nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2019‒12‒23
twelve papers chosen by
Erik Thomson
University of Manitoba

  1. “Truly, Much Can Be Done”: Cooperative Economics from the Book of Acts to Pope Francis By Schneider, Nathan
  2. Macroeconomics at the Crossroads: Stagflation and the Struggle between "Keynesian" and New Classical Macroeconometric Programs By Goutsmedt, Aurélien
  3. Irving Fisher, Ragnar Frisch and the Elusive Quest for Measurable Utility By Robert W. Dimand
  4. Reacting to the Lucas Critique: The Keynesians' Replies By Goutsmedt, Aurélien; Pinzón-Fuchs, Erich; Sergi, Francesco; Renault, Matthieu
  5. An Agenda without a Plan: Robert E. Lucas's Trajectory throught the Public Debate By Goutsmedt, Aurélien; Sergi, Francesco; Guizzo, Danielle
  6. Present and future of evolutionary economics: post-institutionalist’s opinion By Frolov, Daniil
  7. Thomas Sargent face à Robert Lucas: une autre ambition pour la Nouvelle Economie Classique By Goutsmedt, Aurélien
  8. À propos de l’ouvrage de John E. King : Post Keynesian Economics By Bruno Tinel
  9. Development and progress: the myth of a moral ideal By Alba Moreira Pinargote
  10. Instabilité démocratique et économie : une relecture historique et méthodologique de la théorie électorale de Downs. By Julien Grandjean
  11. Complexity, the Evolution of Macroeconomic Thought, and Micro Foundations By David Colander
  12. Are Central Banks' Research Teams Fragile Because of Groupthink? By Jakub Rybacki

  1. By: Schneider, Nathan (University of Colorado Boulder)
    Abstract: for Care for the World: Laudato Si’ and Catholic Social Thought in an Era of Climate Crisis, edited by Frank Pasquale (Cambridge University Press, 2019) At several key moments in Laudato Si’, Pope Francis makes passing reference to cooperative economics – when speaking of a more human relationship with technology, for instance, and in relation to sustainable energy production. Reading these in light of his past statements on economic cooperation, it is evident that “cooperative,” for him, is no vague nicety; rather, he is referring to a robust tradition of Catholic economic thought grounded in distributed ownership of the means of production and the precedence of persons over capital. This essay reviews the contours of the tradition that the pope is referring to, beginning with his own past statements on cooperative enterprise. It considers the foundations in biblical narratives of the early church; notions of the commons in early canon law; economic practices in monastic cultures; Catholic leadership in the emergence of modern cooperation; and the current, complex interactions between Catholic thought and the secular resurgence of cooperative economics. In addition to tying together historical threads, it draws from reporting on contemporary cooperative enterprise and on Francis’s pre-papal history with cooperativism in Argentina. Cooperative economics is a central yet under-appreciated backdrop to what the pope attempted to accomplish in Laudato Si’, and a vital component of the hope for “integral ecology” that he envisions.
    Date: 2019–02–26
  2. By: Goutsmedt, Aurélien (Duke University)
    Abstract: Lucas and Sargent’s “After Keynesian Macroeconomics” is considered as a cornerstone of macroeconomics history and is supposed to have seriously undermined “Keynesian” approach to macroeconometric modelling. I study the context of this article, its writing, its presentation in a conference with many advocates of large-scale models and the debates that followed. I demonstrate that the issue of stagflation was closely linked to Lucas and Sargent’s argument, and the opposition of “Keynesians” relied on their different interpretation of stagflation. I show this interpretation of stagflation led to a different research program, which has been overlooked by history of macroeconomics.
    Date: 2019–02–28
  3. By: Robert W. Dimand (Department of Economics, Brock University)
    Abstract: Commitment to the behaviorist approach to utility theory, to the usefulness of mathematics in economic analysis and to equalization of the marginal utility of income as a principle of just taxation brought Irving Fisher and Ragnar Frisch to attempt to measure the marginal utility of income, and led them to collaborate in forming the Econometric Society and sponsoring the establishment of the Cowles Commission, institutions advancing economic theory in connection to mathematics and statistics. To be presented at a symposium at the University of Oslo, December 3, 2019, honoring the 50th anniversary of the award to Ragnar Frisch of the Royal Bank of Sweden Prize in Economic Science in Memory of Alfred Nobel and the 30th anniversary of the award of that prize to Trygve Haavelmo.
