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on History and Philosophy of Economics |
| By: | Mauro Boianovsky |
| Abstract: | The origins of “capital fundamentalism’ – the notion that physical capital accumulation is the primary determinant of economic growth – have been often ascribed to H arrod’s and Domar’s proposition that the rate of growth is the product of the saving rate and of the outpu t - capital ratio. I t is argued here that development planners in the 1950s reinterpreted and adapted the growth formula to their agenda in order to calculate “capital requirements”. Development economists at the time (Lewis, Hirschman, Rostow and others) were aware that Harrod’s and Domar’s growth models addressed economic instability based on Keynesian multiplier analysis, which diff ered from their concern with long - run growth in developing economies. Harrod eventual ly applied his concept of the natural gro wth rate to economic development . He claimed that the growth of developing economies was determined by their ability to implement technical progress – not by capital accumulation, subject to diminishing returns. Dom ar pointed out that the increm ental capital - output ratio was more likely a passive result of the interaction between the propensity to save and technological progress, instead of a causal factor in the determination of growth. |
| Keywords: | Capital fundament alism, Harrod, Domar, development economics, saving |
| JEL: | B22 B31 O10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hec:heccee:2015-12&r=hpe |
| By: | Hein, Eckhard |
| Abstract: | The principle of effective demand, and the claim of its validity for a monetary production economy in the short and in the long run, is the core of heterodox macroeconomics, as currently found in all the different strands of post-Keynesian economics (Fundamentalists, Kaleckians, Sraffians, Kaldorians, Institutionalists) and also in some strands of neo-Marxian economics, particularly in the monopoly capitalism and underconsumptionist school In this contribution, we will therefore outline the foundations of the principle of effective demand and its relationship with the respective notion of a capitalist or a monetary production economy in the works of Marx, Kalecki and Keynes. Then we will deal with heterodox short-run macroeconomics and it will provide a simple short-run model which is built on the principle of effective demand, as well as on distribution conflict between different social groups (or classes): rentiers, managers and workers. Finally, we will move to the long run and we will review the integration of the principle of effective demand into heterodox/post-Keynesian approaches towards distribution and growth. |
| Keywords: | effective demand,employment,distribution,growth,Marx,Kalecki,Keynes |
| JEL: | E20 E21 E22 E24 E25 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:602015&r=hpe |
| By: | Gabriel Oliva |
| Abstract: | This paper explores the ways in which c ybernetics influenced the works of F. A. Hayek from the late 1940s onwar d. It shows that the concept of negative feedback, borrowed from cybernetics, was central to Hayek’s attempt of giving an explanation of the principle to the emergence of human purposive behavior. Next, the paper discusses Ha yek’s later uses of cybernetic ideas in his works on the spontaneous formation of social orders. Finally, Hayek’s view on the appropriate scope of the use of cybernetics is considered. |
| Keywords: | Cybernetics, F. A. Hayek, Norbert Wien er, Garrett Hardin, Ludwig von Bertalanffy |
| JEL: | B25 B31 C60 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hec:heccee:2015-11&r=hpe |
| By: | Ambrosino, Angela; Fontana, Magda; Gigante, Anna Azzurra (University of Turin) |
| Abstract: | The paper proposes a critical interpretation of the development of new institutional economics and of its relationship with other economic fields. Consistently with the oil-spot dynamics model, new institutionalism can be described as an enlargement of the mainstream that, in time, seems to further expand towards heterodoxy by branching and specializing. Institutional cognitive economics positions itself at the borders between these two areas. With its focus on the cognitive processes underlying institutional genesis and evolution, it is the result of the integration process between the ideas of new (D.C. North’s in particular) and old institutionalism (T. Veblen’s in particular) plus the injection of F. Hayek’s theories on the link between mind and institutions. Institutional cognitive economics also represents an example of interdisciplinary cross-fertilization that is taking place at the border of social sciences and that might represent the future of our discipline. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201544&r=hpe |
