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on History and Philosophy of Economics |
| By: | Clive Spash |
| Abstract: | The proposal has been put forward that ecological economics seek to become substantive economics (Gerber and Scheidel 2018). This raises important issues about the content and direction of ecological economics. The division of economics into either substantive or formal derives from the work of Karl Polanyi. In developing his ideas Polanyi employed a definition from Menger and combined this with Tönnies theory of historical evolution. In this paper I explore why the resulting substantive vs. formal dichotomy is problematic. In particular the article exposes the way in which trying to impose this dichotomy on history of economic thought and epistemology leads to further false dichotomies. Besides Polanyi, the positions of other important thinkers informing social ecological economics (SEE) are discussed including Neurath, Kapp and Georgescu-Roegen. The aim is to clarify the future direction of ecological economics and the role, in that future, of ideas raised under the topic of substantive economics. |
| Keywords: | Substantive economics; Karl Polanyi; Formal economics; History of thought; Epistemology; Social ecological economics; Economic anthropology |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwsre:sre-disc-2019_05&r=all |
| By: | Spash, Clive L. |
| Abstract: | The proposal has been put forward that ecological economics seek to become substantive economics (Gerber and Scheidel 2018). This raises important issues about the content and direction of ecological economics. The division of economics into either substantive or formal derives from the work of Karl Polanyi. In developing his ideas Polanyi employed a definition from Menger and combined this with Tönnies theory of historical evolution. In this paper I explore why the resulting substantive vs. formal dichotomy is problematic. In particular the article exposes the way in which trying to impose this dichotomy on history of economic thought and epistemology leads to further false dichotomies. Besides Polanyi, the positions of other important thinkers informing social ecological economics (SEE) are discussed including Neurath, Kapp and Georgescu-Roegen. The aim is to clarify the future direction of ecological economics and the role, in that future, of ideas raised under the topic of substantive economics. |
| Keywords: | Substantive economics; Karl Polanyi; Formal economics; History of thought; Epistemology; Social ecological economics; Economic anthropology |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus009:7045&r=all |
| By: | Luca Fantacci; Lucio Gobbi; Stefano Lucarelli |
| Abstract: | This paper presents a critical analysis of the way in which international monetary economics is normally taught. The objective of this paper is twofold. On the one hand, we show how the most popular international economics manuals deal with exchange rate theory and its link with balance of payments equilibrium. In particular, we stress how the models proposed in these manuals cannot explain one of the biggest macroeconomic problems of our time, that of the imbalances of the balance of payments. On the other hand, we put forward an alternative Keynesian model. Assuming neither full employment nor balanced trade over the short or long run, the paper is intended as a new contribution to the post-Keynesian analysis of exchange rate theory. Finally, our model gives an original insight into the relationship between Liquidity Trap and structural economic imbalances in modern economies. |
| Keywords: | international monetary economics, exchange rate determination, endogenous money, global imbalances, post-Keynesian economics |
| JEL: | A20 B50 E12 F41 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwprg:2019/07&r=all |
| By: | Lorenzo Esposito; Giuseppe Mastromatteo |
| Abstract: | The 2008 crisis created a need to rethink many aspects of economic theory, including the role of public intervention in the economy. On this issue, we explore the Barro-Ricardo equivalence, which has played a decisive role in molding the economic policies that fostered the crisis. We analyze the equivalence and its theoretical underpinnings, concluding that: (1) it declares, but then forgets, that it does not matter whether the nature of debt and investment is public or private; (2) its most problematic assumption is the representative agent hypothesis, which does not allow for an explanation of financialization and cannot assess dangers coming from high levels of financial leverage; (3) social wealth cannot be based on any micro-foundation and is linked to the role of the state as provider of financial stability; and (4) default is always the optimal policy for the government, and this remains true even when relaxing many equivalence assumptions. We go on to discuss possible solutions to high levels of public debt in the real world, inferring that no general conclusions are possible and every solution or mix of solutions must be tailored to each specific case. We conclude by connecting different solutions to the political balance of forces in the current era of financialization, using Italy (and, by extension, the eurozone) as a concrete example to better illustrate the discussion. |
| Keywords: | Barro-Ricardo Equivalence; Financialization; Default |
| JEL: | E62 H23 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_933&r=all |
