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on History and Philosophy of Economics |
| By: | José M. Gaspar (Católica Porto Business School, Universidade Católica Portuguesa and CEF.UP) |
| Abstract: | This work consists of a short biographical survey on the academic life and work of the American economist Paul Robin Krugman. It seeks to shed light on his mains contributions to economic theory, mainly those due to which he was awarded with the Nobel Prize in Economics in 2008. His legacy in academia can be assessed through the recognition of his work in the identification of international trade patterns and the explanation on why spatial imbalances in the distribution of economic activities arise in an increasingly globalized economy. Through these contributions to trade theory and economic geography, Krugman is often credited as being one of the pioneering researchers in the New Trade Theory and the founding father of the New Economic Geography. |
| Keywords: | paul krugman; new trade theory; new economic geography |
| JEL: | R10 R12 R23 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:600&r=hpe |
| By: | Alice Hsiaw (Brandeis University); Ing-Haw Cheng (Brandeis University) |
| Abstract: | Disagreement about the state of the world and expert credibility often go together in areas such as economics, climate change, and medicine. We argue this occurs because individuals make a mistake we call pre-screening when determining how much weight give an expert's signals. A pre-screener mistakes credibility as a primitive of the model and uses the signals to learn about credibility before forming posterior beliefs. Pre-screening predicts that disagreement about credibility is correlated with disagreement about the state. Furthermore: 1) Differing first impressions about credibility create persistent disagreement about the state; 2) Encountering experts in different order generates disagreement; and 3) Confirmation bias, overconfidence, and their opposites endogenously arise. These effects arise even when individuals share common priors, information, and learning errors, providing a theory of the origins of disagreement. |
| Keywords: | disagreement, polarization, learning, expectations, experts |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:brd:wpaper:110r3&r=hpe |
| By: | Fe, Eduardo (University of Strathclyde); Gill, David (Purdue University) |
| Abstract: | In this paper we investigate how observable cognitive skills influence the development of strategic sophistication. To answer this question, we study experimentally how psychometric measures of theory-of-mind and cognitive ability (or 'fluid intelligence') work together with age to determine the strategic ability and level-k behavior of children in a variety of incentivized strategic interactions. We find that better theory-of-mind and cognitive ability predict strategic sophistication in competitive games. Furthermore, age and cognitive ability act in tandem as complements, while age and theory-of-mind operate independently. Older children respond to information about the cognitive ability of their opponent, which provides support for the emergence of a sophisticated strategic theory-of-mind. Finally, theory-of-mind and age strongly predict whether children respond to intentions in a gift-exchange game, while cognitive ability has no influence, suggesting that different psychometric measures of cognitive skill correspond to different cognitive processes in strategic situations that involve the understanding of intentions. |
| Keywords: | cognitive skills, theory-of-mind, cognitive ability, fluid intelligence, strategic sophistication, age, children, experiment, level-k, bounded rationality, non-equilibrium thinking, intentions, gift-exchange game, competitive game, strategic game, strategic interaction |
| JEL: | C91 D91 J24 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11326&r=hpe |
| By: | Thomas I. Palley |
| Abstract: | This paper argues neoliberalism is engaged in a war against the welfare state. At issue are competing views regarding the size of the welfare state and how it should be organized. In waging this war, neoliberalism seeks to politically discredit the traditional welfare state and change the economic structure so that the latter becomes unviable. The paper presents a new theoretical framework that distinguishes between modes of production and financing of the welfare estate. Neoliberalism's war rests on ideologically grounded criticisms drawn from mainstream economics; implementation of policies that undermine social solidarity toward the welfare state; exploiting pressures fostered by neoliberal globalization; and misrepresentations about affordability. The welfare state was critical in saving capitalism from itself after World War II. It is a way of embedding the market system so as to produce socially acceptable outcomes that are politically stable. Neoliberalism's war promises a body blow against shared prosperity. More ominously, it may so dis-embed the market system as to recreate conditions Polyani (1944) blamed for the rise of fascism in the 1930s. |
| Keywords: | Welfare state, neoliberalism, mode of production, mode of financing |
| JEL: | H1 H10 H50 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:imk:fmmpap:16-2018&r=hpe |
| By: | Curtis Jr, James |
