nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2020‒04‒20
fifteen papers chosen by
Erik Thomson
University of Manitoba

  1. A propos des fondements éthiques de la critique du capitalisme par Marx By Fabien Tarrit
  2. Pluralismus in der Ökonomik - verpasste Chance, überfälliges Programm oder normalwissenschaftliche Realität? By Quaas, Friedrun
  3. A Short History of Macro-econometric Modelling By David F. Hendry
  4. The Incubator of Human Capital: The NBER and the Rise of the Human Capital Paradigm By Claudia Goldin; Lawrence F. Katz
  5. The Economics of Tobacco Regulation: A Comprehensive Review By Philip DeCicca; Donald S. Kenkel; Michael F. Lovenheim
  6. Cognitive Biases: Mistakes or Missing Stakes? By Benjamin Enke; Uri Gneezy; Brian Hall; David Martin; Vadim Nelidov; Theo Offerman; Jeroen van de Ven
  7. A Comprehensive History of Regression Discontinuity Designs: An Empirical Survey of the last 60 Years By Mauricio Villamizar-Villegas; Freddy A. Pinzón-Puerto; María Alejandra Ruiz-Sánchez
  8. On treatment of interests, profits and equilibrium non-existence in general equilibrium models By Icefield, William
  9. Applications of the Coase Theorem By Tatyana Deryugina; Frances C. Moore; Richard S.J. Tol
  10. Classifying Economics for the Common Good: Connecting Sustainable Development Goals to JEL Codes By Heikkilä, Jussi
  11. Off to a Good Start: The NBER and the Measurement of National Income By Hugh Rockoff
  12. The role of values for social cohesion: Theoretical explication and empirical exploration By Nowack, Daniel; Schoderer, Sophia
  13. History of Utility Theory By Ivan Moscati
  14. Going beyond GDP with a parsimonious indicator: Inequality-adjusted healthy lifetime income By Bloom, David E.; Fan, Victoria Y.; Kufenko, Vadim; Ogbuoji, Osondu; Prettner, Klaus; Yamey, Gavin
  15. Identity, Religion, and the State: the Origin of Theocracy By Metin M. Cosgel; Richard N. Langlois; Thomas J. Miceli

  1. By: Fabien Tarrit (REGARDS - Recherches en Économie Gestion AgroRessources Durabilité Santé- EA 6292 - URCA - Université de Reims Champagne-Ardenne)
    Abstract: The present paper questions the relation between Marx's theory and the issues of social justice. We first introduce an interpretation claiming that a theory of justice in itself is useless because idealist. We compare it with an interpretation for which founding a critique of capitalism on standards of justice allows to avoid an economist failure which denies individuality.
    Abstract: La présente contribution interroge le rapport de la théorie de Marx aux problématiques en termes de justice sociale. Nous proposons une interprétation selon laquelle une théorie de la justice en soi est inutile car idéaliste. Nous la confrontons à une lecture qui implique qu'une critique du capitalisme fondée sur des critères de justice est nécessaire afin d'éviter l'écueil économiste niant l'individualité. Abstract This paper questions the relation between Marx's theory and the issues of social justice. We first introduce an interpretation claiming that a theory of justice in itself is useless because it is idealist. We compare it with an interpretation that implies that a critique of capitalism based on standards of justice allows to avoid the economic pitfall which denies individuality.
    Keywords: Mots-clefs : Justice,matérialisme historique,liberté réelle,exploitation Keywords : Justice,Superstructure,Historical Materialism,Real Freedom,Exploitation Classification JEL : A13
    Date: 2020
  2. By: Quaas, Friedrun
    Keywords: Pluralismusdebatte,Monismus,Orthodoxie,Heterodoxie,Mainstream,Neoklassik,Kritischer Rationalismus,Kritischer Realismus,Pluralism,Monism,Orthodoxy,Heterodoxy,Mainstream Economics,Neoclassical Economics,CriticalRationalism,Critical Realism
    JEL: B13 B25 B41 B50 B53
    Date: 2020
  3. By: David F. Hendry (Climate Econometrics, Nuffield College, University of Oxford)
    Abstract: The key stages in the development of empirical macro-econometric model building are briefly described. Essential steps included characterizing the economy as a system, collating aggregate macroeconomic time series on prices and quantities, isolating the many interacting concepts necessary for understanding how to empirically model economies, inventing viable methods of estimation and inference for dynamic systems, developing hardware and software calculating devices to make such approaches operational, then combining all of these to implement empirical macro-econometric modelling, forecasting and policy making. Its history is littered with both successes and failures, leading overall to substantive progress in understanding, but highlighting the roles of fashions in economic theory dominating empirical evidence and the pernicious impacts of location shifts causing forecast failures and entailing theory failures.
