nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2019‒04‒15
eight papers chosen by
Erik Thomson
University of Manitoba

  1. Do Economic Inequalities Affect Long-Run Cooperation & Prosperity? By Gabriele Camera; Cary Deck; David Porter
  2. Macroeconomics vs Modern Money Theory: Some unpleasant Keynesian arithmetic By Thomas Palley
  3. Teaching and Learning Schumpeter: A Dialogue Between Professor and Student By Dalton, John; Logan, Andrew
  4. On the economic importance of the determinants of long-term growth By Olivier Sterck
  5. Allan Meltzer and the Search for a Nominal Anchor: a speech at the "Meltzer's Contributions to Monetary Economics and Public Policy, Philadelphia, Pa. By Bullard, James B.
  6. The impossible institutionalization of scientific property, 1919-1939 By Gabriel Galvez-Behar
  7. MAI 68 vs MASE Des idées à l’actionnabilité en sciences de gestion By Gérard Desmaison
  8. A Theory of Information overload applied to perfectly efficient financial markets By Giuseppe Pernagallo; Benedetto Torrisi

  1. By: Gabriele Camera (Economic Science Institute, Chapman University & University of Bologna); Cary Deck (University of Alabama & Chapman University); David Porter (Economic Science Institute, Chapman University)
    Abstract: We explore if fairness and inequality motivations affect cooperation in indefinitely repeated games. Each round, we randomly divided experimental participants into donor-recipient pairs. Donors could make a gift to recipients, and ex-ante earnings are highest when all donors give. Roles were randomly reassigned every period, which induced inequality in ex-post earnings. Theoretically, income-maximizing players do not have to condition on this inequality because it is payoff-irrelevant. Empirically, payoff-irrelevant inequality affected participants’ ability to coordinate on efficient play: donors conditioned gifts on their own past roles and, with inequalities made visible, discriminated against those who were better off.
    Keywords: cooperation, experiments, indefinitely repeated games, social dilemmas
    JEL: C70 C90 D03 E02
    Date: 2019
  2. By: Thomas Palley (Economics for Democratic and Open Societies (US))
    Abstract: The last decade has witnessed a significant revival of belief in the efficacy of fiscal policy and mainstream economics is now reverting to the standard positions of mid-1970s Keynesianism. On the coattails of that revival, increased attention is being given to the doctrine of Modern Money Theory (MMT) which makes exaggerated claims about the economic costs and capability of money-financed fiscal policy. MMT proponents are now asserting society can enjoy a range of large government spending programs for free via money financed deficits, which has made it very popular with progressive policy advocates. This paper examines MMT’s assertion and rejects the claim that the US can enjoy a massive permanent free program spree that does not cause inflation. As has long been known by Keynesians, in a static economy money financed deficits can be used to finance programs when the economy is away from the full employment - inflation boundary. However, that window will be temporary to the extent that those deficits drive the economy to full employment. Since the programs are permanent they have to be paid for with taxes or they will generate inflation. That is the economic logic behind the unpleasant Keynesian arithmetic.
    Keywords: Fiscal policy, budget deficits, money finance
    JEL: E00 E12 E62 E63
    Date: 2019–04
  3. By: Dalton, John; Logan, Andrew
    Abstract: Joseph Schumpeter's contributions to economics, including theories about innovation and entrepreneurship, creative destruction, and the debate over capitalism versus socialism, all remain relevant today. There is evidence, however, that Schumpeter's ideas have long received less attention in the classroom than they deserve given the importance economists attach to them. This paper provides a description of a discussion-based course on Schumpeter. Using a dialogue between professor and student before, during, and after the course, we describe the structure of the course and specific details related to content. We also include a syllabus, sources for class materials, and a list of over forty discussion questions. The dialogue allows us to show the dynamic nature of a discussion-based class, something we think Schumpeter would approve.
    Keywords: Joseph Schumpeter; Innovation; Entrepreneurship; Creative Destruction; Education
    JEL: A2 O3 P0
    Date: 2019–04–11
  4. By: Olivier Sterck
