nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2020‒07‒27
thirteen papers chosen by
Erik Thomson
University of Manitoba

  1. Bentham and Ricardo's rendez-vous manqués By Christophe Depoortère; André Lapidus; Nathalie Sigot
  2. The Role of Sentiment in the Economy of the 1920s By Ali Kabiri; Harold James; John Landon-Lane; David Tuckett; Rickard Nyman
  3. On the controversy over the origins of the Chicago Plan for 100 percent reserves By George S. Tavlas
  4. European Economics and the Early Years of the "International Seminar on Macroeconomics" By Aurélien Goutsmedt; Matthieu Renault; Francesco Sergi
  5. Protection of Non-Property Right By Michail Khomenko; Anatoliy Kostruba; Oleksiy Kot
  6. Journal of the History of Economic Thought Preprints – A Win-Win Model of Development: How Indian Economics Redefined Universal Development from and at the Margins By Bach, Maria
  7. Can Lessons from the Great Recession Guide Policy Responses to the Pandemic-Driven Economic Crisis? By Jane Oates; Carl Van Horn
  8. Tote durch Tabus: Ordonomische Beobachtungen und Reflexionen zu Moral und Ethik in der Corona-Krise By Pies, Ingo
  9. Theory to the Rescue of Large-scale Models: Edmond Malinvaud's Alternative View on the Search for Microfoundations By Matthieu Renault
  10. Book Review: The Birth of Economic Rhetoric: communication, arts and economic stimulus in David Hume and Adam Smith. By Estrella Trincado By Paganelli, Maria Pia
  11. General Considerations on Institutional Change: A Reading of D. North and R. Boyer By Bellal Samir
  12. Michael Polanyi on Creativity in Science By Agnès Festré; Stein Østbye
  13. How novel is Transformative Innovation Policy? By Grillitsch, Markus; Hansen, Teis; Madsen, Stine

  1. By: Christophe Depoortère (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis); André Lapidus (PHARE - Philosophie, Histoire et Analyse des Représentations Économiques - UP1 - Université Panthéon-Sorbonne); Nathalie Sigot (PHARE - Philosophie, Histoire et Analyse des Représentations Economiques - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne)
    Abstract: This paper discusses the possibility, often alleged and widely accepted, that Bentham had an influence on the development of Ricardo's economics. Three possible points of contact have been mooted, the first mediated by the key figure of James Mill, the other two being unmediated reactions to their respective works, Bentham's Sur les prix and Ricardo's Essay on Profits. Yet, we argue, none of these claims for influence have firm foundations. Regarding the first proposed rendez vous, we show that (i) if Mill had an influence on Ricardo at the beginning of their friendship (say, around 1808), he was at this time Stewartian and not yet Benthamian; and (ii) if this influence is supposed to have been exerted later, it is clear from Ricardo's own comments that he was not convinced by a basic component of utilitarianism to which Mill made a major contribution-associationism. The second rendezvous manqué turns on Ricardo's reading of Bentham's manuscript Sur les prix: we show that (i) this reading could not have exerted an influence on Ricardo's monetary thought at an early stage-that is, before his first monetary writings-and (ii) that Ricardo expressed such disagreement with it that any influence from it on his views about money is inconceivable. The third rendez-vous was also manqué: commenting on Ricardo's Essay, Bentham accused him of confusing "cost" and "value": we examine this criticism by putting to the fore the different aims of both authors, related to their explanations of, respectively, inflation and the evolution of distribution, and their different conceptions of price.
    Keywords: Bentham,Ricardo,James Mill,utilitarianism,foundations of Ricardian economics
    Date: 2020
  2. By: Ali Kabiri; Harold James; John Landon-Lane; David Tuckett; Rickard Nyman
    Abstract: John Maynard Keynes composed The General Theory as a response to the Great Crash and Great Depression with all their devastating consequences for the US macro economy and financial markets, as well as the rest of the world. The role of expectations his new theory set out has been widely accepted. The role of “animal spirits” he proscribed (i.e. the role of emotion in cognition) has remained much more controversial. We analyse over two million digitally stored news articles from The Wall St Journal to construct a sentiment series that we use to measure the role of emotion at the time Keynes wrote. An eight variable vector error correction model is then used to identify shocks to sentiment that are orthogonal to the fundamentals of the economy. We show that the identified “pure” sentiment shocks do have statistically and economically significant effects on output, money supply (M2), and the stock market for periods of the 1920s.
