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on History and Philosophy of Economics |
| By: | John B. Davis (Marquette University; University of Amsterdam) |
| Abstract: | This paper explains the continuing relevance of Keynes’s philosophical thinking in terms of his anticipation of complexity thinking in economics. It argues that that reflexivity is a central feature of the philosophical foundations of complexity theory, and shows that Keynes employed an understanding of reflexivity in both his philosophical and economic thinking. This argument is first developed in terms of his moral science conception of economics and General Theory beauty contest analysis. The paper advances a causal model that distinguishes direct causal relationships and reflexive feedback channels, uses this to distinguish Say’s Law economics and Keynes's economics, and explains the economy as non-ergodic in these terms. Keynes’s policy activism is explained as a complexity view of economic policy that works like self-fulfilling and self-defeating prophecies. The paper closes with a discussion of the ontological foundations of uncertainty in Keynes's thinking, and comments briefly on what a complexity-reflexivity framework implies regarding his thinking about time. |
| Keywords: | Keynes, complexity, reflexivity, non-ergodic, policy activism, uncertainty, time |
| JEL: | E12 B41 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2016-36&r=hpe |
| By: | Kanbur, Ravi |
| Abstract: | The subject of this essay is formed from three classic pieces of writing: The End of Laissez-Faire by John Maynard Keynes, The End of History? by Francis Fukuyama, and The Structure of Scientific Revolutions by Thomas Kuhn. All three essays were concerned with the evolution of ideas, with Keynes and Fukuyama additionally arguing for the centrality of ideas and consciousness in determining material outcomes and government policy. I wish to argue that neither Kuhn’s nor Fukuyama’s “revolutionary” account fits the bill for the path of change in the ideas of political economy. Rather, despite the title of his essay, the gradual and multilayered process described in Keynes’s account of the emergence and then questioning of laissez-faire is a better guide to the likely path of the evolution of this key doctrine of political economy in the coming decades. |
| Keywords: | Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cudawp:250013&r=hpe |
| By: | James Forder |
| Abstract: | Abstract It is widely accepted that the importance of Friedman’s Presidential Address to the American Economic Association lies in its criticism of policy based on the Phillips curve. It is argued that a reading of the text does not support such a view, and this and other considerations suggest that any such aim was far from Friedman’s mind in 1968. His objective was the quite different one of making a case for policy ‘rules’ rather than discretion. |
| Keywords: | Milton Friedman; rules and discretion; expectations; Phillips curve |
| JEL: | B22 B31 E58 |
| Date: | 2016–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:814&r=hpe |
| By: | Kanbur, Ravi |
| Abstract: | All those who know Ghana know about the association of Nobel Laureate W. Arthur Lewis with the country’s economic policy making before independence and in its early years as a free nation. But there is less appreciation in development economics more generally of the central role that Ghana played in Lewis’s thinking as a development economist, and there is less appreciation among Ghanaians of how the Ghana experience left an indelible mark on Lewis in the second half of his career. In this sixtieth year of Ghana’s independence, this paper attempts to set out the deep connections between this giant of development economics and the evolution of Ghanaian Economic Policy. |
| Keywords: | Agricultural and Food Policy, |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cudawp:250028&r=hpe |
| By: | Fernando Rugitsky |
| Abstract: | The aim of this paper is to explore a parallelism between two episodes in the history of economic thought in order to suggest that the interaction between them can contribute to the research on Kaleckian growth and distribution models. First, a brief summary of the theoretical development from Steindl’s stagnationist claims to the debate about demand regimes is offered. Then, a more detailed account is provided of the Latin American debate that began with Furtado’s stagnationist claims and resulted in the formulation of models of social articulation and disarticulation. Finally, an analytical classification of Kaleckian and Latin American growth and distribution models is provided, indicating the way in which sectoral heterogeneity and demand composition can act as a plausible link between growth and distribution. |
| Keywords: | income distribution; demand regimes; sectoral heterogeneity; demand composition; distributive schedule. |
| JEL: | E11 E20 O11 |
| Date: | 2016–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2016wpecon26&r=hpe |
