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on History and Philosophy of Economics |
| By: | Sergio Cesaratto |
| Abstract: | Supporters of the Monetary Circuit Theory argue that workers’ or households’ savings may be used to fix firms’ losses and avoid crises. The question is reminiscent of a discussion that took place between Dennis Robertson (DHR) and Keynes on the Treatise (1930) about Keynes’s idea that workers’ savings might cover firms’ losses. In this discussion, DHR denied that savings could correspond to firms’ losses, arguing that savings do not exist independently of investment. Circuitists like Graziani seem to reiterate the Treatise’s mistake of maintaining that part of savings corresponds to firm’s losses and are lent to firms to fix those losses, while neglecting the effects of those losses on output as DHR pointed out in the early 1930s. |
| Keywords: | Monetary circuit, Robertson, Keynes, Graziani, Treatise |
| JEL: | B22 B50 E12 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:732&r=hpe |
| By: | Luca Fiorito; Sebastiano Nerozzi |
| Abstract: | The aim of this paper is to unfold a rich body of archival material that can shed new light on the nature and evolution of interwar Chicago economics. Specifically, this paper is based on a scrutiny of the PhD qualifying exams on Economic Theory at Chicago from 1926 to 1940. The qualifying tests (supplemented by the courses’ programs) show the existence of two important turning points in the shaping of Chicago economic training. The first one is in 1927, when John M. Clark, the undisputed leader of the Chicago Department of Economics during the heyday of institutionalism, moved to Columbia, leaving open ground to the restructuring of the courses according to a different and more analytical approach already represented in the Department by Viner and, in a narrower field, by Paul Douglas. The arrival at Chicago of figures such as Knight, Schultz and Simons definitely shifted the balance toward neoclassical theory. A second turning point occurred in 1933 when the qualifying test in Economic Theory was divided into two major fields: price and distribution theory on the one side; money and business cycle on the other. This innovation reveals the importance acquired by monetary theory in economic training at a time that is commonly associated with the nurturing of what was later named as the “Chicago monetary tradition.” |
| Keywords: | Chicago School; Institutionalism; Knight, Frank H.; Viner, Jacob |
| JEL: | B13 B15 B21 B22 B23 B25 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:733&r=hpe |
| By: | Rezai, Armon; Stagl, Sigrid |
| Abstract: | The Great Recession of the past years has brought macroeconomics back. Many of the recession's phenomena, causes and consequences alike, cannot be understood using solely microeconomic decisionmaking. Over the past decades the economics profession has pursued the implications of rational choices and enshrined them in so-called "micro foundations" as a hallmark of modern economic theory. By focusing on the choices and actions of individual consumers, firms, or the government, however, one can easily miss important determinants of the economic system which only arise at the meso- or the macroeconomic levels where institutions, coordination, and complexity in general are important and sometimes even can take on a life of their own. To lesser extent, ecological economics has fallen prone to similar pitfalls by mostly focusing the unit of investigation on low-level, small-scale subsystems of the economy. There are, of course, notable exceptions including the early contributors Boulding and Georgescu-Roegen and the general interest of ecological economists in the field of (ecological) macroeconomics has been increasing. (authors' abstract) |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus045:4803&r=hpe |
| By: | Sergio Cesaratto |
| Abstract: | The paper reviews the main elements of Modern Classical Theory in view of the analysis of contemporary societies and in particular: the recovery of the Classical and Marxist “surplus approach” as a solid foundation for the analysis of social conflict; a demand-led theory of the level and growth of output based on the rejection of Say’s Law and the recovery of the notion of “external markets” put forward by Rosa Luxembourg and Kalecki, as the framework for the investigation of growth and crises in different historical phases of capitalism; the dismantling of the analytical core of Marginalism and of its laissez-faire policy prescriptions; and finally, the rejection of methodological individualism and of subjectivism in economic analysis and the preservation of the analytical methods of the Classical economists and Marx. In this regard, the paper underlines some differences with other heterodox schools, but also convergence with endogenous money theory and with systemic views of technical change. |
| Keywords: | Classical economists, Sraffa, Kalecki, Keynes, Surplus approach, heterodox economics |
| JEL: | B12 B24 B51 E11 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:735&r=hpe |
| By: | Asheim, Geir (Dept. of Economics, University of Oslo); Voorneveld, Mark (Department of Economics, Stockholm School of Economics,); Weibull, Jörgen W. (Department of Economics, Stockholm School of Economics) |
