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on History and Philosophy of Economics |
| By: | de la Fonteijne, Marcel R. |
| Abstract: | The book 'Capital in the Twenty-First Century' by the French economist Piketty about the inequality of income and wealth distribution is already quite a while in the spotlights. Throughout his book he uses two formulas which he has named ‘the first fundamental law of capitalism’ and ‘the second fundamental law of capitalism’. With his reasoning he tries to show that, with these laws in place, he is capable to explain inequality phenomena with respect to the income and wealth distribution. Without going into the significance of his reasoning and conclusions, we will show that the use of the laws, the way he does, is fundamentally wrong. We suggest alternative formulas and a new approach. The inequality r>g is in our opinion not a meaningful equation with respect to inequality. |
| Keywords: | sustainability, inequality, unemployment, GDP growth, income, wealth distribution |
| JEL: | E00 E10 E20 E60 H20 H30 H60 |
| Date: | 2014–12–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72719&r=hpe |
| By: | T.K Ahn; Loukas Balafoutas; Mongoljin Batsaikhan; Francisco Campos Ortiz; Louis Putterman; Matthias Sutter |
| Abstract: | A vibrant literature has emerged in recent years to explore the influences of human evolution and the genetic composition of populations on the comparative economic performance of societies, highlighting the roles played by the Neolithic Revolution and the prehistoric “out of Africa” migration of anatomically modern humans in generating worldwide variations in the composition of genetic traits across populations. The recent attempt by Nicholas Wade’s A Troublesome Inheritance: Genes, Race and Human History to expose the evolutionary origins of comparative economic development to a wider audience provides an opportunity to review this important literature in the context of his theory. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2016-5&r=hpe |
| By: | Hwang, Sung-Ha; Newton, Jonathan |
| Abstract: | This paper considers populations of agents whose behavior when playing some underlying game is governed by perturbed best (or better) response dynamics with perturbation probabilities that depend log-linearly on payoffs, a class that includes the logit choice rule. A convention is a state at which every agent plays a strategy that corresponds to the same strict Nash equilibrium of the underlying game. For coordination games with zero payoffs off-diagonal, it is shown that the difficulty of leaving the basin of attraction of a convention can be well approximated by only considering paths of transitions on which an identical perturbation repeatedly affects one of the populations. |
| Keywords: | Evolution; Coordination; Logit, Payoff dependence |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2016-12&r=hpe |
| By: | Makoto Shimoji |
| Abstract: | We analyze multi-receiver Bayesian persuasion games with heterogeneous beliefs, originating from Kamenica and Gentzkow (2011). We directly examine the sender's messages, which are supported by rationalizability. With no strategic interactions at the stage game, the sender's optimization problem can be viewed as a set of linear programming problems. We also show some generic properties of solutions. With strategic interactions at the stage game, we provide examples on two aspects of communication (only arising with the receivers' strategic interactions): "talking about others privately" and "tacit understandings", of which the latter is implied by forward induction. |
| Keywords: | Bayesian Persuasion Games, Multiple Receivers, Heterogeneous Beliefs |
| JEL: | C72 D83 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:16/08&r=hpe |
| By: | Rodriguez-Lara, Ismael |
| Abstract: | This paper studies the extent to which offers and demands in ultimatum games are consistent with equity theory when there is a joint endowment to be distributed. Using a within-subject design, we also investigate the importance of the bargaining power by comparing the subjects’ behavior in the ultimatum and the no-veto-cost game, which differ in the possible cost of responders rejecting the proposers’ offer. Our findings suggest that proposers are willing to reward responders for their contribution to the joint endowment in any of the two games. As for responders, their behavior is consistent with equity theory only in the no-veto-cost game (in which a rejection is costless for them) when the game is first played. When the no-veto-cost game is played after the ultimatum game, we observe that the responders’ demands usually exceed their contribution to the endowment. Finally, this paper reports evidence that the ultimatum and the no-veto-cost game differ in terms of efficiency and rejection rates. |
| Keywords: | equity, fairness, bargaining power, ultimatum game, no-veto-cost game, joint production, efficiency, rejection rates. |
| JEL: | C91 D3 D6 D63 |
| Date: | 2016–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72700&r=hpe |
| By: | Rene Carmona; Jean-Pierre Fouque; Seyyed Mostafa Mousavi; Li-Hsien Sun |
| Abstract: | We propose a model of inter-bank lending and borrowing which takes into account clearing debt obligations. The evolution of log-monetary reserves of $N$ banks is described by coupled diffusions driven by controls with delay in their drifts. Banks are minimizing their finite-horizon objective functions which take into account a quadratic cost for lending or borrowing and a linear incentive to borrow if the reserve is low or lend if the reserve is high relative to the average capitalization of the system. As such, our problem is an $N$-player linear-quadratic stochastic differential game with delay. An open-loop Nash equilibrium is obtained using a system of fully coupled forward and advanced backward stochastic differential equations. We then describe how the delay affects liquidity and systemic risk characterized by a large number of defaults. We also derive a close-loop Nash equilibrium using an HJB approach. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1607.06373&r=hpe |
| By: | Jean-Luc Gaffard (Observatoire français des conjonctures économiques) |
| Abstract: | L’Union Européenne et plus particulièrement la zone euro se sont construites au cours du dernier quart de siècle en appliquant une doctrine économique articulée autour de deux principes : la flexibilité des marchés de biens et du travail, la neutralité monétaire et budgétaire de l’action publique. C’est à un recul de la souveraineté des Etats auquel l’on a ainsi assisté au nom d’une certaine vision du libéralisme. Cette évolution institutionnelle est emblématique du paradoxe de la mondialisation (Rodrik 2011) qui veut que, faute d’un gouvernement mondial, la mondialisation des échanges requière une action des Etats réduite à l’application de règles intangibles édictées par la doctrine au détriment de la démocratie et des arbitrages que celle‐ci implique. Il n’y aurait pas d’alternative autre que le repli à l’abri des frontières nationales permettant éventuellement de sauvegarder le principe démocratique mais au détriment de l’expansion des échanges et, possiblement, de la croissance. Pourtant, la question de la souveraineté comme celle du libéralisme ne sauraient être tranchées aussi facilement. Un débat existe qui conduit à considérer qu’une alternative au modèle du moment est possible qui rétablit les Etats dans leurs prérogatives sans qu’il faille renoncer aux bénéfices de la mondialisation. |
| Keywords: | Liberalisme; Politique économique |
| JEL: | P1 P16 P17 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/22v67d4lc79f494i53l6lmau2v&r=hpe |
| By: | Olivier Accominotti; David Chambers |
| Abstract: | This article explores the risks and returns to currency speculation during the 1920s and 1930s. We study the performance of two well-known technical trading strategies (carry and momentum) and compare them with that of a fundamentals-based trader: John Maynard Keynes. Technical strategies were highly profitable during the 1920s and even outperformed Keynes. In the 1930s, however, both technical strategies and Keynes performed relatively poorly. While our results reveal the existence of profitable opportunities for currency traders in the interwar years, they suggest that such profits were necessary compensation for enduring the substantial risks that all strategies entailed. |
| Keywords: | carry; momentum; foreign exchange; currency markets; currency crises |
| JEL: | F31 G14 G15 N22 N24 |
| Date: | 2016–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64722&r=hpe |