| By: | E. Roy Weintraub |
| Abstract: | In this review essay of Medema’s and Waterman’s collection of some of Samuelson’s writings in the history of economics, the author argues that Samuelson’s claim to have written “Whig History” is spurious. Moreover the author argues that Samuelson’s own writings on modern economics are , whether explicit or not, profoundly autobiographical. Samuelson, in constructing a literature ostensibly about c ontemporary economics, was simultaneously constructing a literature in which he and contemporary economics could be jointly considered and appraised. |
| Keywords: | Paul A. Samuelson, historiography, Whig History, aut obiography, history of economics |
| JEL: | B2 D5 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hec:heccee:2015-14&r=hpe |
| By: | Roy Grieve (Department of Economics, University of Strathclyde) |
| Abstract: | This paper returns to an issue I discussed in a review article published some twenty years ago** The subject under discussion was Anthony Brewer’s 1992 study*** Richard Cantillon: Pioneer of Economic Theory. That review provided a vehicle for consideration of Cantillon’s theory of value, particularly for questioning Brewer’s rejection of Cantillon’s analysis, on the ground that he (Brewer) understood it to propose a dead-end “land theory of value†which attempted to account for equilibrium relative values in terms of quantities of “land embodiedâ€. In the present paper a fuller critique of that land-embodied interpretation of Cantillon’s value theory is presented. From what might be described as a Sraffian perspective, we – contrary to Brewer - interpret Cantillon as offering a perceptive and valid analysis of the operation of the market mechanism in the case of a surplus producing system in which distribution is determined - exogenously to the price system - by social factors of property ownership and economic power. We suggest that, given Cantillon’s view (in a pre-industrial context) of land as a country’s principal economic resource, he may be said to have told a general story associating equilibrium commodity prices (“intrinsic valuesâ€) with the quantity and quality of land employed in production. Appreciating that an approach in terms simply of physical quantities of land could not serve to explain relative values under the complexity of real world conditions, he expressed his understanding in the form of a “cost of production theory†explaining intrinsic values as represented by the costs – comprised of wages and rents measured in money – incurred by entrepreneurs for the use of heterogeneous inputs of land and labour. Labour costs can be translated into land costs via Cantillon’s “Parâ€. These production costs reflect both the use of resources and the balance of economic power within society. Thus, on the subject of “intrinsic value†we read Cantillon as following not a crude land-embodied treatment, but instead a cost of production approach, an approach which would be further developed by the Classics and Marx as appropriate to later economic and social conditions. |
| Keywords: | Richard Cantillon's Essai, Value and Distribution; the "Par", the alleged "land theory" of value |
| JEL: | B11 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1506&r=hpe |
| By: | Marchionatti, Roberto; Mornati, Fiorenzo (University of Turin) |
| Abstract: | The paper deals with the debate on the General Economic Equilibrium in the 1930s in Vienna and at the London School of Economics and offers an interpretation of it different from that of the traditional narratives. It interprets the debate as a renewed confrontation between the two different classical methodological paths of research in GEE, the Paretian and the Walrasian ones. What emerges from this examination is a picture of different approaches and theories in competition, in particular on the issue of the relationship between theory and the real world. This was the fundamental issue at stake. Herein lies also the interest in those distant controversies for the current debate in economics. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:uto:cesmep:201404&r=hpe |
| By: | Kevin D. Hoover |
| Abstract: | The Great Recession and the financial crisis of 2007-09 prompted ca lls for fundamental reforms of economic theory. The role of theory in economics and in recent economic events is considered in light of two recen t books: the sociologist Richard Swedberg’s The Art of Social Theory and the economist André Orléan’s The Empire of Value: A New Foundation for Economics . |
| Keywords: | economic theory, neoclassical economics, sociology, abduction, mimetic hypothesis, monetary economy, fina ncial crisis, Great Recession |
| JEL: | A12 B41 A11 B40 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hec:heccee:2015-15&r=hpe |
