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on History and Philosophy of Economics |
| By: | Ravagnani, Fabio |
| Abstract: | In two passages of Production of Commodities, Sraffa states very concisely that the analysis presented also applies to viable economic systems in which the means of production consumed are not fully replaced. This aspect of the book has been nearly ignored for a long time, and only in the last two decades have some scholars begun to discuss it in depth. Since these scholars basically rely on the terse references to non-self-replacing systems appearing in Sraffa’s published works, however, a question is left pending in their contributions—what exactly was Sraffa’s position as regards the nature and relevance of those systems? The present note seeks to shed light on this question by systematically examining the pertinent passages of Sraffa’s unpublished manuscripts. On the basis of this examination, the final section briefly comments on some debatable aspects of current renditions of Sraffa’s theory. |
| Keywords: | Sraffa; Production Systems; Modern Classical Approach |
| JEL: | B24 B51 E11 |
| Date: | 2018–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90259&r=hpe |
| By: | Jill Trinh (Business School, The University of Western Australia) |
| Abstract: | This paper examines the relationship between the Pareto distribution and Piketty’s third fundamental law of capitalism. It has been widely known that top income and wealth takes the form of Pareto distribution, yet there is very limited literature investigating the role of Piketty’s third fundamental law of capitalism, in which r (the rate of return on capital) > g (the growth rate of national income), in determining the shape parameter α of the Pareto distribution. The central takeaway of this paper includes: (i) a critical assessment of Piketty’s criticism of Pareto’s work on distributional inequality, presented in Capital in the Twenty First century (2014) in which he indicated that Pareto had an illusion of “stable” inequality; and (ii) a simple agent model to formally demonstrate the relationship between Pareto’s alpha and Piketty’s third fundamental law of capitalism. The first one concerns intellectual history and the second one has contemporary relevance. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:17-11&r=hpe |
| By: | Rogério Arthmar (Department of Economics, Universidade Federal do Espírito Santo); Michael McLure (Business School, The University of Western Australia) |
| Abstract: | This paper examines Keynes's relationship with Gustav Cassel and Eli Hecksher and puts together the events related to him being awarded the 1939 Söderström Gold Medal by The Royal Swedish Academy of Sciences. The correspondence between these economists during the interwar years is detailed, with emphasis on their personal approaches to economic theory and history. Cassel's and Heckscher's critical reviews of Keynes's General Theory are outlined as well. Lastly, an account is provided of the grounds for conferring the award on Keynes while also drawing attention to the conflict-laden proceedings within the Academy when the conferral of the ward was being contemplated. The final remarks ponder why Keynes received the prize in spite of the prevailing controversy within the Swedish School over the General Theory at the time. |
| Keywords: | European reconstruction, purchasing power parity, mercantilism, effective demand, history of science |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:17-17&r=hpe |
| By: | Matthieu Renault |
| Abstract: | Contrarily to standard accounts of the history of macroeconomics, recent research has increasingly paid attention to the Old Keynesians’ criticisms of the New Classical Economics. In this paper, I study another study case through Edmond Malinvaud’s criticisms of the New Classical Economics from the 1980s onwards. I argue that his opposition was radical in the sense that it was both multi-dimensional and systematic. I show, then, that the way he opposed reveals his own conception of macroeconomics, which owed much to the methodology and the practice of macroeconometric modeling. Finally, I suggest that the study of Malinvaud’s opposition to the New Classical Economics shed light on both the nature and rationale of the Old Keynesians’. |
| Keywords: | History of Macroeconomics; Edmond Malinvaud; Old Keynesians; Neoclassical Synthesis; The New Classical Economics; Macroeconometric modeling |
| JEL: | B22 B23 B31 B41 |
| Date: | 2018–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2018wpecon21&r=hpe |
| By: | Dana SISEA (Faculty of Financial Management, Ecological University of Bucharest); Valeria Arina Mircea (Faculty of Financial Management, Ecological University of Bucharest) |
| Abstract: | Ethics, an integral part of philosophy, has evolved closely with philosophical doctrines, with the obvious general-specific relationship between philosophy and ethics. At all stages of the evolution of philosophy, beginning with antiquity, many philosophers were animated by the desire to build and consolidate their thinking in the form of doctrines, currents, concepts and philosophical guidelines, materialized, usually in works, many of them of recognized value over the centuries. The use of several concepts for defining and analyzing different philosophical thoughts (doctrine, conception, current, theory, philosophical orientation), is imposed by several factors associated with a philosophical thinking, such as: theoretical importance and Practice, degree of substantiation, resistance to critical positions of analysts, scientific authority of the exponent of a doctrine, concepts, currents, philosophical guidelines etc. |