| Abstract: | In this paper, James Edward Curtis, Jr. (2017) compiles essays on economic history, labor economics and laws & economics to address economic issues. James Edward Curtis, Jr. (2017) considers economic theory, summary empirical analyses, and government & social construct to challenge our comfort levels with the current status of unequal economic indicators and public policy. |
| Keywords: | economic history, labor economics, laws & economics |
| JEL: | J3 K11 N30 |
| Date: | 2017–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84445&r=hpe |
| By: | Sun Youn Lee; Fumio Ohtake |
| Abstract: | Extant research has found that an individual’s happiness is relative with respect to income, suggesting that it rises with own income and falls as the income of a reference group increases. Some recent studies emphasize that the effect of relative income is mediated by the extent to which people compare themselves with others (hereinafter, “relative consciousness”). Using the survey data of representative sample of Japan and the U.S., this paper extends the existing literature by providing a statistical evidence that underlines the importance of the intensity of relative consciousness in association with the perception of reference-group income in determining an individual’s happiness and his/her decision in line with the maximization of the utility. First, we find people who are highly conscious of others’ living standards are unhappier in Japan but happier in the U.S. This opposite effect between the two countries is also found to exist when the same estimation is conducted with panel data. Second, the positive relationship between relative consciousness and happiness found in the U.S. results from the perception of reference-group income: highly conscious people compare downward in the U.S. Lastly, we further examine the extent to which the integrated effect of relative consciousness and reference-group income is related to an individual’s decision that could affect the degree of happiness. We discuss how our results can drive a wedge between choice behavior and happiness maximization and thus between happiness and decision utility. |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1022&r=hpe |
| By: | Jean-Sébastien Lenfant (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille, Sciences et Technologies - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Probabilistic models of choice (between sure prospects) have become a standard modeling practice since the 1980s, notably through the widespread use of the Logit Multinomial Model pioneered by McFadden (1974). However, the idea to model consumer’s behavior as a probabilistic behavior, hence accounting for some kind of behavioral instability in the pure theory of rational choice, dates back to the 1930s and led to significant investigations in the 1950s. It is the purpose of this article to confront three attempts by economists at developing models of individual choice that go beyond standard ordinalist utility theory through introducing principles of probabilistic behavior. We discuss first Georgescu-Roegen’s neglected contributions to this subject, though he pioneered the definition of probabilistic preference in 1936 and came back on the subject intensively in the 1950s. We then present Marschak’s (and his co-authors) attempts at axiomatizing a probabilistic model of choice in the same period. The third contribution studied is that of Quandt, who provides a more operational style of modeling. This set of contributions is discussed against a general background of transformations of the theory of rational behavior and of the methods proper to it. |
| Keywords: | consumer theory, indifference. , threshold in choice, intransitivity,probabilistic choice theory, Georgescu-Roegen, Marschak, Quandt, measurement of utility, experimental psychology |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01714635&r=hpe |
| By: | Leiashvily, Paata |
| Abstract: | After the crisis of 2018-2010, which led to the complete discrediting of neoclassical theory, the demand for new scientific ideas and an alternative vision of the most fundamental economic problems has sharply increased in economic science. At the same time, the discrediting of the neoclassical theory led to a critical attitude to the very idea of a general economic equilibrium, which is the central idea of neoclassical paradigm. The emphasis is increasingly shifting to the creation of disequilibrium models of economy. This book argues that this approach is incorrect. The wrong is not the very idea of equilibrium, but its neoclassical understanding and its concepts and equilibrium models, which are caused by false methodologies of neoclassicists. Without a preliminary dialectic analysis of economic categories and the operationally closed model of commodity-money flows of a market economy created on its basis, it is impossible to find out feedbacks that ensure the self-regulation of the economic system. The “Symmetrical model” of general economic equilibrium, which shows how economic forces arise, where they are directed and how interact with each other, which provide the homeostasis of a decentralized economic system, is proposed. This model shows the attractor of a real disequilibrium economy. It is shown that the evolution of market economy, which due to the immanent logic of intrasystem processes generates extreme inequality in income distribution, leads to a disruption in the harmony and symmetry of counter flows of commodity and money, thus destroying the system of positive and negative feedbacks that provide the homeostasis of economic system. This book is a collection of articles. Since each of them is a complete whole, the reader can get acquainted with the articles in any sequence, but after reading all of the articles, he will get a new non-standard understanding of functioning of a market economy. Although each article gives a complete analysis of a specific topic, nevertheless, all of them are arranged in such a sequence that they serve as different stages in the development of a single original concept, beginning with a methodology and ending with a mathematical model of a general economic equilibrium. |
