nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2016‒02‒04
nine papers chosen by
Erik Thomson
University of Manitoba

  1. Not Beautiful, not Just, not Virtuous; 'And It Doesn't Deliver the Goods'. Capitalism and “Fear of Goods” in Keynes's Thought By Carabelli, Anna; Cedrini, mario
  2. Schumpeter’s Assessment of Adam Smith and The Wealth of Nations: Why He Got It Wrong By Andreas Ortmann; David Baranowski; Benoit Walraevens
  3. Hawtrey, Austerity, and the "Treasury View", 1918-25 By Clara Elisabetta Mattei
  4. Predicting Human Cooperation By John J. Nay; Yevgeniy Vorobeychik
  5. Fifty years of Cultural Economics. Exploring the roots in the history of economic thought By Luis Fernando Aguado; Luis Palma; Noemi Pulido
  6. Striving for balance in economics : towards a theory of the social determination of behavior By Hoff,Karla; Stiglitz,Joseph E.
  7. Is Benford's Law a Universal Behavioral Theory? By Villas-Boas, Sofia; Fu, Qiuzi; Judge, George
  8. Global economic governance and economic policy: A personal perspective By Kemal Dervis
  9. Lawson on Veblen on Social Ontology By Davis, John B.; Wells, Tom

  1. By: Carabelli, Anna; Cedrini, mario (University of Turin)
    Abstract: Offering a view of the other side of the liquidity-issue, the paper elaborates on the concept of “fear of goods” in Keynes’s thought. It therefore illustrates numerous evidences of “fear of goods” in his economics, and aims to show that the notion might be considered as playing a quite important role as organising concept, helping to establish connections between ideas that are apparently only weakly related. The article fosters an interpretation of the development of Keynes’s theoretical arguments and proposed policy instruments for both domestic and global economy, as reactions to the “fear of goods” of capitalism, which Keynes saw as an inborn propensity of monetary economies of production.
    Date: 2014–10
  2. By: Andreas Ortmann (School of Economics, UNSW Business School, UNSW); David Baranowski (School of Economics, UNSW Business School, UNSW); Benoit Walraevens (School of Economics, UNSW Business School, UNSW)
    Abstract: In his History of Economic Analysis, Joseph Schumpeter (Schumpeter 1954a) dismissed Adam Smith’s Nature and Causes of the Wealth of Nations (Smith 1976) in a blunt and ad hominem manner. We argue that Schumpeter’s assessment resulted from his failure to appreciate the rhetorical structure of Smith’s masterpiece, a failure largely due to Schumpeter not having access to student notes of Smith’s lectures on rhetoric that surfaced only after Schumpeter’s death.
    Keywords: Adam Smith, The Wealth of Nations, rhetoric, rhetorical structure of The Wealth of Nations, Schumpeter , History of Economic Analysis
    JEL: B10 B12 C70 C72
    Date: 2015–12
  3. By: Clara Elisabetta Mattei
    Abstract: In Great Britain the seven years following WWI were marked by rigorous austerity policies. From 1918 to 1925 the main objectives were budget cuts and monetary deflation. Certainly, being the central department for financial policies, the British Treasury had decisive authority in setting such economic agenda. In particular, the official who had the greatest weight with chancellors of the Exchequer was the Controller of Finance, Basil P. Blackett (1917-1922), followed by Sir Otto Niemeyer (1922-1927). Their papers in the Treasury files reveal that the economist Ralph Hawtrey was the primary source of economic knowledge for Blackett and especially for Niemeyer. This work proves that Hawtrey's original economic theory provided solid theoretical justifications for the austerity policies. Hawtrian economics refined and strengthened the economic stance of the senior officials of the British Treasury. This study draws on Hawtrey's most important scientific works together with his press articles and copious Treasury papers to unravel the conceptual building blocks of Hawtrey's austerity doctrine. It emerges that his policy prescriptions ensued directly from his economic model. Hawtrey advocated monetary stabilization through the management of the bank rate, budgetary rigor, and rejection of public investment, all of which became widely established goals among other orthodox economic institutions, from the Bank of England to the League of Nations. This paper reveals that, in the early post WWI years, economic theory had clear operative force on policymaking.
    Keywords: Ralph Hawtrey, Austerity, Treasury View, Interwar Years, Deflation, Savings
    Date: 2016–01–29
  4. By: John J. Nay; Yevgeniy Vorobeychik