| By: | A. Soci |
| Abstract: | The paper is about the political consequences of increasing economic inequality in Western economies. Political theorists have often stressed that democracy is in troubles when its population is not broadly uniform in income and wealth because unequal economic resources can easily translate into a surplus of political resources in the hands of the few. The connections between economic inequality and democracy, however, are not easy to detect and the body of literature is not so large to provide robust assessments of their complex relationship. The aim of this paper is to review the links between the two and to offer some hints on the political relevance of the inequality consequences, if any, on democracy. |
| JEL: | A13 D6 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1131&r=all |
| By: | Hitoshi Matsushima (Faculty of Economics, The University of Tokyo) |
| Abstract: | This study investigates infinitely repeated games of a prisoner’s dilemma with additive separability in which the monitoring technology is imperfect and private. Behavioral incentives indicate that, in this setting, a player is not only motivated by pure self-interest but also by reciprocity. Players often become naïve and select an action unconsciously. By focusing on generous tit-for-tat strategies, we characterize a Nash equilibrium with behavioral incentives, termed behavioral equilibrium, in an accuracy-contingent manner. By eliminating the gap between theory and evidence, this study argues that reciprocity plays a substantial role in motivating a player to consciously make decisions. |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2019cf1115&r=all |
| By: | J. Aislinn Bohren; Kareem Haggag; Alex Imas; Devin G. Pope |
| Abstract: | Discrimination has been widely studied in economics and other disciplines. In addition to identifying evidence of discrimination, economists often categorize the source of discrimination as either taste-based or statistical. Categorizing discrimination in this way can be valuable for policy design and welfare analysis. We argue that a further categorization is important and needed. Specifically, in many situations economic agents may have inaccurate beliefs about the expected productivity or performance of a social group. This motivates our proposed distinction between accurate (based on correct beliefs) and inaccurate (based on incorrect beliefs) statistical discrimination. We do a thorough review of the discrimination literature and argue that this distinction is rarely discussed. Using an online experiment, we illustrate how to identify accurate versus inaccurate statistical discrimination. We show that ignoring this distinction – as is often the case in the discrimination literature – can lead to erroneous interpretations of the motives and implications of discriminatory behavior. In particular, when not explicitly accounted for, inaccurate statistical discrimination can be mistaken for taste-based discrimination, accurate statistical discrimination, or a combination of the two. |
| JEL: | D90 J71 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25935&r=all |
| By: | Matthias Aistleitner (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria); Stephan Puehringer (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria) |
| Abstract: | In the aftermath of recent populist upheavals in Europe, the U.S., the UK and other areas around the world, nationalist economic policies challenge the overly positive view on economic integration and the reduction of trade barriers established by standard economic theory. For quite a long time the great majority of economists supported trade liberalization policies, at least those, who were actively engaged in policy advice or public debates. Yet it was hardly investigated whether this general support emerges from a consensus view among economists on this issue or whether only a partisan interpretation of economic expertise is used to serve a distinct political purpose. Against this background, in this paper we examine the elite economics discourse on trade and trade policies by applying a multilevel mixedmethod approach. In doing so we combine quantitative methods with a discourse analytical approach in order to examine dominant narratives and imaginaries present in high impact papers dealing with trade, globalization and related policy issues. Our analysis yields the following results: First, the hierarchical structure of economics is also present in the economic debate on trade. Second, the top economic discourse on trade is predominantly characterized by a normative bias in favor of trade liberalization policies leading to a systematically underestimation of negative effects of free trade policies. Third, we found that other-thaneconomic impacts and implications (political, social and cultural as well as environmental issues) of trade policies either remain unmentioned or are rationalized by means of pure economic criteria. To sum up, we conclude that the narrow perspective present in top economics discourse on trade prevents a more comprehensive understanding of the multifaceted gains and challenges related to the issue of international integration. |
| Keywords: | trade narratives, discourse analysis, sociology of economics, bibliometric analysis, top economic journals |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:ico:wpaper:97&r=all |