    Abstract: The economic literature has identified dozens of statistically significant determinants of long-run growth, from malaria ecology and ruggedness to genetic diversity and the timing of the Neolithic transition. Yet, the economic importance of these factors - understood as their contribution to variation in current GDP per capita - is unknown. In this paper, I propose two complementary approaches to measure economic importance, and apply these methods to assess the importance of the determinants of longrun growth. I find that distance to coast, malaria ecology, and legal origins are the three most important factors explaining contemporary development, ceteris paribus. Temperature, the share of the population from European descent, and the timing of the Neolithic transition are also important. In comparison, ruggedness, genetic diversity, slave trade intensity, and ethnolinguistic fragmentation appear to be relatively unimportant. The effects of malaria ecology, of temperature, of the share of the population from European descent, and of the timing of the Neolithic transition are mutually reinforcing.
    Keywords: Economic importance; Effect size; Long-run growth
    JEL: O1 O4 B4
    Date: 2018
  5. By: Bullard, James B. (Federal Reserve Bank of St. Louis)
    Abstract: In a speech in Philadelphia, St. Louis Fed President James Bullard paid tribute to the late Allan Meltzer, a monetary economist, economic historian and “a great friend of the St. Louis Fed.” Bullard cited Meltzer’s research on the run-up to the Great Inflation of the 1970s and early 1980s and contrasted that period with the inflation targeting era of the past two decades, when inflation was brought under control. “Inflation targeting has worked well because it deals more directly with the coordination of macroeconomic expectations than other approaches. By committing to an inflation target, inflation has generally been kept lower and less variable, and inflation expectations have also been less variable,” Bullard said. “This has been a major achievement of U.S. monetary policy, and one to which Allan Meltzer made an outsized contribution.”
    Date: 2018–01–04
  6. By: Gabriel Galvez-Behar (IRHiS - Institut de Recherches Historiques du Septentrion (IRHiS) - UMR 8529 - CNRS - Centre National de la Recherche Scientifique - Université de Lille)
    Abstract: L'adoption du Bayh-Dole Act en 1980 aux États-Unis est bien souvent considéré comme une rupture dans le rapport que les institutions scientifiques entretiennent avec la propriété intellectuelle et, au-delà, avec la sphère économique. Rares sont les travaux, cependant, qui replacent cette loi dans un contexte historique plus large que celui du « tournant néo-libéral » et la période qui précède la Seconde guerre mondiale reste encore mal connue. L'entre-deux-guerres constitue pourtant un moment important, caractérisé par l'extension du domaine de la propriété intellectuelle et par l'apparition, aux États-Unis, des premières politiques des universités en la matière. Par ailleurs, au lendemain de la Première Guerre mondiale émergent de nombreux débats sur la « propriété scientifique » qui n'ont pas retenu toute l'attention qu'ils méritent.
    Date: 2019
  7. By: Gérard Desmaison (ISEOR - Institut de Socio-économie des Entreprises et des ORganisations - Institut de socio-économie des entreprises et des organisations, UJML - Université Jean Moulin - Lyon III - Université de Lyon)
    Abstract: Il y a 50 ans avait lieu ce que l'on a appelé les Evènements de Mai 68. Cinq ans plus tard, Henri Savall finalisait ses premiers écrits sur le Management par l'Approche Socio-Economique (MASE). Nous expliquons en quoi les idées de mai 68 ont pu influer le Management Socio-Economique et en quoi les deux mouvances porteuses d'innovation se ressemblent et divergent. La RSE peut être considérée issue des idées de mai 68 et le MASE comme un vecteur de gouvernance de la RSE. Cette réflexion conduit à se poser des questions sur la durabilité de l'hétérodoxie en sciences de gestion et l'actionnabilité des innovations managériales en entreprise. Mots clés : Management par l'Approche Socio-Économique (MASE), Mai 68, innovation managériales, actionnabilité.
    Date: 2018–05–22
  8. By: Giuseppe Pernagallo; Benedetto Torrisi
    Abstract: Before the massive spread of computer technology, information was far from complex. The development of technology shifted the paradigm: from individuals who faced scarce and costly information to individuals who face massive amounts of information accessible at low costs. Nowadays we are living in the era of big data and investors deal every day with a huge flow of information. In the spirit of the modern idea that economic agents have limited computational capacity, we propose an original model using information overload to show how too much information could cause financial markets to depart from the traditional assumption of informational efficiency. We show that when information tends to infinite, the efficient market hypothesis ceases to be true. This happens also for lower levels of information, when the use of the maximum amount of information is not optimal for investors. The present work can be a stimulus to consider more realistic economic models and it can be further deepened including other realistic features present in financial markets, such as information asymmetry or noise in the transmission of information.
    Date: 2019–04

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