    Keywords: Great Depression, general theory, algorithmic text analysis, behavioural economics
    JEL: D89 E32 N10 N30
    Date: 2020
  3. By: George S. Tavlas (Bank of Greece)
    Abstract: The idea of 100 percent reserve requirements against demand deposits received a renewed impetus following the 2007-08 financial crisis. In 1933, a group of University of Chicago economists, led by Frank Knight and Henry Simons, circulated two memoranda that called for 100 percent reserve requirements. The idea became known as the Chicago Plan of Banking Reform. That same idea had been proposed in 1926 by Frederick Soddy, a Nobel Laureate in chemistry, in his book, Wealth, Virtual Wealth and Debt. Soddy claimed precedence, a claim that caught on. I provide evidence showing that Knight, and probably Simons, conceived the idea of 100 percent reserves prior to the publication of Soddy’s 1926 book. By 1934, however, Simons raised concerns that 100 percent reserves would not be sufficient in a world where financial markets could innovate around legal restrictions on banks.
    Keywords: 100 percent reserves; Chicago Plan; Frank Knight; Henry Simons; Frederick Soddy
    JEL: B22 E42
    Date: 2020–06
  4. By: Aurélien Goutsmedt (Université du Québec à Montréal - CIRST); Matthieu Renault (Université de Côte d'Azur; CNRS, GREDEG); Francesco Sergi (Université Paris Est Créteil - LIPHA)
    Abstract: The International Seminar on Macroeconomics (ISoM) is an annual conference, which was co-sponsored during 15 years (1978-1993) by the French EHESS and the NBER. This article uncovers the scientific and institutional dynamics unrolling from this cooperation. We argue that the ISoM contributed greatly to the making of a European network of economists sharing similar professional and intellectual standards: indeed, the Seminar gathered macroeconomists who were leading the development of this European network. We illustrate how the ISoM stood at the crossroad of two types of ‘internationalisation' of economics: the integration of European national communities and the process of ‘Americanisation' of economics. While existing literature on ‘internationalisation' focuses on the national level, our contribution investigates the European level. Moreover, we unveil how two research programmes in macroeconomics (namely the disequilibrium theory and large-scale macroeconometric modelling) played a significant role in this process.
    Keywords: International Seminar on Macroeconomics; National Bureau of Economic Research (NBER); Ecole des hautes études en sciences sociales (EHESS); Disequilibrium Theory; Large-Scale Macroeconometric Modelling
    JEL: A11 A14 B22 B30
    Date: 2020–06
  5. By: Michail Khomenko; Anatoliy Kostruba (Vasyl Stefanyk Precarpathian National University); Oleksiy Kot
    Abstract: In the modern world, the significance of non-property right is very high because they are preconditions of providing the real freedom of ownership, freedom of agreement, freedom of entrepreneurship and all other rights in the material sphere of society. The article studies characteristic features of personal non-property rights of individuals. The notion of personal non-property rights of individuals has been formulated taking into account the features of this group of subjective civil rights, as well as their purpose. The main issues to be addressed in the study are the clarification of the specifics (features) of the object of protection, as well as the peculiarities of the protection of the named rights, the jurisdictional and non-jurisdictional forms of protection of personal non-property rights that ensure the natural existence of an individual. In the article, the notions of personal nonmaterial benefit and personal non-property right have been formulated; the personal non-property rights, which provide the natural existence of an individual who is the object of protection, have been characterized in details; propositions regarding addressing certain legislative and practical gaps and contradictions have been presented. Also, the specific features and concepts of the protection of personal non-property rights that provide the natural existence of an individual have been determined.
    Keywords: Civil Law,personal non-property rights of individuals,features of personal non-property rights,moral damage,types of defense.,Protection of Rights,Procedure law
    Date: 2019–06–30
  6. By: Bach, Maria
    Abstract: In this article, I argue that looking at lesser known intellectuals can help history of economics uncover news ways of seeing the world. My focus is the beginnings of “Indian Economics” and its conceptualization of development. The Indian economists, despite their elite status in India, were from an imperial context where they were never considered economists. Studies throughout the 20th century continued to treat them only as nationalists, rarely as contributors to economic knowledge. My research gives agency to these economists. I show how the position of Indian Economics from the margins of discursive space offered a unique perspective that enabled it to discursively innovate at the margins of development discourse. Indian Economics redefined the concept of universality in the existing 19th century idea of development by rejecting the widely accepted comparative advantage model and assertion that progress originated in Europe. Moreover, the economists pushed for universal industrialization, even for imperial territories, arguing that universal progress was beneficial to all.
    Date: 2020–06–17
  7. By: Jane Oates; Carl Van Horn
    Abstract: In a 1948 speech to the British House of Commons, Winston Churchill warned, "Those who fail to learn from history are condemned to repeat it." As the U.S. economy struggles to reopen safely and recover, what are the lessons from the Great Recession that might help guide how policymakers respond to the pandemic-driven economic crisis?1 What should we expect over the coming months and years as the nation struggles to restore its economy, which before the pandemic had finally achieved historically low unemployment levels? In June 2020, there is much that we do not know or would even attempt to predict. However, it is not too early to consider how our nation could respond to the crisis and how to avoid repeating the shortcomings of policy responses during and after the Great Recession.