| By: | Geoffrey C. Harcourt (School of Economics, UNSW Business School, UNSW) |
| Keywords: | Keynes, Versailles, King’s, lives of economists and scientists, life philosophy |
| JEL: | B10 B31 A31 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2016-10a&r=hpe |
| By: | Selwyn Cornish; Raghbendra Jha |
| Abstract: | Trevor Swan is commonly considered to be Australia’s most distinguished economist. As part of a visiting professorship at MIT during 1958-59 he spent nine months in India to assist in the formulation of India’s third five year plan and to contribute to the development of India’s premier research institutions. This paper provides an account of his work in New Delhi. Swan’s closest associates were Pitambar Pant from the Indian Planning Commission and Ian Little who was visiting from Oxford. Swan was of the view that India’s economic problems should be clearly understood and the best policy measures to address these should be devised. This varied considerably from the practice of central planning and state control being practiced in India at that time. Swan was unable to influence the direction of economic policy in India but the economy’s subsequent performance would vindicate Swan’s views on how economic development policy should have been conducted. |
| Keywords: | India, Trevor Swan, Ian Little, Pitambar Pant, Five Year Plans, MIT Project, Ford Foundation |
| JEL: | B19 B31 O10 O21 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2016-19&r=hpe |
| By: | Emily Chamlee-Wright (Washington College); Joshua C. Hall (West Virginia University, Department of Economics); Laura E. Grube (Beloit College, Department of Economics) |
| Abstract: | In this paper we describe the Miller Upton Programs, launched by the Department of Economics at Beloit College in 2008. The Miller Upton Programs aim to advance student understanding of the nature and causes of wealth and well-being. After describing core elements of the program, we discuss the ways in which they leverage economic discourse as a means to advance liberal learning. We argue that programs of this kind advance liberal learning by cultivating the skills required to engage the great questions of human flourishing, by fostering the development of a students’ economic imagination, and by enhancing students’ ability to engage in genuine intellectual discovery. So that readers can identify specific elements of the program that may be appropriate to replicate at their home institutions, we provide details on the history and resource commitments associated with various aspects of the program. |
| Keywords: | economic education, pedagogy, liberal education |
| JEL: | A22 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:16-18&r=hpe |
| By: | Benoît Le Maux (CREM-CNRS and Condorcet Center, University of Rennes 1, France); Sarah Necker (University of Freiburg, Walter-Eucken Institute, Deutschland); Yvon Rocaboy (CREM-CNRS and Condorcet Center, University of Rennes 1, France) |
| Abstract: | We develop a theory of the evolution of scientific misbehavior. Our empirical analysis of a survey of scientific misbehavior in economics suggests that researchers’ disutility from cheating varies with the expected fraction of colleagues who cheat. This observation is central to our theory. We develop a one-principal multi-agent framework in which a research institution aims to reward scientific productivity at minimum cost. As the social norm is determined endogenously, performance-related pay may not only increase cheating in the short run but can also make cheat-ing increasingly attractive in the long run. The optimal contract thus depends on the dynamics of scientific norms. The premium on scientific productivity should be higher when the transmission of scientific norms across generations is lower (low marginal peer pressure) or the principal cares little about the future (has a high discount rate). Under certain conditions, a greater probability of detection also increases the optimal productivity premium. |
| Keywords: | Economics of Science, Contract Theory, Scientific Misbehavior, Social Norms |
| JEL: | A11 A13 K42 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:2016-17&r=hpe |
| By: | Yew-Kawng Ng; Richard Lipsey (Simon Fraser University) |
| Abstract: | This paper presents the editor’s introduction and the table of contents for a symposium on Second and Third Best Theory forthcoming in The Pacific Economic Review, 22:2, May 2017. Unusual in such cases, the two editors are the major protagonists in this debate. In the symposium Ng maintains that second-best theory appears to preclude giving theory-based policy advice because full second-best optima cannot be determined in any practical case. Lipsey disagrees and discusses the development of context-specific policies not based on the theory of the optimal allocation of resources. To allow for theory-based policy, Ng offers his theory of third best. The major disagreement over this theory concerns its proposition: first-best rules for third-best worlds under Informational Poverty (not enough is known to determine the desirable direction of change of some the policy variable). Lipsey argues that, if correct, this rule would upset the main result of second-best theory that the sign of the change in the objective function may be either positive or negative when first-best rules are fulfilled piecemeal in second-best worlds. Wo supports Ng’s third best theory and derives additional rules, while Boadway surveys the application of second best theory in several cases from the literature of public economics. |