| Keywords: | ethics, moral values, reason, philosophical guidelines |
| JEL: | F10 O10 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:eub:wpaper:2018-06&r=hpe |
| By: | Salamanca, Andrés (Department of Business and Economics) |
| Abstract: | In this paper, we introduce a solution concept generalizing the Harsanyi non-transferable utility (NTU) value to cooperative games with incomplete information. The so-defined S-solution is characterized by virtual utility scales that extend the Harsanyi-Shapley fictitious weighted utility transfer procedure. We construct a three-player cooperative game in which Myerson’s [Cooperative games with incomplete information. Int. J. Game Theory, 13, 1984, pp. 69-96] generalization of the Shapley NTU value does not capture some “negative” externality generated by the adverse selection. However, when we explicitly compute the S-solution in this game, it turns out that it prescribes a more intuitive outcome which takes into account the above mentioned informational externality. |
| Keywords: | Cooperative games; incomplete information; virtual utility |
| JEL: | C71 C78 D82 |
| Date: | 2018–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2018_005&r=hpe |
| By: | Jan Kregel |
| Abstract: | Ten years after the fall of Lehman Brothers and the collapse of the US financial system, most commentaries remain overly focused on the proximate causes of the last crisis and the regulations put in place to prevent a repetition. According to Director of Research Jan Kregel, there is a broader set of lessons, which can be unearthed in the work of Distinguished Scholar Hyman Minsky, that needs to play a more central role in these debates on the 10th anniversary of the crisis. This insight begins with Minsky's account of how crisis is inherent to capitalist finance. Such an account directs us to shore up those government institutions that can serve as bulwarks against the inherent instability of the financial system--institutions that can prevent that instability from turning into a prolonged crisis in the real economy. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levypn:18-5&r=hpe |
| By: | Frolov, Daniil |
| Abstract: | The paper examines the internal dualism of modern institutional economics manifested in division of orthodox or mainstream institutionalism (its axiomatics and dogmatics is represented by the Standard Model) and its opposition – post-institutionalism. It discusses the post-institutional agenda, covering a wide range of discussion issues beyond Standard Model – from the analysis of institutional complexity to introduction of the Evo-Devo paradigm into evolutionary research of institutions. It demonstrates that in the focus of post-institutionalism there are super-complicated institutional systems (assemblages) and related phenomena and processes (bricolage, kludges, anomalies, configurations), which can only be comprehended by overcoming unilateral and dichotomous approaches of the institutional mainstream |
| Keywords: | institutions, institutional evolution, institutional complexity, transaction costs, assemblages, bricolage, post-institutionalism |
| JEL: | A12 B41 B52 |
| Date: | 2018–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90287&r=hpe |
| By: | Bartling, Björn (University of Zurich); Fehr, Ernst (University of Zurich); Huffman, David B. (University of Pittsburgh); Netzer, Nick (University of Zurich) |
| Abstract: | Trust affects almost all human relationships – in families, organizations, markets and politics. However, identifying the conditions under which trust, defined as people's beliefs in the trustworthiness of others, has a causal effect on the efficiency of human interactions has proven to be difficult. We show experimentally and theoretically that trust indeed has a causal effect. The duration of the effect depends, however, on whether initial trust variations are supported by multiple equilibria. We study a repeated principal-agent game with multiple equilibria and document empirically that an efficient equilibrium is selected if principals believe that agents are trustworthy, while players coordinate on an inefficient equilibrium if principals believe that agents are untrustworthy. Yet, if we change the institutional environment such that there is a unique equilibrium, initial variations in trust have short-run effects only. Moreover, if we weaken contract enforcement in the latter environment, exogenous variations in trust do not even have a short-run effect. The institutional environment thus appears to be key for whether trust has causal effects and whether the effects are transient or persistent. |
| Keywords: | trust, causality, equilibrium selection, belief distortions, incomplete contracts, screening, institutions |
| JEL: | C91 D02 D91 E02 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11917&r=hpe |
| By: | Jean-Luc Gaffard |