| Abstract: | We define a concept of epistemic robustness in the context of an epistemic model of a finite normal game where a player type corresponds to a belief over the profiles of opponent strategies and types. A Cartesian product X of pure strategy subsets is epistemically robust if there is a Cartesian product Y of player type subsets with X as the associated set of best reply profiles such that the set Yi contains all player types that believe with sufficient probability that the others are of types in Y-i and play best replies. This robustness concept provides epistemic foundations for set-valued generalizations of strict Nash equilibrium, applicable also to games without strict Nash equilibria. We relate our concept to closedness under rational behavior and thus to strategic stability and to the best reply property and thus to rationalizability. |
| Keywords: | Epistemic game theory; epistemic robustness; rationalizability; closedness under rational behavior; mutual p-belief |
| JEL: | C72 D83 |
| Date: | 2016–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2016_015&r=hpe |
| By: | Lance Taylor; Duncan K Foley; Armon Rezai; Luiza Pires; Ozlem Omer; Ellis Scharfenaker (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | This paper makes three contributions to the existing literature on economic growth: first, we provide a demand-driven alternative to the conventional supply side Solow-Swan growth model. The model’s medium run is built around MarxGoodwin cycles of demand and distribution. Second, we introduce wage income of “capitalist” households. The Samuelson-Modigliani steady state “dual” to Pasinetti’s cannot be stable when capitalists have positive wages. Finally, we speak to the discussion triggered by Piketty on the stability of wealth concentration and its relation to the profitability of capital. Our demand-driven model of the long run satisfies Kaldor’s stylized facts (the gold standard of growth theory) and generates sustained economic growth with the capitalists’ share of wealth stabilizing between zero and one. Complications arising from “excess” capital gains and how well the model fits the data are briefly considered. |
| Keywords: | Demand, Growth, Keynes |
| JEL: | B51 E12 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2016-04&r=hpe |
| By: | Batabyal, Amitrajeet; Beladi, Hamid |
| Abstract: | In this note we analyze a game model of marital infidelity. The husband can either be faithful to or cheat on his wife. The wife can either monitor or not monitor her husband. We first determine the best response correspondences of the two players. Second, we explain why there is no pure-strategy Nash equilibrium in the game under study. Third, we show that there exists a unique mixed-strategy Nash equilibrium in the game. Finally, we demonstrate the nexus between our marital infidelity game and the prominent Matching Pennies game. |
| Keywords: | Cheating, Faithfulness, Monitoring, Mixed-Strategy, Static Game |
| JEL: | C72 D81 J12 |
| Date: | 2016–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75758&r=hpe |
| By: | Gräbner, Claudius |
| Abstract: | Analyzing economic systems from an evolutionary-institutional or a complexity perspective are two complementary approaches to economic inquiry. Three arguments in favor of this hypothesis are discussed: (i) eminent institutional economists have considered the economy as what today could be considered a complex system; (ii) complexity economists lack meta-theoretical foundations which could be provided by institutionalist theory; (iii) institutional economists could benefit from using methods of complexity economics. In this context I argue that scholars considering the economy to be complex should seek to explain it by discovering social mechanisms instead of focusing on prediction. For the discrimination between alternative explanations, scholars should refer to the deepness of an explanation, rather than to Occam’s razor. |
| Keywords: | Evolutionary-Institutional economics, Philosophy of science, Systemism, Agent-Based Computational Economics, Complexity Economics |
| JEL: | B25 B41 B52 |
| Date: | 2016–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75636&r=hpe |
| By: | Glötzl, Florentin; Aigner, Ernest |
| Abstract: | Pluralism has become a central issue not only in the public discourse but also in heterodox economics, as the focus on impact factors and rankings based on citations continues to increase. This marketization of science has been an institutional vehicle for the economic mainstream to promote its ideas. Citations thus have become a central currency in economics as a discipline. At the same time they allow to investigate patterns in the discourse. Analyzing articles published by the two major economics departments and the more interdisciplinary Department for Socioeconomics in Vienna, this paper is novel in applying both bibliometric techniques and citation network analysis on the department level. We find that (1) Articles in heterodox journals strongly reference the economic mainstream, while the mainstream does not cite heterodox journals, (2) Articles written by researchers of the Department of Socioeconomics cite more heterodox journals irrespective of whether they are published in mainstream or heterodox journals, (3) The economics departments display a citation network exhibiting a clear "mainstream core - heterodox periphery" structure, as Dobusch & Kapeller (2012b) suggest the overall discourse in economics to be, while the Department of Socioeconomics could be described as a plural though not pluralistic department with many distinct modules in the network , reflecting various disciplines, topics and schools of thought. (authors' abstract) |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus045:4730&r=hpe |