| By: | Andreas Ortmann (School of Economics, UNSW Business School, UNSW); Leonidas Spiliopoulos (Center for Adaptive Rationality, Max Planck Institute for Human Development, Berlin, Germany) |
| Abstract: | Heuristics are all around us, both in the real world and the literature. There are many of them and there are many—too many—definitions of them. In this chapter we focus on the history of fast and frugal heuristics, as sketched out comprehensively in Gigerenzer, Todd, & the ABC Research Group (1999) and scores of follow-up books. Specifically, we contextualize the emergence of the “Ecological-Rationality” program as an explicit counterpoint to the “Heuristics-and-Biases” program initiated by Kahneman and Tversky that informed and inspired scores of early behavioural economists. Simple heuristics are here understood to be fast and frugal rules of thumb because they ignore information that is available. Also, they ought to reflect cognitive processes (and hence be able to predict) rather than be as-if modelling exercises that explain ex post. We first review in more detail how this battle of programs unfolded and then a) lay out what we consider the considerable accomplishments of the ER program, b) point out some overlooked connections between the ER program and economics, and c) enumerate what we consider to be open questions and challenges. |
| Keywords: | heuristics, simple heuristics, simplicity, model selection, beauty |
| JEL: | B20 B41 C02 C18 D01 D03 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2015-25&r=hpe |
| By: | Leonard, Carol S.; Yanovskiy, Konstantin Ė.; Shestakov, D. |
| Abstract: | In this paper we explore current understandings of the influence of political rights, among historical legacies, on economic development. We construct variables for selected political regimes for 1811-2010. We find significant association between individual rights and economic growth. We argue that current understanding of political regimes supportive of growth (Acemoglu, etc), should parse the concept of property rights to include the protection of the individual in their focus on private property rights protection, alone, respected in various forms of government, are insufficient; what matters is the security of individuals from arbitrary arrest, regardless of “type of regime”. Discretionary rights of rulers or democratic governments to arrest citizens undermines the protection of private property rights and other attributes classically given to democratic foundations of economic growth, for example, free press, freedom of the exercise of religious belief. We suggest, as a research agenda, that the power of the politically competitive system therefore comes from weakening discretionary authority over law enforcement |
| Keywords: | rule of law,Rule of Force,Personal Rights,Private Property Protection,Economic Growth |
| JEL: | P16 P50 N40 O40 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:121852&r=hpe |
| By: | Dimitrios Xefteris |
| Abstract: | It is well known that the Hotelling-Downs model generically fails to admit an equilibrium when voting takes place under the plurality rule (Osborne 1993). This paper studies the Hotelling-Downs model considering that each voter is allowed to vote for up to k candidates and demonstrates that an equilibrium exists for a non-degenerate class of distributions of voters’ ideal policies - which includes all log-concave distributions - if and only if (k=2). That is, the plurality rule (k=1) is shown to be the unique k-vote rule which generically precludes stability in electoral competition. Regarding the features of k-vote rules’ equilibria, first, we show that there is no convergent equilibrium and, then, we fully characterize all divergent equilibria. We study comprehensively the simplest kind of divergent equilibria (two-location ones) and we argue that, apart from existing for quite a general class of distributions when k = 2, they have further attractive properties - among others, they are robust to free-entry and to candidates’ being uncertain about voters’ preferences. |
| Keywords: | Hotelling-Downs model, equilibrium, multiple votes. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:09-2015&r=hpe |
| By: | Jean-Sébastien Vayre (Techniques, Relations, Actions, Marché, Espace public - CERTOP - Centre d'Etude et de Recherche Travail Organisation Pouvoir - CNRS - UTM - Université Toulouse 2 Le Mirail - UPS - Université Paul Sabatier - Toulouse 3) |
| Abstract: | Compte rendu d'ouvrage |
| Keywords: | sociologie, économie, travail créateur |
| Date: | 2015–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01227405&r=hpe |
| By: | Marchionatti, Roberto; Sella, Lisa (University of Turin) |
