nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2021‒10‒11
eleven papers chosen by
Erik Thomson
University of Manitoba

  1. Philosophie et sciences de gestion : A propos de Nietzsche - Par-delà le Bien le Mal By Yvon Pesqueux
  2. Values in Welfare economics By Antoinette Baujard
  3. The Future of  Heterodox  Economics By Teresa Ghilarducci; Zachary Knauss; Richard McGahey; William Milberg; Drew Landes; Edward Nilaj
  4. Théorie économique et philosophie de la mesure By Jean-Luc Gaffard
  5. Deepening and Widening Social Identity Analysis in Economics By Davis, John B.
  6. The Currency Board Debate of the 1940s-1960s By Thakkar, Parth
  7. Corporate Culture By Gary B. Gorton; Jill Grennan; Alexander K. Zentefis
  8. Nobody’s child: the Bank of Greece in the interwar years By Andreas Kakridis
  9. Exposure, Experience, and Expertise: Why Personal Histories Matter in Economics By Ulrike Malmendier
  10. Physics-inspired analysis of the two-class income distribution in the USA in 1983-2018 By Danial Ludwig; Victor M. Yakovenko
  11. “We've already done our part!” Territorial environmental justice and willingness to pay for renewable energies By Martin FAULQUES; Jean BONNET; Sébastien BOURDIN; Marine JUGE; Jonas PIGEON; Charlotte RICHARD

  1. By: Yvon Pesqueux (ESD R3C - Équipe Sécurité & Défense - Renseignement, Criminologie, Crises, Cybermenaces - CNAM - Conservatoire National des Arts et Métiers [CNAM])
    Abstract: Ce texte est organisé de la manière suivante. Après une introduction consacrée aux précautions à prendre quant à l'usage de la philosophie, ce texte abordera successivement : Considérations générales ; Les apports de la pensée de Nietzsche avec La Généalogie, Les deux types de morale, Remarques critiques, D'un « bon usage » de Nietzsche (L'entreprise et l'approche généalogique, L'entreprise, le soupçon et le doute, L'entreprise, les « maîtres » et les « esclaves »).
    Date: 2021–09–30
  2. By: Antoinette Baujard (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, 42023 Saint-Etienne, France)
    Abstract: This paper is a book review of Matthew Adler's bool "Measuring Social Welfare: An Introduction", published at OUP in 2019. The book is an introduction to the social welfare function approach, meant to assess social welfare and help public decision making, as a comprehensive and welcome alternative to cost-benefit analysis. The review first provides a number of references to situate the contribution of the book in the literature. Secondly, it insists on the fact that the social welfare approach is able to express transparently normative criteria, by contrast with CBA. Thirdly, it highlights that, after the focus on efficiency, the book well illustrates how to incorporate wider distributive criteria; it also enables to encompass different kinds of public policies beyond fiscal redistribution. Fourthly, it regrets that the book does not yet illustrate how to cope with the diversity of values and relevant information beyond utility and income, however introduced as theoretically possible.
    Keywords: Welfare economics, social welfare function, social welfare approach, efficiency, distribution
    JEL: D63 I30
    Date: 2021
  3. By: Teresa Ghilarducci; Zachary Knauss; Richard McGahey; William Milberg; Drew Landes; Edward Nilaj (Schwartz Center for Economic Policy Analysis (SCEPA))
    Abstract: We assess economics research and teaching frameworks in the United States by examining how knowledge is produced and ranked, the flaws and strengths of heterodox economic theory; and how students are trained, especially for careers in economic policy. We challenge the meaning of established terminology such as ‘heterodoxy’ and ‘mainstream’ by investigating their utility as a marker and to illuminate major barriers to the successful adoption of alternative economic theories in academia and the public discourse. Based on interviews with experienced economists working with heterodox paradigms in both mainstream and heterodox institutions, we identify three barriers 1) Neoclassical hegemony, 2) Weakness of heterodox theory, and 3) Pedagogy and training in economics.
    Keywords: Heterodox economics; pedagogy and training; cross discipline synthesis
    JEL: H55 J26 J32
    Date: 2021–03
  4. By: Jean-Luc Gaffard (OFCE Sciences-Po; Université Côte d'Azur; GREDEG CNRS; Institut Universitaire de France)
    Abstract: Les théories économiques sont, le plus souvent, atemporelles ou inter-temporelles. Ce sont des théories de l'équilibre, un équilibre défini par des données dites réelles, préférences et technologies. Elles reposent sur la croyance en l'existence actuelle ou future d'un monde dénué de contradictions. Elles font de la neutralité de la monnaie et de la finance ou de leur disparition un objectif à atteindre. Ce faisant elles ignorent aussi bien l'instabilité intrinsèque des économies de marché que leur possible résilience. Le regard du philosophe Albert Camus nous invite à suivre une autre démarche, celle qui vise à reconnaître l'inévitabilité des contradictions en même temps que la nécessité d'y survivre. Une narration appropriée serait de reconnaître l'ambivalence de la monnaie, de la dette et de la finance, dans le but de promouvoir un esprit de mesure à même de prévenir le déchirement des contraires.
