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on History and Philosophy of Economics |
| By: | Sebastian Edwards |
| Abstract: | On December 1933, John Maynard Keyes published an open letter to President Roosevelt, where he wrote: “The recent gyrations of the dollar have looked to me more like a gold standard on the booze than the ideal managed currency of my dreams.” In this paper I use high frequency data to investigate whether the gyrations of the dollar were unusually high throughout this period. My results show that although volatility was pronounced, it was not higher than during October 1931- July 1933. I analyze Keynes writings on the international monetary system in an effort to understand what he meant in his letter. I compare Keynes’s “The means to prosperity” with James P. Warburg’s plan for a “modified international standard.” |
| JEL: | B22 B26 B3 E31 E5 F31 N22 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23141&r=hpe |
| By: | Tesfatsion, Leigh |
| Abstract: | Real-world economies are open-ended dynamic systems consisting of heterogeneous interacting participants. Human participants are decision-makers who strategically take into account the past actions and potential future actions of other participants. All participants are forced to be locally constructive, meaning their actions at any given time must be based on their local states; and participant actions at any given time affect future local states. Taken together, these properties imply real-world economies are locally-constructive sequential games. This study discusses a modeling approach, agent-based computational economics (ACE), that permits researchers to study economic systems from this point of view. ACE modeling principles and objectives are first concisely presented. The remainder of the study then highlights challenging issues and edgier explorations that ACE researchers are currently pursuing. |
| Date: | 2017–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201702180800001022&r=hpe |
| By: | Moreno-Okuno, Alejandro T.; Mosiño, Alejandro |
| Abstract: | Games that appear to be independent, involving none of the same players, may be related by emotions of reciprocity between the members of the same groups. In the real world, individuals are members of groups and want to reward or punish those groups whose members have been kind or unkind to members of their own. In this paper we extend Dufwenberg and Kirchsteiger's model of sequential reciprocity (2004) to groups of individuals and define a new "sequential group reciprocity equilibrium" for which we prove its existence. We study the case of two games with two players in each game, where each player belongs to the same group as a player in the other game. We show that when the payoffs of one game are much higher than the payoffs of the other, the outcome of the game with higher payoffs determines the outcome of the other game. We also find that when the payoffs are very asymmetric, the outcome where the sum of the payoffs is maximized is a sequential group reciprocity equilibrium. |
| Keywords: | Fairness, Groups, Psychological Games, Game Theory |
| JEL: | A12 C60 D63 |
| Date: | 2017–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76820&r=hpe |
| By: | Oriol Carbonell-Nicolau (Rutgers University) |
| Abstract: | The notion of communication equilibrium extends Aumann’s [3] correlated equilibrium concept for complete information games to the case of incomplete information. This paper shows that this solution concept has the following property: for the class of incomplete information games with compact metric type and action spaces and payoff functions jointly measurable and continuous in actions, limits of Bayes-Nash equilibria of finite approximations to an infinite game are communication equilibria (and in general not Bayes-Nash equilibria) of the limit game. Another extension of Aumann’s [3] solution concept to the case of incomplete information fails to satisfy this condition. |
| Keywords: | infinite games of incomplete information, Bayes-Nash equilibrium, communication equilibrium, correlated equilibrium, strategic approximation of an infinite game |
| JEL: | C72 |
| Date: | 2017–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:201702&r=hpe |
| By: | Müller, Stephan; von Wangenheim, Georg |
| Abstract: | We study the coevolution of cooperation, preferences and cooperative signals in an environment where individuals engage in a signaling-extended Prisoner's Dilemma. We identify a new type of evolutionary equilibrium -- a transitional equilibrium -- which is constituted and stabilized by the dynamic interaction of multiple Bayesian equilibria. A transitional equilibrium: (1) exists under mild conditions and (2) can stabilize a population that is characterized by the heterogeneity of behavior, preferences, and signaling. We thereby offer an explanation for persistent regularities observed in laboratory and field data on cooperative behavior. Furthermore, this type of equilibria is least demanding with respect to differences in signaling cost between `conditional cooperators' and `opportunists'. Indeed and quite surprisingly, a transitional equilibrium is consistent with `conditional cooperators' bearing higher signaling cost in terms of fitness than `opportunists'. |
| JEL: | C73 D64 D82 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145713&r=hpe |
| By: | Astghik Mavisakalyan (Bankwest Curtin Economics Centre, Curtin University); Clas Weber (University of Oslo) |
| Abstract: | The theory of linguistic relativity - the idea that our language influences our thinking - has a long history in the humanities. Speakers of different languages may systematically think and behave differently. This phenomenon has only recently attracted attention from economists. This paper provides the first comprehensive review of this nascent literature. First we explain the linguistic relativity thesis. Then we summarise the empirical evidence on the relationship between linguistic structures and economic outcomes. We follow up with a discussion of empirical design and identification. The paper concludes by discussing implications for future research and policy. |
| Keywords: | Language, culture, linguistic relativity, economic behaviour |