| Keywords: | economics, dialectics, market economy, cost, utility, economic equilibrium, mathematical model |
| JEL: | A10 A13 B40 D50 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84563&r=hpe |
| By: | Marcello Basili; Carlo Zappia |
| Abstract: | This paper presents an intuitive way to represent Keynes’s notion of long-term expectations and its implications for decision-making, using the so-called e-contamination approach. Further to a suggestion by Ellsberg, a coherent Keynesian expectational function for decisions under uncertainty is derived. The paper draws on the similarities between the analyses of Keynes and Ellsberg and contends that much of current decision theory under ambiguity follows in Keynes’s footsteps |
| Keywords: | uncertainty, expectations, Keynes, consensus distribution, epsilon-contamination |
| JEL: | B26 D81 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:777&r=hpe |
| By: | Bueno, Nicolas |
| Abstract: | It may appear to be paradoxical to celebrate work as a human right in an economic system in which for many work is associated with activities that are rather repetitive or stressful, sometimes meaningless, and seldom freely chosen. After presenting the content and historical origins of the human right to work, as defined in Article 6 of the International Covenant on Economic, Social and Cultural Rights, this article argues that the right to work cannot be universally fulfilled in the contemporary state-centred global economy. Moving beyond economic discussions placing too much attention on how to provide enough but sometimes unfulfilling work, the article examines the human potential to reduce the need to work. It outlines the theoretical and definitional foundations of the ‘human economy’, where human potential and creativity are rewarded in order to make the transition from the right to work to the freedom from work. The human economy is a potentialist approach in which the right to be free to choose work plays an increasing role |
| Keywords: | right to work; human capital; post-capitalism; capabilities; basic income; freedom from work |
| JEL: | N0 R14 J01 |
| Date: | 2017–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86421&r=hpe |
| By: | Peter Skott (University of Massachusetts - Amherst) |
| Abstract: | Post-Keynesian macroeconomics faces several challenges. The labor market and the supply side, first, have not been getting the attention that they deserve in post-Keynesian growth theory. The failings of the Lucas-type microeconomic foundations, second, must not lead to a neglect of microeconomic behavior. Convincing macroeconomic theories must recognize and address the connections between macroeconomic relations and the microeconomic behavior whose aggregate manifestation the relations represent. Microeconomic behavior, third, takes place within an institutional structure that shapes economic behavior and economic outcomes. Macroeconomic theory must be both behavioral and structuralist. |
| Keywords: | Neo-Pasinetti theorem, mature economy, induced technical change, autonomous demand, instability, goal orientation |
| JEL: | E12 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2018-03&r=hpe |
| By: | Herr, Hansjörg |
| Abstract: | Keynes, following the tradition of Marx, argued that all values are created by labour and profits. However, functional income distribution between wages and profits is explained differently. In Marx's explanation of functional income distribution, wages are given as a basket of goods needed for the reproduction needs of the working class. Profits are then the remaining part of income creation. Given the capital stock, the profit rate can be calculated. The paper shows that Marx's explanation of functional income distribution has several theoretical and practical shortcomings. The Keynesian paradigm in the tradition of the original Keynes provides an alternative. Here the profit rate is given by processes in the financial market, and, among other things, by the interest rate. Monopolistic or oligopolistic structures, following the tradition of Kalecki, can also influence the profit rate. In addition, financialisation can push up the profit rate. Given the capital stock the consumption basket of workers depends on the level of productivity and the profit rate explained in a Keynesian and Kaleckian way. |
| Keywords: | Marxism,functional income distribution,Sraffa,Keynesianism |
| JEL: | B24 B51 E25 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1012018&r=hpe |
| By: | Gechun Liang; Haodong Sun |
