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on History and Philosophy of Economics |
| By: | Selva, Simone |
| Abstract: | This contribution offers a comparison between the economic crises of the late-1920s and the first energy crisis of the 1970s through an inquiry into the changing balance between the transnational supply of capital and domestic aggregate demand for fixed capital formation and consumer goods. Its aim is to offer a new interpretation of the concept of international economic interdependence. It starts by outlining the early definition of interdependence offered in the international political economy literature and within the American policymaking elites from World War II to the 1960s. Then, it provides a reappraisal of the New Economic History School's approach to the subject. Thereafter, it investigates the two historical watersheds to cast light both on the different role of Federal Reserve and the international economic institutions to manage the ratio of liquidity supply to aggregate demand, and on the importance of transnational capital flows and gold. |
| Keywords: | economic interdependence,financial crises,US foreign economic relations,supply side,aggregate demand,Federal Reserve,Great Slump,energy crises,Volcker revolution,cliometric revolution |
| JEL: | N22 N12 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eabhps:1701&r=hpe |
| By: | Dilger, Alexander; Müller, Julia; Müller, Michael |
| Abstract: | Trust is an important driver of economic transactions, but how do people decide whom to trust? We conduct an experiment to investigate whether people are able to predict trustworthiness by judging the face of a stranger. The behavior of the second player in the Trust Game is used as a measure of trustworthiness. Other subjects assess the trustworthiness of the second players of the Trust Game in the second stage using standardized photos of their faces. We find no significant interrelation in our statistical estimations between trustworthiness ratings and the behavior of the examined players. Surprisingly, players that were rated as more attractive sent back significantly less in the Trust Game. |
| JEL: | C72 C91 D03 D81 J71 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:umiodp:22017&r=hpe |
| By: | Dario Debowicz; Alejandro Saporiti; Yizhi Wang |
| Abstract: | We study the effect of power sharing over income redistribution among different socio-economic groups in a model of redistributive politics with fairness concern. We prove that a unique pure-strategy equilibrium exists under fairly general conditions; and we show that equilibrium transfers depend on the interplay of four main factors: (i) the gap between the population and the group average pre-tax income; (ii) the relative ideological neutrality of the poor, (iii) parties’ and voters’ concern with income inequality, and (iv) the proportionality of the electoral rule. A number of comparative statics predictions emerge from our characterization. Among them, our analysis shows that the net transfers to the middle class and the rich (resp., the poor) increase (resp., decrease) with power sharing disproportionality. Further, we prove that the Gini coefficient associated with the distribution of disposable incomes also rises with the disproportionality of the power sharing rule, which amount to say that income inequality rises as policymaking power gets more concentrated in the majority winning party. We confront these predictions to the data, using an unbalanced panel of developed and developing democracies. The empirical evidence strongly supports both, the positive effect of the income gap over the group transfers, and the relationship between the Gini index (and respectively, the group transfers) and power sharing disproportionality. |
| Keywords: | Income Redistribution, Targeted Spending, Swing Voter, Electoral Rule, Power Sharing, Fairness, Income Inequality |
| JEL: | C72 D72 D78 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:681&r=hpe |
| By: | Yushan Hu (Boston College); Ben Li (Boston College) |
| Abstract: | The arrival of the internet age forces academic journals to adjust their output margins: journal length, article length, and number of published articles. Using data from 41 major economics journals spanning 21 years (1994-2014), we find that both journals and articles are getting longer, but the page share of an individual article within its journal is shrinking. This pattern is consistent with a monopolistic competition model that features within-firm (journal) specialization. As predicted by the model, the share of an individual article shrinks less in general-interest journals and better ranked journals, where expertise is less substitutable across topics. In this discipline that emphasizes the benefits of specialization, the expertise underpinning its publications is indeed divided in a specialized fashion. |
| Keywords: | Division of labor, history of economics, academic publishing |
| JEL: | A11 D43 |
| Date: | 2017–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:924&r=hpe |
| By: | Armin Falk (Universität Bonn) |
| Abstract: | Numerous signaling models in economics assume image concerns. These take two forms, as relating either to social image or self-image. While empirical work has identified the behavioral importance of the former, little is known about the role of self-image concerns. We exogenously vary self-image concerns in manipulating self-directed attention and study the impact on moral behavior. The choice context in the experiment is whether subjects inflict a painful electric shock on another subject to receive a monetary payment. Three between-subjects conditions are studied. In the main treatment, subjects see their own face on the decision screen in a real-time video feed. In the two control conditions, subjects see either no video at all or a neutral video. We find that the exogenous increase in self-image concerns significantly reduces the fraction of subjects inflicting pain. |