| Keywords: | Second best, third best, informational poverty, distortions, economic policy |
| JEL: | D6 D60 H0 H10 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp16-16&r=hpe |
| By: | Friedrich, Thomas |
| Abstract: | Three different strategic types of ensembles are compared on basis of their calculated superadditive net profit. The superadditive and peaceful ensemble of two Homo Economicus serves us with the starting value. From there two ensemble types emerge rearranging substrate within the ensemble through exploitation with force and deception of source and/or sink. An increasing transfer of substrate will, after an initial increase of rational superadditivity, finally lead to a dominating amount of irrational subadditivity. They are a conditional and an unconditional violent and deceptive ensemble. A third type, not rearranging substrate within the ensemble, is able to increase superadditivity by exploration and transfer from the outside of the ensemble. Dependent ensembles with a master and independent ensembles are considered. A low (realistic) finding probability for new substrate is assumed in all examples. The unconditional violent and deceptive ensemble is in most of the cases superior according to the maximal possible superadditivity. This is altered after consideration of the investments necessary. Besides the three pure types also mixed types are investigated. Mixed strategic types are constructed assuming a mosaic structure of pure behaviour. The result is the topography of superadditivity or subadditivity. With this topography it becomes possible to assess the maximal investment for force and deception and compare the strategies. Extreme subadditivity can be avoided by a revolution of the transfer direction or by a recreation of the starting conditions. |
| Keywords: | utility function, source, sink, ensemble, supply, demand, violence, deception, framing effect, exploration, exploitation, superadditivity, subadditivity, Homo Economicus |
| JEL: | Z0 |
| Date: | 2016–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75601&r=hpe |
| By: | Laura Valladão Mattos |
| Abstract: | It is argued that J.S.Mill’s position in the debate over the ‘Land Question’ in Ireland can be best understood from the viewpoint of his theory of institutions. He thought that, to be adequate, institutions should promote progress – that is, human improvement, a rise of economic productivity and the increase of social justice – without endangering social order. The prevalent form of land occupation in Ireland – the cottier system – did not fulfil any of these requisites, and was an important obstacle to amelioration. It was at the root of Ireland’s low state of moral and economic development and of the social and political tensions that endangered the social order. Thus, in Mill’s evaluation, it should be eliminated. The alternative of transposing to Ireland the ‘English model’ of capitalist agriculture was, notwithstanding, rejected. This institution could eventually solve the economic problem, but involved the unjust eviction of tenants (aggravating social and political tensions) and would not contribute to the desired regeneration of the Irish character. Given the historical, cultural and political particularities of Ireland, Mill endorsed peasant property as the most suitable form of land appropriation. Its introduction would, at once, improve the character of the people, enhance productivity and increase the degree of social justice of the system. It would also mitigate social and political conflicts that jeopardized social order |
| Keywords: | J.S.MILL; Ireland; land property; institutions; progress social |
| JEL: | B12 |
| Date: | 2016–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2016wpecon22&r=hpe |
| By: | Joy A. Buchanan (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Matthew K. McMahon (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Matthew Simpson (Department of Statistics, University of Missouri - Columbia); Bart J. Wilson (Economic Science Institute, Chapman University) |
| Abstract: | We investigate the degree to which people in a shopping mall express other-regarding behavior in the dictator game. Whereas many studies have attempted to increase the social distance between the dictator and experimenter and between the dictator and dictatee, we attempt to minimize that social distance between random strangers by video recording the decisions with the permission of the dictators to display their image on the Internet. Offers made by dictators are high relative to other experiments and a nontrivial number give the entire experimental windfall away, however a nontrivial number of people keep everything as well. |