| Abstract: | This paper introduces a new class of Dynkin games, where the two players are allowed to make their stopping decisions at a sequence of exogenous Poisson arrival times. The value function and the associated optimal stopping strategy are characterized by the solution of a backward stochastic differential equation. The paper further applies the model to study the optimal conversion and calling strategies of convertible bonds, and their asymptotics when the Poisson intensity goes to infinity. |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1803.00329&r=hpe |
| By: | Miguel Alvarez Texocotitla; M. David Alvarez Hernandez; Shani Alvarez Hernandez |
| Abstract: | The fundamental purpose of the present research article is to introduce the basic principles of Dimensional Analysis in the context of the neoclassical economic theory, in order to apply such principles to the fundamental relations that underlay most models of economic growth. In particular, basic instruments from Dimensional Analysis are used to evaluate the analytical consistency of the Neoclassical economic growth model. The analysis shows that an adjustment to the model is required in such a way that the principle of dimensional homogeneity is satisfied. |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1802.10528&r=hpe |
| By: | Kleppe, John (Tilburg University, School of Economics and Management); Borm, Peter (Tilburg University, School of Economics and Management); Hendrickx, Ruud (Tilburg University, School of Economics and Management) |
| Abstract: | Proper equilibrium plays a prominent role in the literature on non-cooperative games. The underlying thought experiment in which the players play a passive role is, however, unsatisfying, as it gives no justification for its fundamental idea that severe mistakes are made with a significantly smaller probability than innocuous ones. In this paper, we introduce a more active role for the players, leading to the refinement of fall back proper equilibrium. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:50d88189-def5-4187-91bb-9113695aa9b6&r=hpe |
| By: | André Martinez (LIAAD - INESC TEC); Pavel Brazdil (Faculdade de Economia do Porto); Luís Trigo (LIAAD - INESC TEC) |
| Abstract: | In this paper we analyse the scientific production of the researchers of the School of Economics and Management of the University of Porto (FEP). The titles of articles appearing in the bibliographic database Authenticus were used as the basis of this study. We have explored the representation in the form of a network visualised as graph, where each researcher is represented by a node. The nodes are connected by the level of similarity of the publications’ titles. To obtain this network we have used the software Affinity Miner. This software can also identify affinity groups that join researchers with similar publications. We have explored two methods for this purpose and determined that Louvain’s method produces the best results. As the original network has a rather high density of links, the visual analysis would be rather difficult if the network were not simplified. Simplification is done by removing the weakest links. Using a measure called modularity with component penalty, we determine an adequate value for the minimum weight of a link. The results obtained with this methodology are interesting. First, it can identify both central researchers of FEP and central researchers in each scientific group (e.g. in Economics, Management, etc.). The 9 affinity groups that were generated are also of interest. We note that the scientific group of Economics is divided into 3 rather cohesive subgroups. Two of those include mainly researchers from this scientific group, while the third one is a mix of researchers mainly from Economics and Management. All affinity groups are characterised by automatically generated keywords. Similar analysis can be done for all other scientific subgroups. In our opinion, the structures discovered are pertinent and provide interesting insights into how FEP is in fact organised. |
| Keywords: | Publications of FEP, affinity networks, visualization, graphs, centrality measures, community detection |
| JEL: | C00 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:599&r=hpe |
| By: | Benjamin Enke |
| Abstract: | An influential body of psychological and anthropological theories holds that societies exhibit heterogeneous cooperation systems that differ both in their level of in-group favoritism and in the tools that they employ to enforce cooperative behavior. According to some of these theories, entire bundles of functional psychological adaptations – religious beliefs, moral values, negative reciprocity, emotions, and social norms – serve as “psychological police officer” in different cooperation regimes. This paper uses an anthropological measure of the tightness of historical kinship systems to study the structure of cooperation patterns and enforcement devices across historical ethnicities, contemporary countries, ethnicities within countries, and among migrants. The results document that societies with loose ancestral kinship ties cooperate and trust broadly, which appears to be enforced through a belief in moralizing gods, individualizing moral values, internalized guilt, altruistic punishment, and large-scale institutions. Societies with a historically tightly knit kinship structure, on the other hand, cheat on and distrust the out-group but readily support in-group members in need. This cooperation regime in turn is enforced by communal moral values, emotions of external shame, revenge-taking, and local governance structures including strong social norms. These patterns suggest that various seemingly unrelated aspects of culture are all functional and ultimately serve the same purpose of regulating economic behavior. |
