, there is a sharing rule solution.
    Date: 2014–10–06
  8. By: Roy H Grieve (Department of Economics, University of Strathclyde)
    Abstract: J S Mill’s enigmatic “Fourth Proposition on Capital†has been brought to our notice by Steven Kates (2015). Kates takes a positive view of the proposition. Our focus is not, however, on Kates, but on the aforesaid proposition. The purpose of this paper is to demonstrate, via close examination of Mill’s explanatory examples, just how unsatisfactory are its foundations. We conclude that the doubters are justified: Mill’s Fourth Proposition is, demonstrably, a muddle.
    Keywords: J S Mill's "Fourth Proposition on Capital"; derived demand; Say's Law
    JEL: B12
    Date: 2015–05
  9. By: David Encaoua (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: This article is devoted to a perspective of the works of Jean Tirole on the topics mentioned by the Nobel Committee, namely the analysis of market power, its control mechanisms and the regulation of network activities and natural monopoly. It develops in three parts. The first explains why and how these works have contributed to a profound renewal of the Industrial Organization field by offering strong theoretical foundations. The second presents different contributions that advance our understanding of the Economics of Innovation. The third part refers to the works on the Economics of Regulation. In each part, the focus is on three aspects: i / the state of knowledge at the time of the work, ii / the analytical instruments and iii / the lessons that can be drawn. The article seeks to illustrate a common feature in many of these works, that of combining theoretical research leading to the knowledge's enlargement in various fields of economic analysis, and a choice of questions motivated by a strong concern to find solutions to some contemporary economic problems, based on a serious prior theoretical analysis.
    Abstract: Cet article est consacré à une mise en perspective des travaux réalisés par Jean Tirole sur les thèmes mentionnés par le communiqué du Nobel, à savoir l'analyse du pouvoir de marché, ses modalités de contrôle et la régulation des activités de réseaux et de monopole naturel. Il se développe en trois parties. La première explicite pourquoi et comment ces travaux ont participé à un profond renouveau de l'Economie Industrielle. La seconde présente les contributions participant à l'élaboration d'une véritable économie de l'innovation. La troisième partie se réfère aux travaux sur la régulation. Dans chacune de ces parties, l'accent est mis sur trois aspects : i/ l'état des connaissances au moment de ces travaux, ii/ les instruments d'analyse utilisés, et iii/ les enseignements que l'on peut en tirer. L'article cherche également à illustrer une caractéristique commune à plusieurs de ces travaux, celle de combiner, d'une part, une recherche théorique conduisant à un véritable renouvellement de nos connaissances dans différents champs de l'analyse économique, et d'autre part, un choix de questions motivées par une forte préoccupation à trouver des moyens de résolution de nombreux problèmes économiques contemporains, se fondant sur une sérieuse analyse théorique préalable.
    Date: 2015–04
  10. 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).
    Date: 2014
  11. By: Ivan Bozoviæ, Jelena Bozoviæ (University of Priština, Faculty of Economics, University of Priština, Faculty of Economics)
    Abstract: Economic recession which nowadays has affected economies in the majority of countries, starting with the most developed ones, whilst other countries record negative economic performance in the form of a more significant slowing down of economic growth, raised the question of its overcoming, both among the economic policy creators and among macroeconomic theoreticians. Economic policy measures, which should contribute to the finalization of negative economic movements and reverse them, are primarily oriented towards encouragement of aggregate demand, and in macroeconomics they are known as Keynesian economics. It is quite certain that the causes, and even more the consequences, of incidence and overcoming of economic crisis in the world will always remain to be the main topic of discussion among the entire community, and particularly among academic community. It happens very frequently that economists identify mortgage loans crises as the main nucleus of creating the economic crises, failing thereby almost every time to point out to the dark side i.e. the immoral side of the banks and other financial institutions responsible for granting bad loans. The intention of this paper is to point to the main causes of incidence and spreading of world economic crises. The paper also points towards a very important role and significance of the Keynesian economic theory in overcoming the consequences of such crises and struggle against economic depression.