| Keywords: | self-image, moral behavior |
| JEL: | D64 C91 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-019&r=hpe |
| By: | Kevin Primicerio; Damien Challet; Stanislao Gualdi |
| Abstract: | The average portfolio structure of institutional investors is shown to have properties which account for transaction costs in an optimal way. This implies that financial institutions unknowingly display collective rationality, or Wisdom of the Crowd. Individual deviations from the rational benchmark are ample, which illustrates that system-wide rationality does not need nearly rational individuals. Finally we discuss the importance of accounting for constraints when assessing the presence of Wisdom of the Crowd. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1703.01989&r=hpe |
| By: | Hiroshi Toyoizumi |
| Abstract: | A combination of a priority queueing model and mean field theory shows the emergence of traders' swarm behavior, even when each has a subjective prediction of the market driven by a limit order book. Using a nonlinear Markov model, we analyze the dynamics of traders who select a favorable order price taking into account the waiting cost incurred by others. We find swarm behavior emerges because of the delay in trader reactions to the market, and the direction of the swarm is decided by the current market position and the intensity of zero-intelligent random behavior, rather than subjective trader predictions. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1703.01291&r=hpe |
| By: | Conrad, Daren |
| Abstract: | This paper attempts to reconcile the mismatch between theoretical models and empirical results in addressing the issue of education and economic growth. Development theorists have made numerous attempts to explain the contribution of education to economic growth. Over the years, numerous endogenous growth models have emerged to incorporate human capital and they have been subject to rigorous econometric techniques. However, these models have yielded inconclusive results. This paper begins by looking at the history of the development of endogenous growth theories and the various econometric specifications which were estimated. This paper also concludes by identifying the main themes that have emerged in the academic debate on education’s role in economic growth. |
| Keywords: | Education, Growth, Human Capital |
| JEL: | O12 O15 |
| Date: | 2017–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77365&r=hpe |
| By: | Gräbner, Claudius; Kapeller, Jakop |
| Abstract: | This paper focuses on the complementarity between original institutional economics, Mario Bunge’s framework of systemism, and the formal tools developed by complexity economists, especially in the context of agent-based modeling. Thereby, we assert that original institutional economics might profit from exploiting this complementarity. |
| Keywords: | Aggregation, Original Institutionalism, Systemism, Agent-Based Computational Economics, Complexity |
| JEL: | B41 B52 C63 |
| Date: | 2015–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77334&r=hpe |
| By: | Reiter, Michael (Institute for Advanced Studies, Vienna); Sveen, Tommy (BI Norwegian Business School); Weinke, Lutz (Humboldt Universitaet zu Berlin) |
| Abstract: | Once New Keynesian (NK) theory (see, e.g., Woodford 2003) is combined with a standard model of investment (see, e.g., Thomas 2002), the resulting framework loses its ability to generate a realistic monetary transmission mechanism. This is the puzzle uncovered in Reiter et al. (2013). The simple economic reason behind it is the unrealistically large interest rate elasticity of investment, as implied by standard investment theory. In order to address this puzzle we develop a NK model featuring fully flexible investment combined with a financial friction in the spirit of Carlstrom and Fuerst (1997). This model is used to isolate the quantitative importance of the financial friction for the monetary transmission mechanism. |
| Keywords: | Financial Frictions, Sticky Prices |
| JEL: | E22 E31 E32 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:328&r=hpe |
| By: | Luis Bértola (Programa de Historia Económica y Social, Facultad de Ciencias Sociales, Universidad de la República) |
| Abstract: | This working paper discusses Piketty´s already famous book. It remarks some of the strong sides of the book, before critically discussing some aspects. It is argued that Piketty could have benefitted by using other theories of capital, different than the neoclassical one adopted. The note also places Piketty´s limited contribution, as seen in a more comprehensive context, in which international relations and reversal causality between growth and distribution are considered. The notes ends by pointing to the fact that Piketty presents modern development´s main stylized fact in a wrong way, because he is too narrowly focused on the developed regions |
| Keywords: | Desigualdad, periferia, capital |
| JEL: | N01 N36 B25 F63 O54 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ude:doctra:47&r=hpe |
| By: | Graciela Laura Kaminsky (George Washington University) |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2016-26&r=hpe |