| Keywords: | Kinship, culture, cooperation, enforcement devices |
| JEL: | D00 O10 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6867&r=hpe |
| By: | Renaud Vignes (IUT Aix-Marseille - Institut Universitaire de Technologie Aix-Marseille - WUR - Wageningen University and Research Center - IUT Aix-Marseille - Institut Universitaire de Technologie Aix-Marseille) |
| Abstract: | L'homme de la Renaissance marque le point de départ d'une grande métamorphose qui conduira à la fin de la société aristocratique. Par la suite, avec homo oeconomicus l'économie s'émancipe des contingences sociales et politiques. Aujourd'hui, c'est dans la Silicon Valley qu'a été conçu un nouvel homme qui veut vivre dans une société « pratique » sans plus s'embarrasser des contraintes de la vie commune. C'est la société technocapitaliste qui va désormais lui offrir tout ce dont il a besoin. Dans celle-ci, le pouvoir d'organisation appartient à des processus technologico-financiers qui voient le libéralisme comme un projet dépassé et inadapté au monde contemporain. Dans ce sens, c'est un projet qui, non seulement ne peut répondre aux grands enjeux auxquels nous devons faire face, mais qui présente aussi de grands risques pour nos libertés. |
| Date: | 2018–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01715631&r=hpe |
| By: | Edgar Salgado Chavez (Department of Economics, University of Sussex) |
| Abstract: | This paper evaluates the effect of conflict over the formation of trust and identity. It finds that Peruvian individuals exposed to violent events during their impressionable years trust less government institutions, and feel less identified with their neighbors, while more identified with religious groups. The effect on identification is heterogeneous by the indigenous origin of the individuals. Individuals who own an agricultural plot embedded in a communal arrangement at the local level exhibit even smaller levels of identification with their local neighbours while higher levels of identification with their ethnic group. In line with recent literature, these findings suggest that conflict has a small but persistent effect on the formation of trust and identity, which is a central feature to understand the interaction between culture and institutions, and ultimately to understand the persistent consequences of wars. |
| Keywords: | beliefs; conflict; identity |
| JEL: | D74 N16 P26 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:0618&r=hpe |
| By: | Landiyanto, Erlangga Agustino |
| Abstract: | A better understanding of the role, epistemology and methodology of research are very important to generate evidence to strengthen development policies to improve development outcomes. This essay will discuss the philosophy and operationalisation of research in the development arena with the focus on the role of applied research, epistemological issues and boundary setting, the choice of research methods, and conceptualisation of rigour in development research. |
| Keywords: | Epistemology, Research boundaries, Research Methods, Development Studies. |
| JEL: | B30 O10 Z0 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84726&r=hpe |
| By: | Mukanjari, Samson (Department of Economics, School of Business, Economics and Law, Göteborg University); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | The Paris Agreement was acclaimed as a milestone for climate negotiations. It has also been criticized – as too soft by environmentalists and too constraining by the current U.S. administration, which has decided to leave. The election of President Trump was itself widely interpreted as unexpected, good news for the fossil industry (and less good for the climate). We seek to evaluate the impact of global climate policy making by studying its effect on the stock market value of energy sector firms. In particular, we study the signing of the Paris Agreement and the latest U.S. presidential election. Using event study and impulse indicator saturation methods, we show that both events had only moderate effects. |
| Keywords: | Climate change; election; event study; impulse indicator saturation; Paris climate agreement; Trump. |
| JEL: | G14 Q40 Q54 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0728&r=hpe |
| By: | Kasey Buckles; Daniel Hungerman; Steven Lugauer |
| Abstract: | Many papers show that aggregate fertility is pro-cyclical over the business cycle. In this paper we do something else: using data on more than 100 million births and focusing on within-year changes in fertility, we show that for recent recessions in the United States, the growth rate for conceptions begins to fall several quarters prior to economic decline. Our findings suggest that fertility behavior is more forward-looking and sensitive to changes in short-run expectations about the economy than previously thought. |
| JEL: | E32 E37 J11 J13 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24355&r=hpe |