    Keywords: economic crisis, neo-liberalism, interventionism, Keynesian theory, economic recovery
    JEL: E2 E12 E13 E44
    Date: 2014–10
  12. By: Pierrick Dechaux (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: This paper analyzes the controversy between George Katona and James Tobin that happened at the end of the nineteen fifties. The central problem of the paper concerns the nature of psychological phenomena. While Tobin defends that economic behavior stems from the individual, Katona tries to develop a macropsychological approach in which the individual plays a secondary role. The controversy thus reveals the arguments that initiated the developments of microeconomic theories and the construction of microeconomic data during the nineteen fifties.
    Date: 2015–02
  13. By: Petar Hafner, Milos Krstic (University of Niš, Faculty of Economics, University of Nis, Faculty of Mathematics and Science)
    Abstract: Behavioral economics and economic sociology arise and develop on the point where economics and psychology, as well as economics and sociology, overlap. Behavioral economics studies economic factors and psychological appearance that have a direct impact on economic behavior. On the other hand, economic sociology studies the behavioral norms of the social groups and the organizations. The correlation between the research subjects of these scientific disciplines imposes a need for specifying an interdisciplinary model of human behavior in society. The aim of this paper is to evaluate opportunities for the development of an interdisciplinary model of human behavior.
    Keywords: Economic sociology, behavioral economics, rational behavioral, interdisciplinary research
    JEL: A10 A14
    Date: 2015–01
  14. By: Vladimir Jovanoviæ, Marija Jovanoviæ (Pravni fakultet za privredu i pravosuðe, Univerzitet privredna akademija, Novi Sad; College of Economics and Administration, Belgrade)
    Abstract: TMain thesis of this work is that international financial crisis which occurred in 2007 and 2008 year, is only last in line of negative economic events, that rises from theory because of which economy has stopped to examine the phenomena from the rel world and become ideologue based on mathematics. Even those crises where initiated by cutting real wages in many countries in the economic periphery, in Latin America in the late 1970s, those roots can be followed in economic theory in 1950,s when empirical reality has become unpopular in academic circles. On a half development of that theoretical tsunami – from it beginning,s in 1970,s till contemporary financial crises – we supervene on destruction of production capacities of ex Soviet Union. Now it returns back like boomerang – the fading of wealth and social problems are reaching Europe and United States of America. This work represents thesis that these events has to be seen as continuous operation enforce of neoclassical and neo - liberal economics policy's that destroyed real wages and wealth. Processes that took more than three decades. Precondition for reconstruction of system of widespread welfare is apprehension that downfall of widespread welfare is not caused by market failure, but rather by theory failure.
    Keywords: economic crisis, crisis roots, market failure, financial crash, widespread welfare
    JEL: B52 F50
    Date: 2014–10
  15. By: De Francesco, Massimo A.; Salvadori, Neri
    Abstract: The paper extends the analysis of price competition among capacity constrained sellers beyond duopoly and symmetric oligopoly. The main focus is on the equilibrium payoffs under triopoly. The paper also includes insightful examples highlighting features of equilibrium which can arise in a triopoly but not in a duopoly. Most notably, the supports of the equilibrium strategies need not be connected, nor need be connected the union of the supports; further, an atom may exist for a firm different from the largest one.
    Keywords: Bertrand-Edgeworth; Price game; Oligopoly; Triopoly; Mixed strategy equilibrium
    JEL: C72 L13
    Date: 2015–05–27
  16. By: Thomas Tarler
    Abstract: Despite more than 50 years of human space exploration, no paper in the field of economics has been published regarding the theory of a space-based economy. The aim of this paper is to develop quantitative techniques to estimate conditions of the human heliospheric expansion. An empirical analysis of current space commercialization and reasoning from first economic principles yields an evolutionary prisoner's dilemma game on a dynamically scaled heterogeneous Newman-Watts Small World Network to generate a new space. The analysis allows for scalar measurements of behavior, market structures, wealth, and technological prowess, with time measured relative to the system. Four major phases of heliospheric expansion become evident, in which the dynamic of the economic environment drives further exploration. Further research could combine empirical estimations of parameters with computer simulations to prove results to inform long-term business plans or public policy to further incentivize human heliospheric domination.