    Keywords: History of Macroeconomic Modelling; Macro-econometric models; National Accounts; Forecasting, Economic policy
    JEL: B22 B23
    Date: 2020–01–20
  4. By: Claudia Goldin; Lawrence F. Katz
    Abstract: The human capital construct is deep in the bones of economics and finds reference by many classical economists, even if they did not use the phrase. The term “human capital,” seldom mentioned in economics before the 1950s, increased starting in the 1960s and blossomed in the 1990s. The upsurge in NBER publications was even greater. Using EconLit codes from 1990 to 2019, the use of human capital among NBER books increased from 5% to 25%, whereas all economics books changed from 3% to 6%. For NBER working papers, 3% referenced human capital around 1990, but 10% have more recently. The figures for all economics articles are 4% and 6%. The NBER played an outsized role in the rise of the concept of human capital mainly because of the emphasis on empiricism at the NBER. We explore how the NBER was an incubator of human capital research and the ways human capital theory brought the NBER into the modern era of economics.
    JEL: B0 J24
    Date: 2020–03
  5. By: Philip DeCicca; Donald S. Kenkel; Michael F. Lovenheim
    Abstract: Tobacco regulation has been a major component of health policy in the developed world since the UK’s Royal College of Physicians’ and the U.S. Surgeon General’s reports in the 1960s. Such regulation, which has intensified in the past two decades, includes cigarette taxation, place-based smoking bans in areas ranging from bars and restaurants to workplaces, and regulations designed to make tobacco products less desirable. More recently, the availability of alternative products, most notably e-cigarettes, has increased dramatically, and these products are just starting to be regulated. Despite an extensive body of research on tobacco regulations, there remains substantial debate regarding their effectiveness, and ultimately, their impact on economic welfare. We provide the first comprehensive review of the state of research in the economics of tobacco regulation in two decades.
    JEL: I12 I18 K32
    Date: 2020–04
  6. By: Benjamin Enke; Uri Gneezy; Brian Hall; David Martin; Vadim Nelidov; Theo Offerman; Jeroen van de Ven
    Abstract: Despite decades of research on heuristics and biases, empirical evidence on the effect of large incentives – as present in relevant economic decisions – on cognitive biases is scant. This paper tests the effect of incentives on four widely documented biases: base rate neglect, anchoring, failure of contingent thinking, and intuitive reasoning in the Cognitive Reflection Test. In pre-registered laboratory experiments with 1,236 college students in Nairobi, we implement three incentive levels: no incentives, standard lab payments, and very high incentives that increase the stakes by a factor of 100 to more than a monthly income. We find that cognitive effort as measured by response times increases by 40% with very high stakes. Performance, on the other hand, improves very mildly or not at all as incentives increase, with the largest improvements due to a reduced reliance on intuitions. In none of the tasks are very high stakes sufficient to de-bias participants, or come even close to doing so. These results contrast with expert predictions that forecast larger performance improvements.
