nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2019‒07‒22
eight papers chosen by
Erik Thomson
University of Manitoba

  1. Ethics out of Economics: The Futile Attempt of Rendering Economics a Neutral Science. By Guglielmo Chodi
  2. Tom Hertel’s influence and its lessons about academic inquiry By Hillberry, Russell; David Hummels
  3. Errors in Probabilistic Reasoning and Judgment Biases By Daniel J. Benjamin
  4. Commanding Nature by Obeying Her: A Review Essay on Joel Mokyr’s A Culture of Growth By Enrico Spolaore
  5. Monetary Policy in the Post-Crisis Era : a speech at "Bretton Woods: 75 Years Later—Thinking about the Next 75," a conference organized by the Banque de France and the French Ministry for the Economy and Finance, Paris, France, July 16, 2019. By Powell, Jerome H.
  6. "I" on You: Identity in the Dictator Game By Anita Kopányi-Peuker; Jin Di Zheng
  7. Macroeconomic Research, Present and Past By P.J. Glandon; Ken Kuttner; Sandeep Mazumder; Caleb Stroup
  8. Identify economics: social influence and skill development By Jonathan Norris

  1. By: Guglielmo Chodi (Department of Social Sciences and Economics, Sapienza University of Rome (IT).)
    Abstract: Over the last century, and several times until recently, mainstream economics has been criticized from different viewpoints. Most of the critiques highlighted the weakness of its methodological and logical structure, not to mention its inadequate capacity of tackling with the new problems posed by globalization. However, mainstream economics has always shown itself strong enough as to stand up victoriously most of the times, notwithstanding those critiques, which quite often turned out to be even devastating from the logical point of view. The object of my report will be mainly focused on highlighting one of the most important reason for which mainstream economics should be considered altogether inadequate for tackling with many problems of the real world. And that reason essentially lies in the very fact that mainstream economics has since long put any ethical aspect completely outside its basic framework. One the most important consequences of that operation has been that of rendering economic theory perilously free of any value-judgment and therefore uncontaminated by any possible social and political change in society, even by the most significant ones. The report will then briefly reconstruct the most significant steps through which that process was accomplished, by bringing about, at the same time, the severe drawbacks of that futile attempt of rendering economics neutral in its analysis and its policy prescriptions.
    Keywords: Ethics, Classical Political Economy, Orthodox Economic Theory, Robbins, Sraffa.
    JEL: A11 A12 A13 B1 B2 B5
    Date: 2019–07
  2. By: Hillberry, Russell; David Hummels
    Abstract: Fields of academic inquiry differ in their preferred forms of output, in the ways in which knowledge is accumulated and stored, and so in the ways that academic influence is measured. We compare Tom Hertel’s research record to other international economists of his generation in order to illustrate the unique breadth and influence of his work, and of the GTAP project broadly. We then provide an analytical framework that helps explain the evolution of the field of international economics from a tool-use standpoint. This framework helps us to assess the academic productivity gains from creating the GTAP model and consortium. It also provides a possible answer to a significant puzzle: why is GTAP increasingly influential in the physical and biological sciences, but less so within the international economics community?
    Date: 2018
  3. By: Daniel J. Benjamin (University of Southern California and NBER)
    Abstract: Errors in probabilistic reasoning have been the focus of much psychology research and are among the original topics of modern behavioral economics. This chapter reviews theory and evidence on this topic, with the goal of facilitating more systematic study of belief biases and their integration into economics. The chapter discusses biases in beliefs about random processes, biases in belief updating, the representativeness heuristic as a possible unifying theory, and interactions between biased belief updating and other features of the updating situation. Throughout, I aim to convey how much evidence there is for (and against) each putative bias, and I highlight when and how different biases may be related to each other. The chapter ends by drawing general lessons for when people update too much or too little, reflecting on modeling challenges, pointing to areas of economics to which the biases are relevant, and highlighting some possible directions for future work.
    Keywords: Gambler’s fallacy, Law of Small Numbers, hot hand, partition dependence, sample-size neglect, non-belief in the Law of Large Numbers, conservatism bias, Base-rate neglect, Representativeness heuristic, Confirmation bias
  4. By: Enrico Spolaore
    Abstract: Why is modern society capable of cumulative innovation? In A Culture of Growth: The Origins of the Modern Economy, Joel Mokyr persuasively argues that sustained technological progress stemmed from a change in cultural beliefs. The change occurred gradually during the seventeenth and eighteenth century and was fostered by an intellectual elite that formed a transnational community and adopted new attitudes toward the creation and diffusion of knowledge, setting the foundation for the ethos of modern science. The book is a significant contribution to the growing literature that links culture and economics. This review discusses Mokyr’s historical analysis in relation to the following questions: What is culture and how should we use it in economics? How can culture explain modern economic growth? Will the culture of growth that caused modern prosperity persist in the future?
    JEL: N0 N13 N33 O3 O52 Z1
    Date: 2019–07
  5. By: Powell, Jerome H. (Board of Governors of the Federal Reserve System (U.S.))
    Date: 2019–07–16
  6. By: Anita Kopányi-Peuker (University of Amsterdam); Jin Di Zheng (Nanjing Audit University)
    Abstract: We study a giver’s generosity depending on her relationship with the recipient and the observer. We assign different group identities to the players using a variation of the minimumgroup paradigm, and test the effect of group memberships on altruistic giving in the dictator game with a passive observer. The results show that the dictator gives the least when she is from a different group than the other two. We further show that dictators give more when there is no observer. This is driven by male subjects who react more to the presence of the observer.
    Keywords: dictator game, observer, group identity, laboratory experiment
    JEL: D91 C72 C92
    Date: 2019–07–16
  7. By: P.J. Glandon (Kenyon College); Ken Kuttner (Williams College); Sandeep Mazumder (Wake Forest University); Caleb Stroup (Davidson College)
    Abstract: What is the state of macroeconomics? We answer this question by hand collecting information about the epistemological approaches, theoretical and empirical methods, and data sources used by macroeconomists in their research. During the past 40 years there has been an increasing reliance on mathematical theory, particularly DSGE models, with theory-based papers now occupying the majority of space in macro journals. This shift is mirrored by a decline in the use of empirical falsification methods testing theoretical predictions. Microeconometric techniques have displaced time series methods, and empirical papers increasingly rely on micro and proprietary data sources. We document a decline and subsequent resurgence of financial frictions appearing in macro theory. Finally, we find that topics outside of macroeconomics are studied in more than three fourths of macro field journal publications.
    Keywords: macroeconomics, methods, research, macroeconomic publications
    JEL: A11 A14 B22 E00 O30
    Date: 2019–07
  8. By: Jonathan Norris (Department of Economics)
    Abstract: Within the economic literature, studies in identity economics, peer effects, and skill development have all suggested that social influences have an important role in determining choices. In this review, I draw on lessons learned from the identity economics literature to examine implications from the peer effects and skill development literature. I focus on the role of social identity in generating social group effects from peers and what role identity may have in shaping the development of skills from broader environments, parents and peers during childhood and adolescence.
    Keywords: identify economics, skill development, peer effects, parental skill investments
    JEL: I3 J0
    Date: 2019–07

This nep-hpe issue is ©2019 by Erik Thomson. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.