| Abstract: | This paper is aimed at revisiting monetary analysis in order to better understand erroneous choices in the conduct of monetary policy. According to the prevailing consensus, the market economy is intrinsically stable and is upset only by poor behaviour by government or the banking system. We maintain on the contrary that the economy is unstable and that achieving stability requires a discretionary economic policy. This position relies upon an analytical approach in which monetary and financial organisations are devices that help markets to function. In this perspective, which focuses on the heterogeneity of markets and agents, and, consequently, on the role of institutions in determining overall performance, it turns out that nominal rigidities and financial commitment offer the means to achieve economic stability. This is because they prevent successive, unavoidable disequilibria from becoming explosive. |
| Keywords: | inflation, market, money, stability |
| Date: | 2018–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2018/37&r=hpe |
| By: | Ulrik W. Nash |
| Abstract: | We suggest that one individual holds multiple degrees of belief about an outcome, given the evidence. We then investigate the implications of such noisy probabilities for a buyer and a seller of binary options and find the odds agreed upon to ensure zero-expectation betting, differ from those consistent with the relative frequency of outcomes. More precisely, the buyer and the seller agree to odds that are higher (lower) than the reciprocal of their averaged unbiased probabilities when this average indicates the outcome is more (less) likely to occur than chance. The favorite-longshot bias thereby emerges to establish the foundation of an equitable market. As corollaries, our work suggests the old-established way of revealing someone's degree of belief through wagers may be more problematic than previously thought, and implies that betting markets cannot generally promise to support rational decisions. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1811.12516&r=hpe |
| By: | Adam Fedyniuk (Nicolaus Copernicus University) |
| Abstract: | There are many definitions, approaches and models of technological singularity. In most cases it can be summarized as ?changes in the mode of human life, which gives appearance of approaching some essential singularity in the history of human race, beyond which human affairs, as we know them, could not continue?1. When considering the possibility of technological singularity in the form of emergence of superintelligence, we are given also some variety in its facets like, self-improving technology, accelerating change or simply put, intelligence explosion2. These forms vary in the antecedents that define the initial state of affairs that would become the foundation of the arrival of singularity. The debate concerning this hypothetical phenomenon can be polarizing, with no consensus on the horizon. Even when we take into account cognitive science, as the basis for formulation of possible paths technological progress can take, and result in a singularity, there can be a stern critique3. Still, with a balance between enthusiasm and critique, being rooted in constructive approach to this idea, we can make viable attempt at better understanding and predicting what future may hold for the human race4. Comparably, with the advent of connectomics and the advancement of studies on large-scale networks we can make even more detailed attempt at explaining and modelling possible emergence of artificial general intelligence. Especially, due to how we can of define and model emergent properties that such biological organisations possess5. The methods, with which we can view, analyze and discover properties of hierarchical structures can lead the way into a more detailed view of cognition. There is also the possibility of emulating it on a more robust platform (self-improving array of integrated circuits, adiabatic processors and similar). we have the possibility to design AI that will spark a paradigm-shift for the future research and our understanding of mind. |
| Keywords: | technological singularity, connectomics, network theory, complexity, emergence |
| JEL: | O31 O33 D85 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:7010263&r=hpe |
| By: | Lauren Larrouy (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - Centre National de la Recherche Scientifique - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur); Guilhem Lecouteux (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - Centre National de la Recherche Scientifique - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur , UCA - Université Côte d'Azur) |
| Date: | 2018–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01923244&r=hpe |
| By: | Abdelghani Maddi (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | En s'appuyant sur les techniques de cartographie, en se basant sur l'analyse textuelle et l'analyse des réseaux de citations nous avons analysé le développement de la thématique de la crise économique. L'objectif est de montrer dans un premier temps les courants de pensée et les auteurs influents. Dans un second temps comprendre son évolution à travers le temps. Pour ce faire, nous avons extrait de l'interface du WOS en ligne l'ensemble des publications contenant le mot « crisis » dans les catégories disciplinaires « economics » et « business & finance ». Notre requête renvoie plus de 24000 publications. Nos résultats nous ont permis de montrer les différents courants de pensée dominant l'analyse de la crise économique ainsi que les auteurs les plus influents. L'analyse textuelle des termes présents dans les titres, résumé et mots-clés montre des changements majeurs dans la façon dont les économistes traitent le sujet. Désormais, une bonne partie des publications traitant la thématique de la crise économique cherche non pas à traiter les conséquences ou à proposer des solutions, mais plutôt prévoir l'avènement des crises à travers l'analyse des différents risques qui conduiraient à une crise. Nous avons montré également que cette thématique est très fortement dominée par la finance tant au niveau microéconomique que macroéconomique. |