    Abstract: The Prisoner's Dilemma has been a subject of extensive research due to its importance in understanding the ever-present tension between individual self-interest and social benefit. A strictly dominant strategy in a Prisoner's Dilemma (defection), when played by both players, is mutually harmful. Repetition of the Prisoner's Dilemma can give rise to cooperation as an equilibrium, but defection is as well, and this ambiguity is difficult to resolve. The numerous behavioral experiments investigating the Prisoner's Dilemma highlight that players often cooperate, but the level of cooperation varies significantly with the specifics of the experimental predicament. We present the first computational model of human behavior in repeated Prisoner's Dilemma games that unifies the diversity of experimental observations in a systematic and quantitatively reliable manner. Our model relies on data we integrated from many experiments, comprising 168,386 individual decisions. The computational model is composed of two pieces: the first predicts the first-period action using solely the structural game parameters, while the second predicts dynamic actions using both game parameters and history of play. Our model is extremely successful not merely at fitting the data, but in predicting behavior at multiple scales in experimental designs not used for calibration, using only information about the game structure. We demonstrate the power of our approach through a simulation analysis revealing how to best promote human cooperation.
    Date: 2016–01
  5. By: Luis Fernando Aguado; Luis Palma; Noemi Pulido (Faculty of Economics and Management, Pontificia Universidad Javeriana Cali)
    Abstract: The objective of this paper is to backtrack key elements from the economic thought which limited and then allowed the approach of the economy to the analysis of cultural goods and services. The contribution of this paper is double. On the one hand, we synthesize how the modeling of consume of cultural goods was embodied to economic analysis, with this aim we use a selective revision of the literature of prestigious economists on the economic thought history. On the other hand, we describe the elements which form the basis of cultural economics as a dynamic area of specialization, which be perfectly identified and with an intellectual prestige on the economy.
    Keywords: cultural goods; cultural economics; economic thought; leisure.
    JEL: Z11 B12 B13
    Date: 2016–01
  6. By: Hoff,Karla; Stiglitz,Joseph E.
    Abstract: This paper is an attempt to broaden economic discourse by importing insights into human behavior not just from psychology, but also from sociology and anthropology. Whereas the concept of the decision-maker in standard economics is the rational actor and, in early work in behavioral economics, the quasi-rational actor influenced by the context of the moment of decision-making, in some recent work in behavioral economics the decision-maker could be called the enculturated actor. This actor's preferences, perception, and cognition are subject to two deep social influences: (a) the social contexts to which he has become exposed and, especially, accustomed; and (b) the cultural mental models?including categories, identities, narratives, and worldviews?that he uses to process information. The paper traces how these factors shape individual behavior through the endogenous determination of preferences and the lenses through which individuals see the world?their perception and interpretation of situations. The paper offers a tentative taxonomy of the social determinants of behavior and describes the results of controlled and natural experiments that only a broader view of these determinants can plausibly explain. The perspective suggests more realistic models of human behavior for explaining outcomes and designing policies.
    Keywords: Cultural Policy,Economic Theory&Research,Psychology,Educational Sciences,Environmental Economics&Policies
    Date: 2016–01–21
  7. By: Villas-Boas, Sofia; Fu, Qiuzi; Judge, George
    Keywords: Social and Behavioral Sciences
    Date: 2015–10–22
  8. By: Kemal Dervis
    Abstract: The policy advice given by economists in international institutions is influenced by their prior academic work. In my case, applied general equilibrium work resulted both in a belief in the necessity of decentralized markets and in a distrust of their ability to be stable. A career in international institutions can also create a global outlook that can be a public good when trying to achieve collective action while accommodating legitimate but narrower national interests. Finally, even if an underlying economic strategy is well designed, emphasis on communications with multiple audiences is crucial for both national and international policy success.
    Keywords: global economic governance, international institutions
    Date: 2015
  9. By: Davis, John B. (Department of Economics Marquette University); Wells, Tom (Leiden University)
    Abstract: Human development is meant to be transformational in that it aims to improve people’s lives by enhancing their capabilities. But who does it target: people as they are or the people they will become? This paper argues that the human development approach relies on an understanding of personal identity as dynamic rather than as static collections of preferences, and that this distinguishes human development from conventional approaches to development. Nevertheless this dynamic understanding of personal identity is presently poorly conceptualized and this has implications for development practice. We identify a danger of paternalism and propose institutionalizing two procedural principles as side constraints on development policies and projects: the principle of free prior informed consent, and the principle of democratic development.
    Keywords: human development policy, personal identity, paternalism, informed consent, autonomy, democracy, capability approach
    JEL: D63 D99 L31 O15 O29
    Date: 2016–01

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