    Date: 2015–05
  17. By: Shino Takayama (School of Economics, The University of Queensland); Yuki Tamura (School of Economics, The University of Queensland)
    Abstract: Since the introduction of better-reply security by Reny (1999), the literature studying the existence of a pure strategy Nash equilibrium (PSNE) in discontinuous games has grown substantially. In this paper, we introduce a weak notion of better-reply security, which is applicable to both quasiconcave and nonquasiconcave games. Our conditions for feeble better-reply security are simple, easy to verify and particularly useful in electoral competition games. We also provide necessary and sufficient conditions for the existence of a PSNE in a canonical electoral competition game. Finally, this paper demonstrates why a PSNE fails to exist when a particular type of discontinuity exists in a model.
    Keywords: Noncooperative games, discontinuous payoffs, pure strategy Nash equilibrium, existence of equilibrium, better-reply security, electoral competitions
    Date: 2015–05–27
  18. By: Ido Polak (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS); Joseph Abdou (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: This paper introduces a class of games called the positive semidefinite games, for which we show the absence of mixed and nonstrict ESS's. As a result, a strategy is an ESS if and only if it is strict Nash. One famous example in this class of games is Rock{Paper{Scissors. For a smaller class of games called the positive definite games, we prove a similar result forThis paper introduces a class of games called the positive semidefinite games, for which we show the absence of mixed and nonstrict ESS's. As a result, a strategy is an ESS if and only if it is strict Nash. One famous example in this class of games is Rock{Paper{Scissors. For a smaller class of games called the positive definite games, we prove a similar result for NSS's. This result opens the door to a corollary: for doubly symmetric games, the existence of an ESS is assured. This is an interesting result because of the stronger dynamic stability properties of ESS's as compared to NSS's. The coordination games played on the identity matrix are an example of games in this latter class. NSS's. This result opens the door to a corollary: for doubly symmetricgames, the existence of an ESS is assured. This is an interesting result because of the stronger dynamic stability properties of ESS's as compared to NSS's. The coordination games played on the identity matrix are anexample of games in this latter class.
    Date: 2014–03–14
  19. By: Damien Besancenot (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris 13 - Université Sorbonne Paris Cité (USPC) - CNRS); Radu Vranceanu (Economics Department - Essec Business School)
    Abstract: This paper analyzes the production of fundamental research as a coordination game played by scholars. In the model, scholars decide to adopt a new idea only if they believe that a critical mass of peers is following a similar research strategy. If researchers observe only a noisy idiosyncratic signal of the true scientifi…c potential of a new idea, we show that the game presents a single threshold equilibrium. In this environment, fundamental research proceeds with large structural breaks followed by long periods of time in which new ideas are unsuccessful. The likelihood of a new idea emerging depends on various parameters, including the rewards of working in the old paradigm, the critical mass of researchers required to create a new school of thought and scholars ability to properly assess the scientifi…c value of new ideas.
    Date: 2014–12–26
  20. By: Joshua C. Hall (West Virginia University, College of Business and Economics); Marta Podemska-Mikluch (Gustavus Adolphus College, Department of Economics and Management)
    Abstract: There are many goals an instructor may wish to accomplish in a course on economic principles. For us one goal should be the education of a generation of sensible and active members of civil society. This is an ambitious goal: it requires that students internalize the economic way of thinking and learn to exercise active citizenry. After experimenting with a variety of methods, we have concluded that requiring students to write an op-ed is the most conducive to the development of the economic way of thinking. Here we share what we have learned in the process, hoping that the pedagogical capability of writing an op-ed will encourage others to adopt the assignment into their classrooms.
    Keywords: Engagement, Op-ed, Principles of Economics, Writing
    JEL: A11 A13 A22 D01 D7 D72
    Date: 2015–05
  21. By: Sebastian Galiani (University of Maryland and NBER); Paul J. Gertler (UC Berkeley and NBER); Raimundo Undurraga (New York University)
    Abstract: A fundamental question in economics is whether happiness increases pari passu with improvements in material conditions or whether humans grow accustomed to better conditions over time. We rely on a large-scale experiment to examine what kind of impact the provision of housing to extremely poor populations in Latin America has on subjective measures of well-being over time. The objective is to determine whether poor populations exhibit hedonic adaptation in happiness derived from reducing the shortfall in the satisfaction of their basic needs. Our results are conclusive. We find that subjective perceptions of wellbeing improve substantially for recipients of better housing but that after, on average, eight months, 60% of that gain disappears.