| JEL: | D83 J24 Z13 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ozl:bcecwp:wp1605&r=hpe |
| By: | Yasuhiro Sakai (Faculty of Economics, Shiga University) |
| Abstract: | This paper aims to discuss the problem of nuclear power generation from the viewpoint of the economics of risk and uncertainty. Although we have experienced the two major nuclear disasters, Chernobyl and Fukushima, in recent times, it is quite unfortunate that risk-economic studies in nuclear power generation have been extremely rare so far. This may show intentional neglect in the academic circle. The purpose of this paper is to duly mend such a regrettable tendency. Before 11 March 2011, there were many people who more or less believed in the myth of absolute safety. The Great East Japan Earthquake, however, has completely changed their concept of risk for nuclear power generation, thus requiring the need to take a new risk-economic approach to nuclear energy. As saying goes, we can learn new lessons in old teachings: we have to reexamine the economics of J.M. Keynes and Frank Knight. There are many possibilities for future research. |
| Keywords: | Risk, uncertainty, nuclear power generation, Keynes, Knight |
| URL: | http://d.repec.org/n?u=RePEc:shg:dpapea:23&r=hpe |
| By: | León Tamayo, Dorian Fernando; Gonzalez, Miller |
| Abstract: | La formulación e implementación de políticas públicas orientadas a la disminución de la pobreza económica y multidimensional debe contener un marco centrado en el desarrollo humano; por consiguiente, el presente artículo se plantea como objetivo examinar la importancia de elaborar políticas públicas dentro del llamado enfoque de capacidades en la versión de Amartya Sen. De igual forma, intenta mostrar la importancia de dicho enfoque en el contexto de la política pública presente en municipios en donde el conflicto social armado ha tenido bastante incidencia. |
| Keywords: | Palabras clave: enfoque de capacidades, desarrollo humano, pobreza multidimensional, Amartya Sen. |
| JEL: | D63 I31 I32 |
| Date: | 2017–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76987&r=hpe |
| By: | Chatelain, Jean-Bernard; Ralf, Kirsten |
| Abstract: | Macroeconomic theories of the 1980s faced accelerated depreciation when not sudden death. By contrast with econometrics and microeconomics and despite massive progress in access to data and the use of statistical softwares, macroeconomic theory appears not to be a cumulative science so far. When attempts are done to settle controversies by "nature" (testing the theories), they are designed to fail due to Gresham's law of selecting theories based on too many parameters, which are weakly or non-identified when testing them. Two examples are provided, one in growth theory and testing convergence, one in business cycles theory and testing inflation persistence. |
| Keywords: | Macroeconomic theory, controversies, identification, economic growth, convergence, inflation persistence. |
| JEL: | B22 B23 B41 C52 E31 O41 O47 |
| Date: | 2017–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76825&r=hpe |
| By: | Botta, Alberto |
| Abstract: | In this paper, we provide a critical analysis of the theory of the expansionary austerity. We take the hotly debated contribution by Carmen Reinhart and Kenneth Rogoff on the supposedly negative relationship between public debt and economic growth (when the debt-to-GDP ratio overcomes the 90 percent threshold) as the starting point of our analysis. We then move to analyze those contributions that more directly point to the possible expansionary outcomes of tough fiscal retrenchments. We eventually criticize the main conclusions of the expansionary austerity theory by presenting a simple short-run theoretical model. We show that fiscal consolidation might have expansionary outcomes only under extreme, very specific and uncertain circumstances. Expansionary austerity would hardly take place in the context of monetarily sovereign economies, or in presence of an accommodative monetary policy like that implemented by the ECB since late 2011, or in economic systems that are poorly integrated to international goods markets. |
| Keywords: | fiscal policy; expansionary austerity theory; post-Keynesian macro models; |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:14446&r=hpe |
| By: | Oriol Carbonell-Nicolau (Rutgers University) |
| Abstract: | We obtain conditions on the primitives of a Bayesian game with infinitely many types and/or strategies that ensure the existence of a perfect Bayes-Nash equilibrium. The main existence results are illustrated in the context of all-pay auctions. |
| Keywords: | infinite game of incomplete information, perfect Bayes-Nash equilibrium, payoff security |
| JEL: | C72 |
| Date: | 2017–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:201703&r=hpe |
| By: | Simon Schopohl (EDEEM - Université Paris 1, Universität Bielefeld and Université Catholique de Louvain) |
| Abstract: | We consider a Sender-Receiver game in which the Sender can choose between sending a cheap-talk message, which is costless, but also not verified and a costly verified message. While the Sender knows the true state of the world, the Receiver does not have this information, but has to choose an action depending on the message he receives. The action then yields to some utility for Sender and Receiver. We only make a few assumptions about the utility functions of both players, so situations may arise where the Sender's preferences are such that she sends a message trying to convince the Receiver about a certain state of the world, which is not the true one. In a finite setting we state conditons for full revelation, i.e. when the Receiver always learns the truth. Furthermore we describe the player's behavior if only partial revelation is possible. For a continuous setting we show that additional conditions have to hold and that these do not hold for “smooth” preferences and utility, e.g. in the classic example of quadratic loss utilities |
| Keywords: | cheap-talk; communication; costly disclosure; full revelation; increasing differences; Sender-Receiver game; verifiable information |
| JEL: | C72 D82 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:17011&r=hpe |