    Keywords: Irving Fisher, Ragnar Frisch, Measurable utility, Axiomatic approach to utility
    JEL: B1 B23 B31
    Date: 2019–11
  4. By: Goutsmedt, Aurélien (Duke University); Pinzón-Fuchs, Erich (Université Paris 1 Panthéon-Sorbonne); Sergi, Francesco; Renault, Matthieu
    Abstract: In 1976, Robert Lucas explicitly criticized Keynesian macroeconometric models for their inability to correctly predict the effects of alternative economic policies. Today, most contemporary macroeconomists and some historians of economics consider that the Lucas’s critique led forcefully to immediate disqualification of the Keynesian macroeconometric approach. This narrative is based on the interpretation of the Lucas Critique as a fundamental principle for economic reasoning that was (and still is) logically unquestionable. We consider that this narrative is problematic both in terms of historiography and of the effects that it can have in the field as a way of assigning importance and credit to particular macroeconomists. Indeed, the point of view of the Keynesian economists is missing despite the fact that they were the target of Lucas’s paper and that throughout the 1970s and 1980s they produced a fierce reaction against it. In this paper, we analyze the reactions by a broad set of authors (that we label as “Keynesians”) that disputed the relevance of the critique. In spite of their diversity in methodological, theoretical, and policy issues, these reactions were characterized by their common questioning of the empirical and practical relevance of the Lucas critique.
    Date: 2019–02–28
  5. By: Goutsmedt, Aurélien (Duke University); Sergi, Francesco; Guizzo, Danielle
    Abstract: This article explores Robert E. Lucas’s policy agenda and his engagement with the public debate between 1968 and 1987. It investigates how he interacted with the public debate by envisioning key principles of his macroeconomic theory and methodology, and how he promoted his policy agenda. An exploration of Lucas’s personal and professional archives sheds light on his participation in policy debates after the publication of his works, illustrating how Lucas built a discreet and cautious way of engaging with the public. Lucas did not envision an action plan, nor proposed a detailed program to implement his policy agenda. The article suggests that Lucas’s originality compared to his contemporaries was his belief on the ability of macroeconomics to scientifically devise binding policy rules that could be integrated in an economic constitution.
    Date: 2019–02–28
  6. By: Frolov, Daniil
    Abstract: Modern evolutionary economics is in the ripening phase and at the same time demonstrates clear signs of an internal crisis. Having become one of the main pillars of economic heterodoxy, this scientific community still does not have a common methodological framework, an agreed research program and a system of normative settings. Indirectly responding to this crisis, a group of leading evolutionists led by Richard Nelson in the book «Modern Evolutionary Economics: An Overview» (2018) suggests moving from direct competition with the neoclassical mainstream to a compromise solution. The compromise is to complement neoclassicism with implicit evolutionary thinking, i.e. adoption of the thesis “history matters” as the basic premise of analysis, even when studying economic phenomena in statics. Similar crisis processes (and attempts at compromise solutions) are now observed in neoinstitutional theory - the mainstream of modern institutionalism - especially in the field of studying the evolution of institutions. The author, as a representative of post-institutionalism, argues that these crises are based on the exhaustion of the potential of the neo-Darwinist paradigm as a source of conceptual metaphors for studies of the economic and social evolution. Overcoming the paradigmal crisis requires going beyond the prevailing (and already dogmatized) metaphors. The necessary conditions have formed for this step: a paradigm shift is taking place in modern biological science - an extended evolutionary synthesis is taking the place of neo-Darwinism, the «core» of which is evolutionary developmental biology (Evo-Devo). In this regard, evolutionary economists have the opportunity to update the basic methodological «settings» by moving from neo-Darwinist metaphors to metaphors of the Evo-Devo. The article presents three complex priority tasks related to the implementation of the Evo-Devo paradigm. First, the rejection of any version of reductionism, in particular from mono-aspect, monocausal and dichotomous thinking. Secondly, the rejection of the optimization and dysfunctional approaches with the transition to bricolage thinking, based on a positive perception of the organic imperfection of economic institutions, mechanisms and systems. Thirdly, the addition of the traditional systemic approach to assemblage thinking with an emphasis on hybrid systems, the multiplicity of their logics and the inevitability of their conflicts. It is shown that the Evo-Devo paradigm allows a more adequate explanation of the evolution of the irreducible complexity of economic systems
    Keywords: economic evolution; institutions; complexity; evolutionary economics; institutional economics; methodology
    JEL: A14 B41 B52
    Date: 2019–09–24
  7. By: Goutsmedt, Aurélien (Duke University)
    Abstract: L’article montre que la vision de la macroéconomie de Sargent contraste d'avec celle de Lucas. Pour Lucas, les hypothèses d'un modèle sont « a-réalistes », le modèle ne vise pas à représenter la réalité. Il est un outil de simulation qui doit permettre de simuler différentes politiques économiques. L'idéal « lucassien » est celui d'un macroéconomiste qui a donc vocation à devenir un ingénieur chargé de fournir un « logiciel de politiques économiques » aux autorités publiques, logiciel qu'il manipule afin d'aiguiller les choix de politiques sur une base scientifique. Sargent, quant à lui, considère que pour suppléer le paradigme keynésien, la nouvelle économie classique doit être capable de remplir les mêmes tâches, et l'une de ces tâches est de conseiller le pouvoir en lui fournissant une grille de lecture des phénomènes économiques et des outils intuitifs pour débattre des politiques économiques à mettre en place. Sargent cherche à appliquer ce qu'il nomme la théorie des anticipations rationnelles à un ensemble de cas concrets (stabilisation Poincaré, hyperinflation allemande, politique de Thatcher et Reagan) pour montrer la pertinence de ce cadre d'analyse pour penser les problèmes économiques contemporains.