    JEL: I31
    Date: 2015–05
  22. By: Joshua C. Hall (West Virginia University, College of Business and Economics); Robert A. Lawson (Southern Methodist University, Edwin L. Cox School of Business); Saurav Roychoudhury (Capital University, School of Management and Leadership)
    Abstract: In this paper we argue that the ability of people to freely trade, enter into contracts, and start businesses in a system of private property and the rule of law is crucial for productive entrepreneurship. One measure of how freely individuals can engage in economic activity is the Economic Freedom of the World (EFW) index. After examining the economic policies that harm economic freedom and possibly entrepreneurship, we highlight the correspondence between economic freedom and a number of measures of entrepreneurship. We conclude with some thoughts regarding future research involving economic freedom and entrepreneurship.
    Keywords: economic freedom, institutions, entrepreneurship, new firm
    JEL: M13 O50
    Date: 2015–05
  23. By: Prayudhi Azwar; Rod Tyers
    Abstract: Indonesia’s open, developing economy fielded shocks due to the Asian financial crisis (AFC) and the global financial crisis (GFC) quite differently. Although the origins of both crises were external, during the AFC the coincidence of financial contagion with domestic political upheaval saw the Indonesian economy collapse. By contrast, during the decade-later GFC, when most nations slumped into recession the Indonesian economy slowed but did not recess, achieving real growth of 6.1% (2008) and 4.5% (2009) and recording one of the world’s best performances for the period. This paper reviews these events and employs numerical modelling of stylized AFC and GFC shocks to show that some of the contrast stems from differences in the states of the global economy during the crises and the compositions of the external shocks in each case. This said, both shocks have capital flight elements and it is shown that the key policy responses include floating the exchange rate and fiscal expansions that are, where necessary, money financed. There is, nonetheless, evidence of evolution in Indonesian macroeconomic policy making between the crises that allowed its strong performance to be sustained.
    Keywords: Indonesia, External shocks, Financial crises, Exchange rates Macroeconomic policy
    JEL: E32 E44 E43 E58 F43 F47 N25
    Date: 2015–05
  24. By: Gaël Giraud (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: This paper discusses the thesis put forward by Piketty (2014a) stressing the risk of an explosion of wealth inequality because capital accumulates faster than labor income in several countries, especially in the U.US. Although the overall empirical conclusion on the rise of inequalities is indisputable, I point out that the economic modeling underlying this approach exhibits several important shortcomings. Moreover, there are more effective policy recommendations to fight against inequality than the one highlighted in the book —namely, a world-wide global tax on capital.
    Abstract: Ce papier examine la thèse avancée par Piketty (2014a) selon laquelle l'accumulation du capital plus rapide que celle des revenus du travail dans différents pays, en particulier aux Etats-Unis, pourrait provoquer une explosion des inégalités de patrimoine. Bien que la conclusion empirique globale sur la croissance des inégalités soit indiscutable, je montre que la modélisation économique sous-jacente à cette approche présente d'importantes lacunes. En outre, il existe des recommandations politiques bien plus efficace pour lutter contre les inégalités que celle qui conclut l'ouvrage, à savoir une taxe mondiale sur le capital.
    Date: 2014–12
  25. By: Rajko Bukviæ, Radica Pavlovic (Geographical Institute “Jovan Cvijiæ”, Belgrade; Megatrend University Belgrade, Faculty of Business Studies, Pozarevac)
    Abstract: Paper considers the characteristics of contemporary dominant neoclascical economic theory and theie relation to economic development. It was showed that it, with presumptions of the same value and significance of all economic activities, and borderless power of selfregulated market, not have possibilities and force to explain factors of economic development, genesis and widening of poverty, as in one separate country as in international relations. As new paradigm, that should to change neoclascical, it is emphasized Other canon, that is on many centuries tradition and biological metaphors grounded. That dates back to the Renessaince, was proved through experience of the now developed economies, through the use of policies that in contemporary world are vorbidden for the underdeveloped coutries, while the developed that use. Contrary to neoclassical policies, realized in (neo)liberal politics of Washington consensus, that lead to deindustrialization, policies of the Other canon, on policies like Marshall plan grounded, lead contrary to industrialization as the condition to leave the underdeveloped countries from crisis and poverty. Change of neoclassical economic paradigm in this sense is the condition for the growth of the quality of macroeconomic education and should to ensure better understanding of economic problems and processes.
