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on History and Philosophy of Economics |
| By: | Vanberg, Viktor J. |
| Abstract: | [Introduction ...] The purpose of this essay is to take a closer look at the relation between the invisible hand paradigm that is at the heart of economists’ theoretical outlook at markets and the social contract paradigm. In support of the above-quoted claim that the contractarian paradigm can “provide us with the ‘bridge’ between the individual-choice calculus and group decisions,” I shall seek to show that this paradigm, with its individualistic approach to organized collective action, provides indeed the fitting complement to the invisible hand paradigm as a theory of spontaneous social order, paradigmatically exemplified by the order of the market. The paper is organized as follows. Section 2 looks at the principal tenets of the social contract tradition. Section 3 reviews the 18th century origins of the “invisible hand” paradigm as the theoretical core of the economics tradition. Section 4 examines the limits of invisible hand accounts, specifically with regard to the problems posed by social dilemmas. Section 5 deals with the modern revival of social contract theory. Section 6 looks specifically at the contractarian constitutionalism of James Buchanan, the economist among the “new contractarians.” The concluding section relates the contrast between the invisible hand paradigm and social contract theory to the distinction between the “two kinds of order,” spontaneous orders and corporate orders, that plays a central role in F.A. Hayek’s work. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:1604&r=hpe |
| By: | Roy Grieve (Department of Economics, University of Strathclyde) |
| Abstract: | Although the 18th century Franco-Irish financier Richard Cantillon is universally esteemed as an outstanding pioneer of economic analysis, his work is not immune to present-day misunderstanding. This paper identifies two current misreadings both relating to his concept of “intrinsic value.†Both need clearing-up. (1) Anthony Brewer (1992) claimed to find a fatal flaw in Cantillon’s theory of value. The present author (1993) demurred. That objection has not been taken up (or dismissed) in subsequent discussion of Cantillon’s work. We therefore have unfinished business. (2) A second issue has emerged. Modern “Austrian†commentators (who express great admiration for Cantillon) are promoting a seriously erroneous misinterpretation of his theory of value. We think it is time both to put forward, against Brewer’s allegation, a stronger defence of Cantillon’s theory, and also to make the point that Cantillon’s conception is fundamentally different from how (some) “Austrian†admirers apparently see it. |
| Keywords: | intrinsic value, distribution and value, "Austrian" theory, opportunity cost |
| JEL: | B11 B2 B31 B51 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1607&r=hpe |
| By: | Bettina Klaus; Flip Klijn |
| Abstract: | We study the structure of the set of (Nash) equilibria of a deferred acceptance game with complete lists: for a given marriage market with complete lists, men propose to women truthfully while women can accept or reject proposals strategically throughout the deferred-acceptance algorithm. Zhou (1991) studied this game and showed that a matching that is stable with respect to the true preferences can be supported by some preference profile (possibly a non-equilibrium one) if and only if it can be supported by an equilibrium as well. In particular, this result implies the existence of equilibria since the men-optimal stable matching is supported by true preferences and hence an equilibrium outcome. We answer an open question Zhou posed by showing that there need not exist an equilibrium matching that weakly dominates all other equilibrium matchings from the women's point of view (Theorem 2). We complement Zhou's and our findings by showing that the set of equilibrium matchings also need not be "connected" (Example 2). |
| Keywords: | matching; stability; complete lists; Nash equilibria |
| JEL: | C72 C78 D47 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:16.08&r=hpe |
| By: | Espín, Antonio M.; Exadaktylos, Filippos; Neyse, Levent |
| Abstract: | Trustful and trustworthy behaviors have important externalities for the society. But what exactly drives people to behave in a trustful and trustworthy manner? Building on research suggesting that individuals’ social preferences might be a common factor informing both behaviors, we study the impact of a set of different motives on individuals’ choices in a dual-role Trust Game (TG). We employ data from a large-scale representative experiment (N = 774), where all subjects played both roles of a binary TG with real monetary incentives. Subjects’ social motives were inferred using their decisions in a Dictator Game and a dual-role Ultimatum Game. Next to self-interest and strategic motives we consider preferences for altruism, spitefulness, egalitarianism, and efficiency. We demonstrate that there exists considerable heterogeneity in motives in the TG. Most importantly, among individuals who choose to trust as trustors, social motives can differ dramatically as there is a non-negligible proportion of them who seem to act out of (strategic) self-interest whereas others are driven more by efficiency considerations. Subjects’ elicited trustworthiness, however, can be used to infer such motivations: while the former are not trustworthy as trustees, the latter are. We discuss that research on trust can benefit from adding the second player’s choice in TG designs. |