    Keywords: cognitive biases, incentives
    JEL: D01
    Date: 2020
  7. By: Mauricio Villamizar-Villegas (Banco de la República de Colombia); Freddy A. Pinzón-Puerto; María Alejandra Ruiz-Sánchez
    Abstract: In this paper we detail the entire Regression Discontinuity Design (RDD) history, including its origins in the 1960’s, and its two main waves of formalization in the 1970’s and 2000’s, both of which are rarely acknowledged in the literature. Also, we dissect the empirical work into fuzzy and sharp designs and provide some intuition as to why some rule-based criteria produce imperfect compliance. Finally, we break the literature down by economic field, highlighting the main outcomes, treatments, and running variables employed. Overall, we see some topics in economics gaining importance through time, like the cases of: health, finance, crime, environment, and political economy. In particular, we highlight applications in finance as the most novel. Nonetheless, we recognize that the field of education stands out as the uncontested RDD champion through time, with the greatest number of empirical applications. **** RESUMEN: En este artículo detallamos toda la historia sobre el Diseño de Regresiones Discontinuas (RDD), incluyendo sus orígenes en los 60s, y sus dos olas principales de formalización en los años 70s y 00s, las cuales rara vez son reconocidas en la literatura. Además, diferenciamos el trabajo empírico en diseños difusos y nítidos, y proporcionamos cierta intuición de por qué algunos criterios basados en reglas producen asignación imperfecta. Finalmente, desglosamos la literatura por campo económico, destacando los principales resultados, tratamientos y variables de asignación empleadas. En general, vemos algunos temas en economía que cobran importancia a través del tiempo, como los casos de: salud, finanzas, crimen, medio ambiente y política económica. En particular, destacamos las aplicaciones en finanzas como las más novedosas. No obstante, reconocemos que el campo de la educación se destaca como el campeón indiscutible de RDD a través del tiempo, con el mayor número de aplicaciones empíricas.
    Keywords: Regression Discontinuity Design, Fuzzy and Sharp Designs, Empirical Survey, RDD Formalization, Regresión Discontinua, Diseño Nítido y Borroso, Formalización de RDD
    JEL: B23 C14 C21 C31 C52
    Date: 2020–04
  8. By: Icefield, William
    Abstract: It is sometimes argued that one cannot criticize general equilibrium models on grounds of equilibrium non-existence. I argue that once problematic treatments of interests and profits in general equilibrium models are corrected, equilibrium non-existence issues arise again. Uniform rate of interest and zero economic profit of firms must hold after corrections, which allow equilibrium existence for only restricted circumstances. This demonstrates ongoing relevance of the Cambridge capital controversies.
    Keywords: Cambridge capital controversies; general equilibrium; uniform rate of interest; zero economic profit; equilibrium existence
    JEL: B22 D50 E12 E13
    Date: 2020–01–22
  9. By: Tatyana Deryugina (Center for Business and Public Policy, College of Business, University of Illinois at Urbana-Champaign); Frances C. Moore (Environmental Science and Policy, University of California Davis); Richard S.J. Tol (Department of Economics, University of Sussex, Falmer, United Kingdom)
    Abstract: The Coase Theorem has a central place in the theory of environmental economics and regulation. But its applicability for solving real-world externality problems remains debated. In this paper, we first place this seminal contribution in its historical context. We then survey the experimental literature that has tested the importance of the many, often tacit assumptions in the Coase Theorem in the laboratory. We discuss a selection of applications of the Coase Theorem to actual environmental problems, distinguishing between situations in which the polluter or the pollutee pays. While limited in scope, Coasian bargaining over externalities offers a pragmatic solution to problems that are difficult to solve in any other way.
    Keywords: Coase Theorem, externalities, property rights, bargaining
    JEL: C78 H23 Q50
    Date: 2020–04
  10. By: Heikkilä, Jussi
    Abstract: How does economics research help in solving societal challenges? This brief note sheds additional light on this question by providing ways to connect Journal of Economic Literature (JEL) codes and Sustainable Development Goals (SDGs) of the United Nations. These simple linkages illustrate that the themes of SDGs have corresponding JEL classification codes. As the mappings presented here are necessarily imperfect and incomplete, there is plenty of room for improvements. In an ideal world, there would be a JEL classification system for SDGs, a separate JEL code for each of the 17 SDGs.
