nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2019‒10‒07
nine papers chosen by
Erik Thomson
University of Manitoba

  1. The economics of eudaimonia By Pugno, Maurizio
  2. Trade and terroir. The political economy of the world's first geographical indications By Giulia Meloni; Jo Swinnen
  3. Recovering Tinbergen By Morgan, Mary S.
  4. Pessimism and Overcommitment By Claes Ek; Margaret Samahita
  5. Lorenzo Tonti, inventeur de la tontine By Georges GALLAIS-HAMONNO; Christian RIETSCH
  6. Learning under Diverse World Views: Model-Based Inference By George J. Mailath; Larry Samuelson
  8. Early French and German central bank charts and regulations By Bindseil, Ulrich
  9. In Search of Reforms for Growth: New Stylized Facts on Policy and Growth Outcomes By William Easterly

  1. By: Pugno, Maurizio
    Abstract: Research in the Economics of Happiness has recently paid increasing attention to ‘eudaimonia’, which is a conception of happiness originated in ancient Greek philosophy, and in particular in Aristotle’s philosophy. Since ‘eudaimonia’ is a way of life rather than a circumscribed goal, its understanding requires a dynamic analytical structure. To this end, the paper provides two main contributions. First, in order to facilitate reading by the economists of Aristotle’s work, this is translated in modern economic terms, i.e. eudaimonia is described as an individual activity that transforms inputs into outputs. Second, this description is reformulated, with the help of studies in psychology and anthropology, in a modern ‘economic approach to eudaimonia’, which focuses on human development, i.e. on the development of the skills which are typically human. A number of implications are then discussed: about how some weaknesses of Aristotle’s conception of eudaimonia can be amended (e.g. the objective/subjective reconciliation); about the greater robustness of eudaimonia with respect to hedonism as two alternative pathways to happiness that people can choose; and about the advantages of the policy implications of eudaimonia.
    Keywords: happiness; eudaimonia; Aristotle; well-being; hedonism
    JEL: A12 I31 O15
    Date: 2019–09–30
  2. By: Giulia Meloni; Jo Swinnen
    Abstract: The world’s first geographical indications (GIs) were in the wine sector and focused on the delineation of the location of production, the ‘terroir’: the Burgundy wines in the fifteenth century, the Port wines and Chianti wines in the eighteenth century, and the Champagne wines in the early twentieth century. We analyze the causes for the introduction of these GIs (‘terroirs’) and for changes in their delineation (expansion) later on. Our analysis shows that trade played a very important role in the creation of the ‘terroirs’ but not always through the same mechanisms. For the Port and Chianti GIs it was exports to Britain that were crucial; for Burgundy it was domestic trade to Paris; and for the Champagne GI it was not exports but pressure from wine imports and new wine regions that played a crucial role. For the expansions of the GIs later in history, other factors seem to have been equally important. Expansions of the GIs in the years and centuries after their introduction followed major changes in political power; the spread of a new philosophy in liberal and free markets across Europe; and infrastructure investments which opened up markets and made exports cheaper from “new” producers.
    Date: 2018–01
  3. By: Morgan, Mary S.
    Abstract: From the long viewpoint of history of economics, the two most important contributions that Jan Tinbergen made to economics are surely the development of the first macro-econometric model and a general theory of economic policy-making. This paper explores these two innovations to recover why they deserve such recognition, analyses their technical and conceptual depths, and shows how they relate to the economic history of the period and his personal history. In the process, it becomes clear that they are not separate innovations, but, as Tinbergen recognised, involved the same logic; and as we can recognise, were driven by the same ambition to make economics usable in the world.
    Keywords: history of econometrics; theory of policy; jan tinbergen
    JEL: B20 B31 O21
    Date: 2019–09
  4. By: Claes Ek; Margaret Samahita
    Abstract: Economic agents commonly use commitment devices to limit impulsive behavior in the interest of long-term goals. We provide evidence for excess demand for commitment in a laboratory experiment. Subjects are faced with a tedious productivity task and a tempting option to surf the internet. Subjects state their willingness-to-pay for a commitment device that removes the option to surf. The commitment device is then allocated with some probability, thus allowing us to observe the behavior of subjects who demand commitment but have to face temptation. We find that a significant share of the subjects overestimate their demand for commitment when compared to their material loss from facing the temptation. This is true even when we take into account the potential desire to avoid psychological costs from being tempted. Assuming risk aversion does not change our conclusion, though it suggests that pessimism in expected performance, rather than psychological cost, is the main driver of overcommitment. Our results suggest there is a need to reconsider the active promotion of commitment devices in situations where there is limited disutility from the tempting option.