    Keywords: Great Recession; coronavirus
    JEL: F62
    Date: 2020–06–16
  8. By: Pies, Ingo
    Abstract: Aus der Perspektive des ordonomischen Forschungsprogramms wird auf das empirische Faktum hingewiesen, dass trotz einer globalen Pandemie bislang keine abgestimmte Weltinnenpolitik zu beobachten war. Sodann werden Reflexionen zu Moral und Ethik in der Corona-Krise entwickelt, die schließlich in Anregungen münden, wie man das Risikomanagement der Weltgesellschaft zukünftig verbessern könnte.
    Keywords: Ordonomik,Diskursversagen,Ambivalenz der Moral,Weltinnenpolitik,Ordnungsethik,Corona,Ordonomics,Discourse Failure,Ambivalence of Morality,World Domestic Politics,Order Ethics
    Date: 2020
  9. By: Matthieu Renault (Université de Côte d'Azur; CNRS, GREDEG)
    Abstract: As a complement to Hoover (2012), this paper addresses the compatibility between the “General Equilibrium†(in particular, the disequilibrium theory†) and the “Aggregation†(i.e. large-scale models) microfoundational programs in the search for microfoundations in macroeconomics. For this purpose, Edmond Malinvaud is an interesting case, for he committed to both microfoundational programs and used to regard them as compatible. This paper brings such compatibility to the forefront through the analysis of Malinvaud's conception of macroeconomics, his alternative view on the search for microfoundations, and his research agenda in disequilibrium theory throughout the 1970s and the 1980s.
    Keywords: Microfoundations of Macroeconomics; Edmond Malinvaud; Macroeconometric Modeling; Disequilibrium Theory; New Classical Economics
    Date: 2020–06
  10. By: Paganelli, Maria Pia
    Abstract: Book Review: The Birth of Economic Rhetoric: communication, arts and economic stimulus in David Hume and Adam Smith. By Estrella Trincado
    Date: 2020–06–27
  11. By: Bellal Samir (REDYL, Ummto - REDYL, Universite de Tizi-ouzou - REDYL - Réformes Economiques et Dynamiques Locales)
    Abstract: This paper proposes to present some theoretical analysis on the question of institutional change. We will focus in particular on the approach of the new institutional economy (NEI), through the work of its principal representative, D. North, as well as the contribution of R. Boyer, representative of the Regulation School. The purpose of the presentation is to identify the factors of institutional change. Thus, while D. North's analysis puts forward the utilitarian-functionalist principle of institutions, that of R. Boyer insists, for his part, on the conflictual nature of change.
    Abstract: Ce papier se propose d'exposer quelques éléments d'analyse théorique sur la question du changement institutionnel. Nous nous intéresserons en particulier à l'approche de la nouvelle économie institutionnelle (NEI), à travers l'oeuvre de son principal représentant, D. North, ainsi qu'à l'apport de R. Boyer, représentant du courant dit de la Régulation. L'exposé a pour but d'identifier les facteurs du changement institutionnel. Ainsi, tandis que l'analyse de D. North met en avant le principe utilitariste-fonctionnaliste des institutions, celle de R. Boyer insiste, quant à elle, sur le caractère conflictuel du changement.
    Keywords: Institution,Efficiency,Accumulation regime,Regulation.,Régime d’accumulation,Efficacité
    Date: 2019–01–10
  12. By: Agnès Festré (GREDEG CNRS; Université Côte d'Azur, France); Stein Østbye (University of Tromsø, Norway)
    Abstract: We can know more than we can tell. In this paper we discuss how Polanyi applies his tacit knowledge concept to approach creativity in science. We argue that Polanyi not only is a theoretician on creativity, but also a very creative educator aiming to communicate widely, thereby, increasing legitimacy of science. In order to make tacit knowledge and other concepts and ideas more accessible to the general public, he extensively used analogies alluding to visual representations and even made use of new innovative media like film to complement written expositions.
    Keywords: methodology, Michael Polanyi, creativity
    Date: 2020–06
  13. By: Grillitsch, Markus (Lund University); Hansen, Teis (Lund University); Madsen, Stine (Lund University)
    Abstract: The focus and instruments of innovation policy have changed fundamentally over the last decades. Recently transformative innovative policy has caught the attention of scholars and policy makers, arguing that this is a new shift in the policy discourse. Even though grand challenges such as global warming and migration flows, as well as technological change such as artificial intelligence and industry 4.0 have fired the debate on transformative innovation policies in recent years, it has a long history – even going back to Schumpeter. This book chapter unfolds the historical and conceptual roots of transformative innovation policy, compares critically the different strands of literature, and discusses important questions for future research.
    Keywords: Innovation policy; transformative innovation policy; mission-oriented innovation policy; innovation systems policy; system failures; transformative challenges
    JEL: O30 O38
    Date: 2020–07–06

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