| Abstract: | After the ‘new Great Crisis’ exploded in 2008 it is widely recognized that mainstream macroeconomics - the last result of Lucas’s anti-Keynesian revolution of the 1980s which tried to give macroeconomics sound neo-Walrasian microeconomic bases - has failed to anticipate and then appraise the crisis. Has this crisis revealed a failure of this macroeconomics as a scientific theory? Mainstream macroeconomists defend their models on the basis of their alleged superiority in terms of clarity and coherence. The thesis of this paper is that this claim about superiority is false. The paper argues that the reasons for the failure of mainstream macroeconomics – in particular its poor predictive performance and interpretative weakness - reside in the implications of the neo-Walrasian legacy and the problems connected with the implementation of that programme |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:uto:cesmep:201502&r=hpe |
| By: | Yoshio Takigawa (Graduate School of Economics, Kobe University) |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1532&r=hpe |
| By: | Eun Mee Kim |
| Abstract: | South Korea has gained economic development despite the obstacles it faced as a wartorn country with little natural resources and capital. Poverty, lack of democracy, as well as war and conflict were challenges the country faced in the early 1960s; issues not very different from what many developing countries face in the 21st century. This paper focuses on the following topics during the most dynamic period in South Korea.s economic development from 1960s to 1980s: the developmental state and industrial policies; the role of the private businesses; and state.business relationship. |
| Keywords: | state.business relations, private sector, economic growth, Korea |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-103&r=hpe |
| By: | Isabella Weber (Peterhouse College, University of Cambridge) |
| Abstract: | This paper argues that both Smith and Marx find money to be necessary for the specialization of individual producers and the regulation of social production by market exchange. Increasing returns to scale constitute an incentive towards individual specialization of production and social division of labor. However, specialization is conditioned on the ability of specialized producers to provide their needs by exchange. A stable equilibrium of individually diversified production can emerge when social norms or limits to exchange prevent specialization. Specialization under conditions of barter constitutes a highly unstable equilibrium since the specialized producers fail regularly to provide their needs by exchange. It tends to either collapse back into a diversified equilibrium or to give rise to a socially accepted general equivalent, i.e. money. Money greatly increases the strategic complementarity of specialization by providing sufficient exchange certainty and a relatively stable specialized equilibrium can emerge. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1527&r=hpe |
| By: | Claude MORANGE (Université de la Sorbonne Nouvelle (Paris 3), France) |
| Abstract: | En 1811, se publicaron, casi simultáneamente, en Santiago de Compostela y Palma de Mallorca, dos traducciones de La Politique naturelle, del barón de Holbach, aunque sin mencionar el nombre del autor. En realidad, se trataba de la traducción de un compendio de la obra, editado en 1790. El examen detenido de las dos traducciones revela, no solo que son muy distintas, sino que los traductores censuraron el original, especialmente en todo lo que contenía de anticlericalismo. Nuevo ejemplo de la complejidad de las vías de penetración en España del pensamiento de la Ilustración.. |
| Keywords: | 1811, Holbach, La Política natural, Santiago de Compostela, Palma de Mallorca, Ilustración |
| JEL: | B1 B31 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:1515&r=hpe |
| By: | Harin, Alexander |
| Abstract: | In random–lottery incentive experiments, the choices of certain outcomes are stimulated by uncertain lotteries. This “certain–uncertain” inconsistency is evident, but only recently emphasized. Because of it, conclusions from a random–lottery incentive experiment that includes a certain outcome cannot be unquestionably correct. Well-known experimental results and purely mathematical theorems support this. The main result presented here is: The usual experimental systems of utility and prospect theories may need additional independent analyses in the context of the “certain–uncertain” inconsistency. |
| Keywords: | utility; prospect theory; experiment; incentive; random-lottery incentive system; Prelec; probability weighting function; |
| JEL: | C1 C9 C90 C91 C93 D8 D81 |
| Date: | 2015–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67911&r=hpe |
| By: | Oscar Gelderblom; Joost Jonker |