| Keywords: | trust game,dictator game,ultimatum game,social preferences,self-interest |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:141321&r=hpe |
| By: | Chia-Lin Chang (Department of Applied Economics Department of Finance National Chung Hsing University Taichung, Taiwan.); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute, Erasmus School of Economics Erasmus University Rotterdam and Tinbergen Institute, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain.); Wing-Keung Wong (Department of Economics Hong Kong Baptist University Hong Kong, China and Department of Finance Asia University Taiwan.) |
| Abstract: | This paper provides a brief review of the connecting literature in management science, economics and finance, and discusses some research that is related to the three disciplines. Academics could develop theoretical models and subsequent econometric models to estimate the parameters in the associated models, and analyze some interesting issues in the three disciplines. |
| Keywords: | Management science, Economics, Finance, Theoretical models, Econometric models. |
| JEL: | A10 G00 G31 O32 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:1607&r=hpe |
| By: | James R. Lothian (Fordham University); George S. Tavlas (Bank of Greece and University of Leicester) |
| Abstract: | During the late-1940s and the early-1950s Milton Friedman favored a rule under which fiscal policy would be used to generate changes in the money supply with the aim of stabilizing output at full employment. He believed that the economy is inherently unstable because of endogenous movements in money supply under a fractional-reserve banking system. In her work, Anna Schwartz downplayed the role of monetary factors in business cycles and the role of monetary policy as a stabilization tool. We show how the joint work of Friedman and Schwartz from 1948 to 1958 led Friedman to view money as the “primary mover” of the business cycle and underpinned his shift to a rule based on money growth so that discretionary monetary policy would not act as a source of destabilizing shocks. The decisive factor in the evolution of Friedman’s thinking was the empirical confirmation that the Great Depression had been both initiated and deepened by the Fed. The largely neglected influence of Clark Warburton on the evolution of Friedman’s thinking provides a missing -- but crucial -- link in explaining Friedman’s recognition of the role of monetary factors in the Great Depression and of the Fed’s ability to offset the destabilizing effects produced by shifts from deposits into currency under a fractional-reserve banking system. |
| Keywords: | B22; E52 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:207&r=hpe |
| By: | DANILO FREITAS RAMALHO DA SILVA |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2015:007&r=hpe |
| By: | Toke S Aidt |
| Abstract: | The paper studies the influence of Gordon Tullock (1967) and the rent-seeking literature more generally on the study of corruption. The theoretical corruption literature with its emphasis on principal-agent relationships within government and rent creation by corruption politicians has largely, but not entirely, overlooked that contestable rents encourage unproductive use of real resources in seeking these rents. As a consequence, the literature underestimates the value of corruption control and the cost of corruption itself. |
| Keywords: | Rent seeking, Corruption |
| JEL: | D72 |
| Date: | 2016–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1621&r=hpe |
| By: | Paolo Ferri (College of Business, RMIT University); Maria Lusiani (Dept. of Management, Università Ca' Foscari Venice); Luca Pareschi (Dept. of Management, Università Ca' Foscari Venice) |
| Abstract: | This paper contributes to the growing history of accounting history by analysing the contents of all papers published in Accounting History, one among the leading journals of the field, through a recent and promising analytical technique called Topic Modeling. Based on literature, we know what accounting history is about, but we know less how the accounting history field has evolved. By adopting Topic Modeling, an automated procedure for coding the content of corpus of text based on Bayesian statistic, the paper complements prior assessments of the accounting history literature by providing accurate measures about the relative prevalence of research areas and their evolution over time. The analysis highlights three sets of topics not uncovered by previous categorizations. In particular, the ÔRegulationÕ topic, that refers to international accounting standards and auditing regulation, appears to be overlooked by previous reviews. In terms of dynamics we find that the ÔTechnical core of accountingÕ decreased in importance overtime in favour of more variegated and fragmented foci of research: this finding may substantiate the claimed shift from a conception of accounting as a technical practice to the one of accounting as a social practice, that is the transition from the so called ÔtraditionalÕ to ÔnewÕ accounting history. Moreover, we see a pluralisation in the range of issues that are under the lenses of accounting historians. Finally, our analysis suggests that the way in which accounting history is presented or Ôtalked aboutÕ has not changed much in the last 20 years. |