| By: | Spash, Clive L.; Gattringer, Clemens |
| Abstract: | Human induced climate change poses a series of ethical challenges to the current political economy, although it has often be regarded by economists as only an ethical issue for those concerned about future generations. The central debate in economics has then concerned the rate at which future costs and benefits should be discounted. Indeed the full range of ethical aspects of climate change are rarely even discussed. Despite recent high profile and lengthy academic papers on the topic the ethical remains at best superficial within climate change economics. Recognising the necessary role of ethical judgment poses a problem for economists who conduct exercises in cost-benefit analysis and deductive climate modelling under the presumption of an objectivity that excludes values. Priority is frequently given to orthodox economic methodology, but that this entails a consequentialist utilitarian philosophy is forgotten while the terms of the debate and understanding is simultaneously restricted. We set out to raise the relevance of a broader range of ethical issues including: intergenerational ethics as the basis for the discount rate, interregional distribution of harm, equity and justice issues concerning the allocation of carbon budgets, incommensurability in the context of compensation, and the relationship of climate ethics to economic growth. We argue that the pervasiveness of strong uncertainty in climate science, incommensurability of values and nonutilitarian ethics are inherent features of the climate policy debate. That mainstream economics is ill-equipped to address these issues relegates it to the category of misplaced concreteness and its policy prescriptions are then highly misleading misrepresentations of what constitutes ethical action. (authors' abstract) |
| Keywords: | Climate change; economics; ethics; carbon budgets; discounting; compensation; harm; intergenerational equity; intragenerational distribution; justice; consequentialism; utilitarianism; incommensurability; risk; uncertainty; cost-benefit analysis; growth economy |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus009:5073&r=hpe |
| By: | Lothar Grall (Justus Liebig University Giessen) |
| Abstract: | This paper suggests that feedback effects between technological progress and human longevity lie at the heart of their common emergence in human history. It connects two major research questions. First, the long life span after menopause is a unique but puzzling feature of humans among primates. Second, the shift in human behavior at least 50,000 years ago, which led to an unprecedented pace of technological progress, is still not well understood. The paper develops an evolutionary growth theory that builds on the trade-off between the quantity and the quality of offspring. It suggests that early technological advances gradually increased the importance of intergenerational transfers of knowledge. Eventually, the fertility advantage shifted towards individuals that were characterized by higher parental investment in offspring and a significant post-reproductive life span. Subsequently, the rise in human longevity reinforced the process of development and laid the foundations for sustained technological progress. As a key feature, the theory resolves the debate about a “revolution” in human behavior in an entirely new way. It shows that a gradual emergence of modern behavior is sufficient to trigger a demographic shift that appears as a “behavioral revolution” in the archeological record. |
| Keywords: | Behavioral Revolution, Economic Growth, Human Longevity, Natural Selection, Somatic Investment, Technological Progress. |
| JEL: | J13 N30 O10 O30 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201645&r=hpe |
| By: | Stefano Vannucci |
| Abstract: | An evolutionary game is a game endowed with a population of agents for each player role, a probability matching space and - possibly - an explicit evolutionary dynamics, on a state space that is defi?ned by means of some parameters of the game. Evolutionary games are an essential tool in modeling several issues related to the evolution of cooperation. In particular, by varying appropriately the underlying basic game and its dynamics, evolutionary games can be deployed to provide a neat representation of distinct versions of the ?evolution of cooperation?- problem, including the evolution of altruism, the evolution of distribution conventions, and the evolution of common-interest coordination. It is argued that, according to a plausible formulation of ?'historical materialism'? , the latter essentially amounts to the thesis that in games with common interest the evolution of the common interest equilibrium is typically to be expected even when it is risk-dominated. |
| JEL: | C70 C73 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:738&r=hpe |
| By: | Guha, Brishti |