    Keywords: JEL codes; social development goals; Agenda 2030; keyword search
    JEL: A11 O20 Q01
    Date: 2020–04–05
  11. By: Hugh Rockoff
    Abstract: The creation of the National Bureau of Economic Research was a response to the bitter controversies over the distribution of income that roiled the United States during the Progressive Era. Thanks to Malcolm Rorty, a business economist, and Nahum I. Stone, an independent socialist economist, a “Committee on the Distribution of Income” was created; what might be considered the first name of the Bureau. Funding was secured, the Bureau was chartered in 1920, and Wesley Mitchell was appointed the director of research. The Bureau’s first publication, Income in the United States, its Amount and Distribution was widely hailed as a major contribution. Further estimates of national income and its distribution for the 1920s were made by Willford King and Lillian Epstein. The Great Depression led to legislation requiring federal government estimates. Simon Kuznets was seconded from the Bureau to the Commerce Department where he led the team that produced the first federal estimates and established the unit for producing updates. The early investigators at the Bureau proved to be masters of combining sources of data to produce credible estimates. The result was estimates that still underlie our understanding of the growth and fluctuations of the American Economy.
    JEL: B0 N12
    Date: 2020–03
  12. By: Nowack, Daniel; Schoderer, Sophia
    Abstract: Shared values are deemed necessary as a solid foundation for social cohesion by commentators and observers in many countries. However, when examining what kind of values this is based on, answers often come down to platitudes and national clichés. This discussion paper offers some clarification through both a theoretical explication and an empirical exploration concerning the general role of values for social cohesion. Values are notions about desirable, trans-situational end-states and behaviours. They fall into two categories, individual and societal values. We provide a critical discussion of the most prominent conceptualisations and their operationalisation in the social sciences. Values affect social cohesion in three possible pathways: First, when they are shared; second, when they promote behaviour per se conducive to social cohesion and third, through their effect on policy choice and institutional design. We review evidence provided by the research literature for each of these pathways. We further explore the third pathway by deriving from the research literature the conjecture that a cultural value emphasis on egalitarianism makes a universalistic scope of welfare institutions more likely, which in turn increases social and political trust. We first examine this conjecture with a series of regression models, and then run a mediation analysis. The results show that (1.) egalitarian values are moderately strongly and positively linked to universalistic welfare institutions, but that (2.) welfare institutions mediate the association of egalitarian values with social trust only to a small extent and that (3.) more universalistic welfare institutions counteract a negative association between egalitarian values and institutional trust.
    Date: 2020
  13. By: Ivan Moscati
    Date: 2019
  14. By: Bloom, David E.; Fan, Victoria Y.; Kufenko, Vadim; Ogbuoji, Osondu; Prettner, Klaus; Yamey, Gavin
    Abstract: Per capita GDP has limited use as a well-being indicator because it does not capture many dimensions that imply a "good life," such as health and equality of opportunity. However, per capita GDP has the virtues of easy interpretation and can be calculated with manageable data requirements. Against this backdrop, a need exists for a measure of well-being that preserves the advantages of per capita GDP, but also includes health and equality. We propose a new parsimonious indicator to fill this gap and calculate it for 149 countries.
    Keywords: Beyond GDP,Well-Being,Health,Inequality,Human Development,Lifetime Income
    JEL: I31 I15 D63 O10 E01
    Date: 2020
  15. By: Metin M. Cosgel (University of Connecticut); Richard N. Langlois (University of Connecticut); Thomas J. Miceli (University of Connecticut)
    Abstract: Why do states become theocracies? Johnson and Koyama (2019) analyzed the transition from a conditional-toleration equilibrium, in which feeble state capacity allows distinct religious groups to co-exist under a system of religion-based identity rules, to a religious-toleration equilibrium, in which a strong state applies secular general rules without the need for religion as a legitimizing force. This implies that religious legitimacy and state capacity are substitutes. We explore the alternative possibility that religious legitimacy and state capacity can be complements; that is, religion and state capacity work together to extract resources from the citizenry. The result is an equilibrium of religious rather than secular general rules in which state capacity and religion reinforce each other—a theocracy. Using a unique data set of world polities and religion since the year 1000, we confirm that religious general rules tend to be more prevalent in societies in which religion complements the state.
    Keywords: Theocracy, state capacity, religious tolerance, rent seeking
    JEL: D72 H11 H26 Z12
    Date: 2020–04

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