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on History and Philosophy of Economics |
| By: | Balzano, Maria Silvia; Vecchione, Gaetano; Zamagni, Vera |
| Abstract: | In the decades around the turn of the eighteenth century, Naples was capital of the Kingdom of the Two Sicilies and Europe’s third most populous city. From the early decades of the eighteenth to the end of the nineteenth century, the city spawned a school of intellectuals that, though predominantly juridical in cast, nevertheless displayed a surprisingly substantial openness to a new approach to the social sciences, which had developed above all in France, heavily influenced by the natural sciences and the experimental method. In harmony with Enlightenment thought, Gaetano Filangieri was the precursor, two centuries back, of the principles of indissoluble interaction between formal and informal institutions and economic development, between governance and social feedback, that are pillars of today’s school of institutional economics. His writings anticipated, in a number of respects, conceptual approaches adopted by later scholars. The present paper offers an institutional focus on his work, referring above all to Douglass North and his treatment of the role of the Glorious Revolution. |
| Keywords: | Gaetano Filangieri; Kingdom of the Two Sicilies; Institutional economics |
| JEL: | B2 B25 B31 |
| Date: | 2018–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84538&r=hpe |
| By: | Alberto Martin; Jaume Ventura |
| Abstract: | This paper provides a guide to macroeconomic applications of the theory of rational bubbles. It shows that rational bubbles can be easily incorporated into standard macroeconomic models, and illustrates how they can be used to account for important macroeconomic phenomena. It also discusses the welfare implications of rational bubbles and the role of policy in managing them. Finally, it provides a detailed review of the literature. |
| JEL: | E32 E44 O40 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24234&r=hpe |
| By: | Schilirò, Daniele |
| Abstract: | This paper examines the growth theory of Robert Solow , which has been a point of reference of economic growth since the 1950s. First, the article analyzes the path-breaking model of growth contained in Solow’s article “A Contribution to the Theory of Economic Growth” published in The Quarterly Journal of Economics (1956). Second, it looks at the contribution of Solow to growth accounting and to the new method of studying capital formation in economic growth through the vintage approach. Therefore, the work analyzes the article “Technical Change and the Aggregate Production Function” published in The Review of Economics and Statistics (1957). In the latter publication, Solow, through the aggregate production function, tries to measure growth and provide an explanation of the nature of technical progress. The article also examines Solow’s 1960 essay “Investment and Technical Progress” based on the hypothesis of embodied technological progress and the vintage approach. |
| Keywords: | Aggregate Production Function; Capital Accumulation; Solow’s Models of Growth; Technological Change |
| JEL: | B22 E10 E23 O10 O33 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84531&r=hpe |
| By: | Bayrak, Oben K. (CERE - the Center for Environmental and Resource Economics) |
| Abstract: | The idea of preference imprecision challenges an underlying assumption in economics: individuals make choices between options confidently and they can articulate their subjective valuations for goods in terms of single precise amounts. In this paper, I review different strands of literature related to preference imprecision. Besides distilling conclusions from the existing literature, I also initiate a discussion on modelling the imprecision from a deterministic perspective by introducing two new frameworks. |
| Keywords: | preference imprecision; stochastic models; stochastic specifications; incommensurability; anomalies; valuation gap; preference imprecision; strength of preference; SoP; economic preferences; interval valuations |
| JEL: | D80 D81 |
| Date: | 2018–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2018_002&r=hpe |
| By: | Gauti B. Eggertsson; Jacob A. Robbins; Ella Getz Wold |
| Abstract: | The macroeconomic data of the last thirty years has overturned at least two of Kaldor’s famous stylized growth facts: constant interest rates, and a constant labor share. At the same time, the research of Piketty and others has introduced several new and surprising facts: an increase in the financial wealth-to-output ratio in the US, an increase in measured Tobin’s Q, and a divergence between the marginal and the average return on capital. In this paper, we argue that these trends can be explained by an increase in market power and pure profits in the US economy, i.e., the emergence of a non-zero-rent economy, along with forces that have led to a persistent long term decline in real interest rates. We make three parsimonious modifications to the standard neoclassical model to explain these trends. Using recent estimates of the increase in markups and the decrease in real interest rates, we show that our model can quantitatively match these new stylized macroeconomic facts. |
| JEL: | E3 E5 E6 O4 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24287&r=hpe |
| By: | Bryson, Alex (University College London); MacKerron, George (University of Sussex) |
| Abstract: | This paper is the first to exploit high-frequency data to measure the impact of terrorist-related incidents (TRIs) on individuals' momentary happiness and anxiety. We show the impact of TRIs varies with the nature of the incident, the individual's physical proximity to it, and the time that has elapsed since the incident. TRIs have a substantial effect on individuals' momentary happiness and anxiety levels, but the effect is short-lived and is largely confined to incidents that lead to the death of victims and incidents within a twenty kilometre radius. |
| Keywords: | happiness, anxiety, wellbeing, conflict, bombings, killings, shootings, terrorism, Northern Ireland |
| JEL: | I31 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11273&r=hpe |
| By: | Edward Nelson |
| Abstract: | This paper analyzes Milton Friedman's (1968) article "The Role of Monetary Policy," via a discussion of seven fallacies concerning the article. These fallacies are: (1) "The Role of Monetary Policy" was Friedman’s first public statement of the natural rate hypothesis. (2) The Friedman-Phelps Phillips curve was already presented in Samuelson and Solow's (1960) analysis. (3) Friedman's specification of the Phillips curve was based on perfect competition and no nominal rigidities. (4) Friedman’s (1968) account of monetary policy in the Great Depression contradicted the Monetary History's version. (5) Friedman (1968) stated that a monetary expansion will keep the unemployment rate and the real interest rate below their natural rates for two decades. (6) The zero lower bound on nominal interest rates invalidates the natural rate hypothesis. (7) Friedman's (1968) treatment of an interest-rate peg was refuted by the rational expectations revolution. The discussion lays out the reasons why each of these seven items is a fallacy and infers key aspects of the framework underlying Friedman’s (1968) analysis. |
| Keywords: | Fisher effect ; Milton Friedman ; Phillips curve ; Liquidity effect ; Natural rate hypothesis ; Price stickiness ; Zero lower bound |
| JEL: | E31 E43 E52 |
| Date: | 2018–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2018-13&r=hpe |
| By: | Lennard, Jason (Department of Economic History, Lund University) |
| Abstract: | This paper investigates the impact of economic policy uncertainty on the macroeconomy of interwar Britain. A new index of economic policy uncertainty constructed from contemporary newspapers indicates that this was a period of great anxiety. Time series evidence suggests that this uncertainty reduced output, raised unemployment and contributed to macroeconomic volatility. |
| Keywords: | business cycles; interwar Britain; local projections; narrative identification; uncertainty |
| JEL: | E32 E60 N14 N44 |
| Date: | 2018–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0170&r=hpe |