| Abstract: | We analyze the evolution of payments in the Low Countries during the period 1500-1800 to argue for the historical importance of money of account or ghost money. Aided by the adoption of new bookkeeping practices such as ledgers with current accounts, this convention spread throughout the entire area from the 14th century onwards. Ghost money eliminated most of the problems associated with paying cash by enabling people to settle transactions in a fictional currency accepted by everyone. As a result two functions of money, standard of value and means of settlement, penetrated easily, leaving the third one, store of wealth, to whatever gold and silver coins available. When merchants used ghost money to record credit granted to counterparts, they in effect created a form of money which in modern terms might count as M1. Since this happened on a very large scale, we should reconsider our notions about the volume of money in circulation during the Early Modern Era. |
| Keywords: | Money, cashless payments, coins and credit, Early Modern Low Countries |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucg:wpaper:0074&r=hpe |
| By: | Alberto Feenstra |
| Abstract: | The Dutch Republic is frequently depicted as an early example of a stateÕs credible commitment to debt. Yet these studies tend to overlook the implications of the RepublicÕs federal structure. This paper analyses the default by the province of Groningen during the 1680Õs, at the expense of its creditors in the province of Holland. It argues that GroningenÕs unique position within the federation prevented the market to punish the province for its misbehaviour. This was not a carefully thought-out plan, but the coincidental historical outcome of the interaction between creditors and provincial and federal authorities. Ultimately, the creditors resorted to essentially medieval sanctions to enforce a solution. |
| Keywords: | public debt, Dutch history, default, political economy, economic history |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucg:wpaper:0075&r=hpe |
| By: | Jordi Brandts; David J. Cooper |
| Abstract: | We introduce a new game to the experimental literature and use it to study how behavioral phenomena affect the tradeoffs between centralized and decentralized management. Our game models an organization with two divisions and one central manager. Each division must choose or be assigned a product. Ignoring asymmetric information, the underlying game is an asymmetric coordination game related to the Battle of the Sexes. In equilibrium, the divisions coordinate on identical products. Each division prefers an equilibrium where the selected products are closest to its local tastes while central management prefers the efficient equilibrium, determined by a randomly state of the world, which maximizes total payoffs. The state of the world is known to the divisions, but the central manager only learns about it through messages from the divisions who have incentives to lie. Contrary to the theory, overall performance is higher under centralization, where the central manager assigns products to divisions after receiving messages from the divisions, than under decentralization where the divisions choose their own products. Underlying this, mis-coordination is common under decentralization and divisions fail to use their information when they do coordinate. Mis-coordination is non-existent under centralization and there is a high degree of truth-telling by divisions as well. Performance under centralization is depressed by persistent sub-optimal use of information by central managers. |
| Keywords: | Coordination, experiments, Organizations, Asymmetric Information |
| JEL: | C92 D23 J31 L23 M52 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:854&r=hpe |
| By: | Williams, John C. (Federal Reserve Bank of San Francisco) |
| Abstract: | Presentation to Columbia Business School, New York, New York |
| Date: | 2015–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfsp:157&r=hpe |
| By: | Yvon Pesqueux (LIRSA - Laboratoire Interdisciplinaire de Recherche en Sciences de l'Action - Conservatoire National des Arts et Métiers [CNAM]) |
| Abstract: | Précurseurs et commentateurs en théorie des organisations |
| Keywords: | théorie des organisations |
| Date: | 2015–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01225915&r=hpe |
| By: | Josep Maria Vegara Carrió |
| Date: | 2015–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:954.15&r=hpe |
| By: | Grimm, Michael; Sipangule, Kacana; Thiele, Rainer; Wiebelt, Manfred |
| Abstract: | Pro-poor growth is a promising development concept that links economic growth and poverty reduction ...and is still an integrated part of recent concepts like inclusive growth and shared prosperity...but faces the danger of losing priority in the extended list of goals and targets of the SDGs. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:pegnpb:12015&r=hpe |