| Abstract: | This is the first paper to incorporate malice into the Rubinstein alternating offers bargaining game. Initially, I examine outcomes with one-sided malice, allowing one of the bargaining players to be malicious in the sense that he obtains a positive payoff in every period in which the other player does not obtain any piece of the pie. This “malice payoff” is independent of whether the malicious player himself obtains the pie or not. I identify a unique SPNE of the bargaining game, and find that malice confers bargaining advantage; if the respondent is malicious, this can in some cases completely erode and even reverse first mover advantage. I then examine two-sided malice. I find that the proposer’s share when both players are malicious may either increase or decrease relative to the traditional Rubinstein shares. Even with two-sided malice, the proposer may end up with a lower share than the respondent. The results remain qualitatively similar under an alternative “continuous” formulation of malice. I contrast them with the case of envious preferences. |
| Keywords: | Malice, Rubinstein alternating offers game, disagreement. |
| JEL: | C7 C72 |
| Date: | 2016–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75679&r=hpe |
| By: | Palley, Thomas I. |
| Abstract: | This paper explores lock-in and lock-out via economic policy. It argues policy decisions may near-irrevocably change the economy's structure, thereby changing its performance. That causes changed economic outcomes concerning distribution of wealth, income and power, which in turn induces locked-in changes in political outcomes. That is a different way of thinking about policy compared to conventional macroeconomic stabilization theory. The latter treats policy as a dial which is dialed up or down, depending on the economy's state. Lock-in policy is illustrated by the euro, globalization, and the neoliberal policy experiment. |
| Keywords: | economic policy,lock-in,hysteresis,globalization,euro,neoliberalism |
| JEL: | D7 E6 F5 H3 L5 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201650&r=hpe |
| By: | Tobias Regner (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | We analyze reciprocal behavior when moral wiggle room exists. Dana et al. (2007) show that giving in a dictator game is only partly due to distributional preferences as the giving rate drops when situational excuses for selfish behavior are provided. Our binary trust game closely follows their design. Only a preceding stage (safe outside option vs. enter the game) is added in order to introduce reciprocity. We find significantly higher rates of selfish choices in our treatments that feature moral wiggle room manipulations (between 37.5% and 45%) in comparison to the baseline (6.25%). It seems that reciprocal behavior is not only due to people liking to reciprocate but also because they feel obliged to do so. |
| Keywords: | social preferences, pro-social behavior, experiments, reciprocity, moral wiggle room, self-image concerns, trust game |
| JEL: | C72 C91 D03 D80 |
| Date: | 2017–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2016-024&r=hpe |
| By: | Jonathan de Quidt; Johannes Haushofer |
| Abstract: | Major depressive disorder (MDD) is one of the most prevalent mental illnesses worldwide. Existing evidence suggests that it has both economic causes and consequences, such as unemployment. However, depression has not received significant attention in the economics literature. In this paper, we present a simple model which predicts the core symptoms of depression from economic primitives, i.e. beliefs. Specifically, we show that when exogenous shocks cause an agent to have pessimistic beliefs about the returns to her effort, this agent will exhibit depressive symptoms such undereating or overeating, insomnia or hypersomnia, and a decrease in labor supply. When these effects are strong enough, they can generate a poverty trap. We present descriptive evidence that illustrates the predicted relationships. |
| JEL: | D03 I1 I15 I3 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22973&r=hpe |
| By: | Hamermesh, Daniel S. (Royal Holloway, University of London) |
| Abstract: | Examining the most heavily-cited publications in labor economics from the early 1990s, I show that few of over 3000 articles citing them directly replicates them. They are replicated more frequently using data from other time periods and economies, so that the validity of their central ideas has typically been verified. This pattern of scholarship suggests, beyond the currently required depositing of data and code upon publication, that there is little need for formal mechanisms for replication. The market for scholarship already produces replications of non-laboratory applied research. |
| Keywords: | reliability of research, scientific method, citation analysis |
| JEL: | B21 J01 B41 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10403&r=hpe |
| By: | Shino Takayama (School of Economics, The University of Queensland); Yuki Tamura (Department of Economics, University of Rochester); Terence Yeo (School of Economics, The University of Queensland) |