| Keywords: | crise économique,analyse textuelle,bibliométrie,citations,références bibliographiques |
| Date: | 2018–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cepnwp:hal-01922256&r=hpe |
| By: | Eric Benhamou |
| Abstract: | In this paper, we revisit the Kalman filter theory. After giving the intuition on a simplified financial markets example, we revisit the maths underlying it. We then show that Kalman filter can be presented in a very different fashion using graphical models. This enables us to establish the connection between Kalman filter and Hidden Markov Models. We then look at their application in financial markets and provide various intuitions in terms of their applicability for complex systems such as financial markets. Although this paper has been written more like a self contained work connecting Kalman filter to Hidden Markov Models and hence revisiting well known and establish results, it contains new results and brings additional contributions to the field. First, leveraging on the link between Kalman filter and HMM, it gives new algorithms for inference for extended Kalman filters. Second, it presents an alternative to the traditional estimation of parameters using EM algorithm thanks to the usage of CMA-ES optimization. Third, it examines the application of Kalman filter and its Hidden Markov models version to financial markets, providing various dynamics assumptions and tests. We conclude by connecting Kalman filter approach to trend following technical analysis system and showing their superior performances for trend following detection. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1811.11618&r=hpe |
| By: | Fenoaltea, Stefano |
| Abstract: | This paper argues that we cliometricians have failed as economists, because we did not drag the profession out of the nineteenth century and into the twentieth; that we have failed as historians, because we do not take measurement seriously, and misapprehend “the data”; and that we failed signally as economic historians, because we backcast “GDP” as if it measured gross domestic product. |
| Keywords: | economics, economic history, cliometrics |
| JEL: | A10 B40 N01 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90210&r=hpe |
| By: | Michael McLure (Business School, The University of Western Australia) |
| Abstract: | Polemical views are held among many historians as to whether the ‘original version’ of the Edgeworth box was drawn by Edgeworth, in his 1881 Mathematical Psychics, or Pareto, in his 1906 Manual of Political Economy. This study demonstrates that that polemic is largely attributable to a failure to consider the relationship between ‘trade’ flow oriented indifference curves drawn in Edgeworth’s Figures 1 and 5 and the implications of the relationship between those two diagrams for the definition of the origin of Edgeworth’s Figure 1. A new history of Edgeworth’s and Pareto’s contributions to the development of the Edgeworth box diagram is presented that highlights the intermediate role played by Pareto’s graph, from his 1902 article ‘On a New Error in the Interpretation of the Theories of Mathematical Economics’, which derives from Edgeworth’s Figure 5 except Pareto maps the indifference curves in the standard ‘allocation’ orientation. |
| Keywords: | Box diagram, Creedy, Edgeworth, Jaffé, Pareto, Tarascio |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:17-12&r=hpe |
| By: | Rogério Arthmar (Department of Economics, Universidade Federal do Espírito Santo, Brazil); Michael McLure (Business School, The University of Western Australia) |
| Abstract: | This study reflects on Arthur Cecil Pigou’s contribution to public debate over Britain’s return to peace during the initial period the First World War. It explores Pigou's letters to The Nation, in early 1915, suggesting an open move by the Allies towards an honourable peace with Germany; and provides and account of the fierce controversy that erupted in the British press in reaction to Pigou's proposal. The study also places Pigou’s efforts at persuading the broader public of a peace treaty with Germany within the context of events at Cambridge. That is achieved by providing an outline of the March 1915 debate, at the Cambridge Union Society, on Pigou's motion for a moderate Allied peace policy to secure Germany’s ‘conditional’ surrender. Pigou's assessment of the conditions for peace is also compared with those formulated at the time by William Cunningham, Bertrand Russell and Goldsworthy Lowes Dickinson. The study ends with a critical reflection on Pigou’s plan for ending the war. |
| Keywords: | peace, war costs, reparations, foreign policy, commercial integration |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:17-14&r=hpe |