| Keywords: | Accounting history, Topic Modeling, Literature review, Journal |
| JEL: | M40 M48 H83 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:vnm:wpdman:116&r=hpe |
| By: | José Gabriel Palma |
| Abstract: | This paper aims to re-examine inequality in the current era of neo-liberal globalisation, with an emphasis on both highly unequal middle-income countries that have already implemented full-blown economic reforms (like Latin America and South Africa), and on OECD countries (like the US) now intent on replicating the inequality heights of the former. i) How do those middle-income countries end up having such unequal distributional outcomes? ii) Since oligarchies all over the world would gladly reproduce the same conditions, why until recently have only a few been able to get away with this degree of inequality? And iii) Why are there suddenly so many new entrants to the high-inequality club, especially from the OECD? In other words, how did Reagan and Thatcher and the fall of the Berlin Wall trigger a new process of "reverse catching-up", by which now it is the highly-unequal middle-income countries showing the advanced ones the shape of things to come? One might even argue that in the US not only is the 1% catching up with their Latin counterparts (who are used to appropriating between a quarter and a third of overall income), but that new developments such as Trump may be part of the same phenomenon: it is now the South that seems to show the North 'the image of their own future'. And regarding that future, it is tempting to say "welcome to the Third World"! We are all indeed converging in this neo-liberal era but, somehow unexpectedly, this convergence is towards features that so far have characterised a number of middle-income countries - e.g. huge inequalities due to mobile élites creaming off the rewards of economic growth, and 'magic realist' politics (that may lack self-respect but not originality). I also discuss why Piketty's persistence with the neo-classical theory of factor shares - a pretty much obsolete 1950s-style approach to the distribution of income - prevents him from bringing our understanding of current distributive affairs forward as much as he might. His neo-classical analysis not only does not 'fit the facts' (he has to resort to questionable parameters), but also leads him into a methodology and social ontology that assumes that particularly complex and over-determined processes (like the distribution of income) are just the simple sum of their parts. Therefore, their account can be reduced to the algebraic description of individual constituents (e.g., inequality as basically an endogenous outcome of r>g - and that would be all). I also outline an alternative narrative regarding why inequality is becoming so extreme in formerly more enlightened affluent societies. I conclude that in order to understand current distributive dynamics what really matters is to comprehend the forces determining the share of the rich — and in terms of growth, what they choose to do with it! |
| Keywords: | income distribution; inequality; ‘Palma Ratio’; homogeneous middle; ideology; neoliberalism; ‘new left’; institutional persistence; Latin America; Chile; South Africa; United States. |
| JEL: | D31 E11 E22 E24 E25 I32 J31 N16 N30 N36 O50 P16 |
| Date: | 2016–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1627&r=hpe |
| By: | Gros, Daniel |
| Abstract: | On both sides of the Atlantic, populism on the left and the right is on the rise. Its most visible standard-bearer in the United States is Donald Trump, the Republican Party’s presumptive presidential nominee. In Europe, there are many strands – from Spain’s leftist Podemos party to France’s right-wing National Front – but all share the same opposition to centrist parties and to the establishment in general. What accounts for voters’ growing revolt against the status quo? |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:11557&r=hpe |
| By: | THOMAZ TEODOROVICZ; TAINÁ LEANDRO; LUIZ ALBERTO ESTEVES |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2014:137&r=hpe |
| By: | Antonelli, Cristiano; David, Paul (University of Turin) |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201513&r=hpe |
| By: | CAROLINA MIRANDA CAVALCANTE; EMMANOEL DE OLIVEIRA BOFF |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2015:014&r=hpe |