| Abstract: | We study the existence problem of Nash equilibrium as well as party polarization in an electoral competition model. In our model, political parties also value holding office (office rent) in addition to maximizing their party members’ utility. A class of models with an uncertainty about the median voter position has been increasingly important and Drouvelis, Saporiti and Vriend (2014) present an experimental study to support a model with office rent. But the inclusion of office rent renders the payoff of each party discontinuous. This makes it difficult to apply a usual fixed point argument to prove the existence of Nash equilibrium. By using a recently developed concept, C-security in McLennan, Monteiro and Tourky (2011), we provide conditions under which a pure strategy Nash equilibrium (PSE) or a mixed strategy Nash equilibrium (MSE) exists within a fairly general setting, and further the analysis by presenting conditions under which various types of policy choices, including polarization, arise in equilibrium. |
| Keywords: | Noncooperative games, electoral competition, existence of equilibrium |
| Date: | 2016–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:575&r=hpe |
| By: | Elena B. Starovoytenko (National Research University Higher School of Economics); Angela A. Derbeneva (National Research University Higher School of Economics) |
| Abstract: | This paper develops a new approach to study one’s relationships with others, focusing on the conditions and the effects of the dialogical nature of a person. Theoretical modelling, hermeneutics, qualitative and quantitative methods are applied. A solution for detecting the conditions of self-development and social positioning of a person, which are rooted in dialogical I-Other relationships, is suggested. The originality of the paper is found in describing the relation to the other as the I-Other relationship; in the elaborated model that highlights how different dimensions of I-Other relationships (between I and Other, I-in-Other, Other-in-I, I-in-Myself) leads to truly a dialogical mode of being; in revealing the potentials of the Conversation Partner in dialogical I-Other relationships (subjective interrelations and the significance of Conversation Partners, their activity, the fullness of the reflection of significant Conversation Partners); in the description of different “hypostases” of Conversation Partners (real, ideal, imagined, secret, I as Myself) by means of hermeneutics; in the “My Conversation Partner” method; and in the empirical study of existential and social resources of Conversation Partners. The theoretical background of the study is formed by the works of M. Bakhtin, M. Buber, M. Heidegger, J.-P. Sartre, E. Levinas, and by the works of modern psychologists such as G. M. Kuchinsky, A. V. Rossohin, E. B. Starovoytenko, C. T. Brown, P.W.Keller, H. Hermans, F. Rivetti Âàrbo. The results show the potentials of social adaptivity, affiliation, dominating, positive solitude, joy of solitude, freedom, self-transcendence, existential fulfilment are associated with the richness of one's Conversation Partners. A real Conversation Partner is associated with a greater affiliation resource, a secret one with a greater solitude resource, an ideal one with a higher potential to constructively dominate the interaction. |
| Keywords: | personality, I-Other relationship, Conversation Partner, dialogue, reflection, dimensions, social resources, existential resources, hermeneutics, model. |
| JEL: | Z |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:69psy2016&r=hpe |
| By: | Hanappi, Hardy; Scholz-Waeckerle, Manuel |
| Abstract: | In this paper we present the major theoretical and methodological pillars of evolutionary political economy. We proceed in four steps. Aesthetics: In chapter 1 the immediate appeal of evolutionary political economy as a specific scientific activity is described. Content: Chapter 2 explores the object of investigation of evolutionary political economy. Power: The third chapter develops the interplay between politics and economics. Methods: Chapter 4 focusses on the evolution of methods necessary for evolutionary political economy. The conclusion positions the field of evolutionary political economy – as we proposed to establish it in this paper - within the wider area of scientific activity. In particular, demarcation lines towards some fashionable economic schools (institutionalism, behavioural economics, post-Keynesianism, etc.) are indicated. |
| Keywords: | Evolutionary Theory, Political Economy, Methodology of Social Sciences |
| JEL: | B00 B52 C63 |
| Date: | 2015–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75447&r=hpe |
| By: | Mikhail Pogorelov (National Research University Higher School of Economics) |
| Abstract: | The article examines the role of degeneration theory in Russian medical and public discourses at the turn of the 20th century. Drawing on a wide range of historiography and primary sources, including archival records and medical writings, the article aims to outline different contexts of the concept’s usages: from rhetorical idioms to “scientific”, clinical and instrumental applications. Then, it seeks how psychiatrists defined the category of “socially dangerous” and tried to modify the existed institutional and legal framework. This focus could explain degeneration theory influence on social policy and the late imperial institutional system. |
| Keywords: | deviant, socially dangerous, psychiatry, degeneration theory, Russia |
| JEL: | Z |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:139/hum/2016&r=hpe |