| Keywords: | experimental economics, social distance, dictator game |
| JEL: | A13 C70 C93 D63 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1061&r=hpe |
| By: | Partha Dasgupta; Tapan Mitra; Gerhard Sorger |
| Abstract: | We study a socio-ecological model in which a continuum of consumers harvest a common property renewable natural resource. Markov perfect Nash equilibria of the cor- responding non-cooperative game are derived and are compared with collectively optimal harvesting policies. The underlying mechanisms that drive open-access commons in our model are shaped by population size, harvesting costs, and the ecosystem's productivity. If other things equal population is small relative to harvesting costs, unmanaged commons do not face destruction. More strikingly, they are harvested at the collectively optimal rate. Property rights do not matter in that parametric regime because the resource has no social scarcity value. However, if other things equal population is large relative to harvesting costs, open-access renewable natural resources suffer from the tragedy of the commons. Property rights matter there because the resource has a social scarcity price. The pop- ulation size relative to harvesting costs at which the socio-ecological system bifurcates is an increasing function of the ecosystem's productivity. A sudden crash in productivity, population overshoot, or decline in harvesting costs can tip an unmanaged common into ruin. The model provides a way to interpret historical and archaeological ndings on the collapse of those societies that have been studied by scholars. |
| JEL: | D01 C73 Q20 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:1608&r=hpe |
| By: | N. Chesterley; P. Roberti |
| Abstract: | This paper considers electoral behavior and institutional capture when voters choose between a populist and non-populist politician. Populist politicians provide voters with a utility boom followed by a subsequent bust, as in Dornbusch and Edwards (The Macroeconomics of Populism in Latin America, University of Chicago Press, 1991). Non-populists provide a constant level of utility. Once in power, however, politicians of both types are able to seize control of institutions to ensure their re-election. We show that in equilibrium, populist politicians may capture institutions to avoid being replaced during the bust: non-populists do not. Voters rationally elect a populist if voters discount the future sufficiently or if it is too costly for the populist to seize control of institutions. Unfortunately, both types of politician may prefer weakened institutions, either to allow their capture or to discourage the election of the populist. |
| JEL: | D72 D73 D74 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1086&r=hpe |
| By: | Gabriele Camera (Chapman University and University of Basel); Alessandro Gioffre (Goethe University) |
| Abstract: | Studies of cooperation in infinitely repeated matching games focus on homogeneous economies, where full cooperation is efficient and any defection is collectively sanctioned. Here we study heterogeneous economies where occasional defections are part of efficient play, and show how to support those outcomes through contagious punishments. |
| Keywords: | cooperation, repeated games, social dilemmas |
| JEL: | C6 C7 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:16-30&r=hpe |
| By: | Julia Müller (Institute for Organisational Economics, University of Münster); Christiane Schwieren (Alfred-Weber-Institute for Economics, University of Heidelberg); Florian Spitzer (Department of Strategy and Innovation, Vienna University of Economics and Business) |
| Abstract: | Many recent experimental studies have shown that some subjects destroy other subjects’ incomes without receiving any material benefit, and that they even incur costs to do so. In this paper, we study the boundary conditions of this phenomenon, which is referred to as anti-social behavior. We introduce a four-player destruction game, in which we vary the framing and the presence of another activity, running in parallel to the destruction game. We observe a substantial amount of destruction in the baseline condition without the parallel activity, and with a framing in the spirit of previous destruction experiments. Our results indicate that a parallel activity as well as a framing emphasizing joint ownership of the item that can be destroyed reduces destruction almost to zero. We therefore argue that the emergence of anti-social behavior is highly contingent on the contextual environment. |
| Keywords: | anti-social behavior, joy of destruction, experiment, framing, boredom |
| JEL: | A13 C72 C91 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp238&r=hpe |
| By: | Kanbur, Ravi |
| Keywords: | Agricultural and Food Policy, |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cudawp:250024&r=hpe |