    Date: 2019–02–28
  8. By: Bruno Tinel (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Ce livre de 138 pages (index compris) est publié dans la série « Elgar Advanced Introductions »1 il s'agit d'une présentation spécialisée de l'économie post-keynésienne. Il ne s'adresse pas aux néophytes. Ceux qui, à l'instar des étudiants de master, ont déjà une petite idée des clivages centraux qui existent dans l'analyse économique, et tout particulièrement en macro-économie, trouveront dans ce livre une synthèse bien utile qui peut leur apporter de nombreux points de repère car il dresse un inventaire très construit des thèmes essentiels et des questions qui font débat au sein du courant post-keynésien aujourd'hui.
    Date: 2018
  9. By: Alba Moreira Pinargote (Universidad de Cantabria [Santander])
    Abstract: Briefly tracing the main critical theories around the development and progress paradigm allow us to focus attention on questions such as what does it mean to live in development? Why is it necessary to develop and to what extent? How is development achieved? The conceptual approach draws the key lines for the understanding of the hegemonic discourse established in the collective imaginary as a moral ideal in the economic, social and political configuration of societies, as a concept, theory and practice. Concepts understood as inevitable ideals of any traditional society towards a superior. This theoretical review is part of the ongoing doctoral research project entitled «Montuvias. A decolonial feminist look at the development / progress paradigm in Ecuador», so a brief conceptual description of the gender perspective in development is also made.
    Abstract: Rastrear brevemente las principales teorías críticas en torno al paradigma de desarrollo y progreso permiten centrar la atención en cuestionamientos tales como ¿qué significa vivir en desarrollo?, ¿por qué es necesario desarrollarse y en qué medida?, ¿cómo se consigue el desarrollo? La aproximación conceptual traza las líneas claves para la comprensión del discurso hegemónico instaurado en el imaginario colectivo como un ideal moral en la configuración económica, social y política de las sociedades, como concepto, teoría y práctica. Conceptos entendidos como ideales inevitables de toda sociedad tradicional hacia una superior. Esta revisión teórica hace parte del proyecto de investigación doctoral en curso titulado «Montuvias. Una mirada feminista decolonial al paradigma de desarrollo/progreso en el Ecuador», por lo que también se realiza una breve descripción conceptual de la perspectiva de género en el desarrollo.
    Keywords: Third World,Gender,Miscegenation,Coloniality,Tercer Mundo,Género,Mestizaje,Colonialidad
    Date: 2019–10–28
  10. By: Julien Grandjean
    Abstract: L’objet de cet article est de proposer une relecture de l’ouvrage d’Anthony Downs (1957), Une théorie économique de la démocratie, contribution fondatrice pour l’analyse économique du politique. En particulier, cette relecture a pour but de montrer de quelle façon le modèle déployé par Downs permet de révéler différentes contradictions du système électoral démocratique. Nous montrerons ainsi que l’ensemble de l’ouvrage est traversé par une thématique fondamentale qui est celle de l’instabilité de la démocratie. L’une des originalités sur laquelle nous insisterons est le fait que, chez Downs, c’est par le biais de l’incertitude et des mécanismes sociaux qui sont utilisés par les acteurs politiques pour y faire face – au premier rang desquels l’idéologie – que la démocratie se trouve stabilisée. Mais cette stabilité a un prix qui est celui de la rationalité dégradée.
    Keywords: Anthony Downs, instabilité, démocratie, élections, information, idéologie.
    JEL: B21 B41 D72 D81
    Date: 2019
  11. By: David Colander (Middlebury College)
    Date: 2019–12
  12. By: Jakub Rybacki
    Abstract: In the recent years, the great majority of central banks have globally failed to realize inflation targets. We attempt to answer a question of whether such failure resulted from insufficient organization of economic research in those institutions. Our study shows a positive, but statistically weak, relationship between these issues. However, the analysis finds also a few adverse irregularities in major central banks' research organizations. The research of the European Central Bank, Bundesbank, and the Bank of England are relatively less diversified compared to the U.S. Federal Reserve. In the cases of Poland and Italy, economic departments are dominated by groups of researchers focused on narrow topics. On the other hand, the organization of research departments in France and Canada support a greater variety of topics and independence of researchers.
    Keywords: groupthink, network analysis, central banks, big data
    JEL: E58 D02 I23
    Date: 2019–12

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