    Keywords: Commitment device; Pessimism; Self-control
    JEL: C91 D03 D91
    Date: 2019–09
  5. By: Georges GALLAIS-HAMONNO; Christian RIETSCH
    Date: 2018
  6. By: George J. Mailath (Dept. of Economics, University of Pennsylvania); Larry Samuelson (Cowles Foundation, Yale University)
    Abstract: People reason about uncertainty with deliberately incomplete models, including only the most relevant variables. How do people hampered by different, incomplete views of the world learn from each other? We introduce a model of “model-based inference.” Model-based reasoners partition an otherwise hopelessly complex state space into a manageable model. We nd that unless the differences in agents’ models are trivial, interactions will often not lead agents to have common beliefs, and indeed the correct-model belief will typically lie outside the convex hull of the agents’ beliefs. However, if the agents’ models have enough in common, then interacting will lead agents to similar beliefs, even if their models also exhibit some bizarre idiosyncrasies and their information is widely dispersed.
    Keywords: Wisdom of the Crowd, Information aggregation, Common prior, NonBayesian updating
    JEL: D8
    Date: 2019–01
  7. By: Mejia, Carlos Alberto
    Abstract: El propósito de este documento de trabajo consiste en controvertir mediante el uso de evidencias documentales diversas críticas hechas en distintas épocas y lugares a la obra de Karl Marx, centrándose particularmente en la obra de Jon Elster, uno de sus críticos más incisivos. Partiendo de su consideración sobre lo que denomina oscurantismo en las Ciencias Sociales, el texto debate en torno de si el pensador de Tréveris desconocía las diferencias individuales en el proceso de trabajo, de si buena parte de su obra intenta explicar la existencia de la sociedad a partir del denominado determinismo tecnológico, presente en la exposición de sus teorías sobre el desarrollo de las fuerzas productivas y de la tecnología, de si Marx olvidó tratar el tema de la relación entre religión y capitalismo o si sus escritos eludieron la problemática de la acción colectiva de los empresarios y los capitalistas. El texto intenta arrojar alguna luz sobre el tema.
    Keywords: Marx, trabajo, tecnología
    Date: 2019–08–30
  8. By: Bindseil, Ulrich
    Abstract: In some recent studies, the question of the origins of central banking has been revisited, suggesting that beyond Swedish and British central banking, a number of earlier European continental institutions would also have played an important role. However, it has often been difficult to access the charters and regulations of these early central banks – in particular in English. This paper contributes to closing this gap by introducing and providing translations of some charters and regulations of six pre 1800 central banks in France and Germany. The six early public banks displayed varying levels of success and duration, and qualify to a different degree as central banks. An overview table maps the articles of the early central banks’ charters and regulations into key central banking topics. The texts also provide evidence of the role of central banking legislation, and of the distinction between, on the one side, the statutes and charters of the banks, and on the other side the operational aspects which tend to be framed by separate rules and regulations. Finally, the texts provide evidence of the policy objectives of early central banks, including in particular those of a monetary nature. To put these documents into context, the objectives, balance sheet structure, achievements and closure of each central bank are briefly summarised. JEL Classification: E32, E5, N23
    Keywords: central bank governance, central bank mandates, central bank operations, central bank regulations, origins of central banking
    Date: 2019–09
  9. By: William Easterly
    Abstract: The lack of growth response to “Washington Consensus” policy reforms in the 1980s and 1990s led to widespread doubts about the value of such reforms. This paper updates these stylized facts by analyzing moderate to extreme levels of inflation, black market premiums, currency overvaluation, negative real interest rates and abnormally low trade shares to GDP. It finds three new stylized facts: (1) policy outcomes worldwide have improved a lot since the 1990s, (2) improvements in policy outcomes and improvements in growth across countries are correlated with each other (3) growth has been good after reform in Africa and Latin America, in contrast to the “lost decades” of the 80s and 90s. This paper makes no claims about causality. However, if the old stylized facts on disappointing growth accompanying reforms led to doubts about economic reforms, new stylized facts should lead to some positive updating of such beliefs.
    JEL: O1 O4 O47
    Date: 2019–09

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.