    Keywords: Neoclassical economics, Other canon, industrialization, neoliberalism, Washington consensus, Marshall plan
    JEL: E13 O10 P27
    Date: 2014–10
  26. By: Bruce M. Owen (Stanford University)
    Abstract: Lawful political corruption is a costly feature of modern American politics, and a failure of Madisonian democracy. The propensity of political agents to self-service at the expense of the peoples’ well-being may not have changed much since 1787, but that propensity is now applied to a vast government that touches virtually every aspect of our lives. After examining conventional solutions to the problem of political corruption, this paper explores possible Madisonian remedies—that is, remedies invoking rivalrous political institutions. The paper con-cludes with a proposal for the addition of an "umpire" function to U.S. constitutional structure. Officials performing this function would have the power to veto legislation that significantly re-duces aggregate well-being or that produces regressive redistribution. Historical precedents, illustrative details, and impediments are discussed.
    Keywords: Madisonian democracy, political economy, constitutional law, corruption, Citizens United.
    JEL: H1 K1
    Date: 2015–05
  27. By: Sebastien Broca (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris 13 - Université Sorbonne Paris Cité (USPC) - CNRS)
    Abstract: Cet article cherche à mettre en lien l'évolution de l'économie numérique au cours des années 2000 avec deux critiques qui lui ont été successivement adressées : la critique de la propriétarisation de l'information et la critique du digital labour. Je m'appuie pour cela sur le cadre théorique proposé par Luc Boltanski et Ève Chiapello, qui montrent dans Le nouvel esprit du capitalisme qu'il existe un jeu dialectique permanent, en vertu duquel ce qui nie le capitalisme à un moment donné devient ultérieurement une nouvelle ressource pour son affirmation symbolique et matérielle. L'hypothèse de l'article est ainsi que la critique de la propriétarisation de l'information, portée par les acteurs du logiciel libre, des Creative Commons ou de l'open access, a été largement incorporée par l'économie numérique, comme le montre le succès actuel de business models reposant moins sur l'appropriation privative des ressources informationnelles que sur la participation gracieuse des utilisateurs à la création de valeur. Cette « incorporation » a ouvert la voix à un deuxième type de critique, celle du digital labour, qui ne porte plus sur les entraves à la circulation de l'information et du savoir, mais sur les formes de travail et les modalités de répartition de la valeur qui sont au cœur du (nouveau) capitalisme numérique. L'article analyse les ressorts (et certaines limites) de cette deuxième critique d'inspiration marxiste, qui substitue à un discours axé sur les libertés individuelles et le droit un discours centré sur le travail et les structures économiques.
    Date: 2015–01–05
  28. By: Alessandro Tavoni; Simon Levin
    Abstract: Sustainably managing coupled ecological–economic systems requires not only an understanding of the environmental factors that affect them, but also knowledge of the interactions and feedback cycles that operate between resource dynamics and activities attributable to human intervention. The socioeconomic dynamics, in turn, call for an investigation of the behavioural drivers behind human action. We argue that a multidisciplinary approach is needed in order to tackle the increasingly pressing and intertwined environmental challenges faced by modern societies. Academic contributions to climate change policy have been constrained by methodological and terminological differences, so we discuss how programmes aimed at cross-disciplinary education and involvement in governance may help to unlock scholars' potential to propose new solutions.
    JEL: N0
    Date: 2014–11–26
  29. By: Hyejin Cho (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: This article presents a methodology designed to facilitate alternative variables measuring economic growth. A capital-labor split of Cobb-Douglas function is adapted for use in the context of economic growth. A capital/income ratio and two fundamental law of capitalism originated by Thomas Piketty illustrate capital inequality undervalued than labor inequality. In addition, the article includes export and external debt as strong alternatives. Empirical data of the World Bank are analyzed to demonstrate broad differences in economic sizes. The case analysis on Latin America as an example of different sized economy is also discussed.
    Date: 2014–06–17

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