    Keywords: Contradiction, équilibre, instabilité, mesure, monnaie
    Date: 2021–10
  5. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: Abstract: This paper is a contribution to the Erasmus Journal of Economics and Philosophy symposium on Dasgupta and Goyal’s “Narrow Identities†(2019) that models how individuals develop social identities. They do not distinguish categorical and relational social identities, model only social group social identities, minimize intersectionality (having multiple social group identities), and ignore inter-relational, social role social identities. In a club theory-like analysis, they portray the world as locked into polarized social group rivalries, where democracy matters little compared to social group loyalty. A problem with explaining social identity only in terms of social group identity is that the ‘identify with’ basis of social group loyalty undermines saying people are distinct individuals. Dasgupta and Goyal use the standard circular preferences conception of what makes people distinct individuals, so they cannot say individuals do not disappear into social groups. However, a relational social roles-based social identity analysis offers a way of explaining how people can be distinct individuals and have social identities, particularly where social group identities are connected to social role identities. This analysis is outlined using a distinction between relatively closed and relatively open behavioral domains.
    Keywords: social identity, social groups, social roles
    JEL: B41 B50
    Date: 2021–09
  6. By: Thakkar, Parth (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)
    Abstract: The late 1940s to the 1960s featured a sustained debate about currency boards in underdeveloped (or, in today’s parlance, developing) economies and their desirability compared to the alternative of central banking. Critics of currency boards found fault with them for the foregone cost of their “idle reserves,” their implied deflationary bias, their lack of discretionary monetary policy, and their lack of a lender of last resort, among other things. Defenders of the currency board system argued that the criticisms were either incorrect or irrelevant. After carefully reviewing the debate, I opine on it, coming down mainly on the side of the defenders of currency boards.
    Keywords: Currency board; debate
    JEL: B27 E59 F33 N10
    Date: 2021–10
  7. By: Gary B. Gorton; Jill Grennan; Alexander K. Zentefis
    Abstract: Corporate culture is an omnibus term that includes many elements like norms, values, knowledge, and customs that are relevant to a firm. Economists have made great progress recently in devising methods of measuring different aspects of corporate culture. These empirical measures of culture have explained mergers and acquisitions, corporate risk-taking, and unethical behaviors observed in corporations, among other topics. We argue that unpacking corporate culture into its components is the right way to research it empirically. Theories of corporate culture are still in development, and we discuss the major contributions thus far. We argue that a theory of the firm and of corporate decision-making that is based on corporate culture is more germane to the practical realities of firms’ inner workings than prevailing theories based on agency costs. Corporate culture has the potential to set the theoretical paradigm for all corporate finance research.
    JEL: D23 G30 L22 M14
    Date: 2021–10
  8. By: Andreas Kakridis (Bank of Greece and Ionian University)
    Abstract: Neither history nor economic historians have been kind to Greece’s central bank in the interwar years. Born at the behest of the League of Nations to help the country secure a new international loan, the Bank of Greece was treated with a mixture of suspicion and hostility. The onset of the Great Depression pitted its statutory objective to defend the exchange rate against the incentive to reflate the domestic economy. Its policy response has generally been criticized as either ineffectual or detrimental: the Bank is accused of having pursued an unduly orthodox and restrictive policy, both during but also after the country’s exit from the gold exchange standard, some going as far as to argue that the 1932 devaluation failed to produce genuine recovery. Relying primarily on archival material, this paper combines qualitative and quantitative sources to revisit the Bank of Greece’s birth and operation during the Great Depression. In doing so, it hopes to put Greece on the map of international comparisons of the Great Depression and debates on the role of the League of Nations, the effectiveness of money doctoring and foreign policy interventions more generally. What is more, the paper seeks to revise several aspects of the conventional narrative surrounding the Bank’s role. First, it argues that monetary policy was neither as ineffective nor as restrictive as critics suggest; this was largely thanks to a continued trickle of foreign lending, but also to the Bank’s own decision to sterilize foreign exchange outflows, thus breaking the ‘rules of the game’. Second, it revisits Greece’s attempt to cling to gold after sterling’s devaluation, a decision routinely denounced as a critical policy mistake. Last but not least, it challenges the notion that Greece constitutes an exception to the rule that wants countries who shed their ‘golden fetters’ recovering faster.
    Keywords: central bank; Greece;gold standard; Great Depression; League of Nations
    JEL: E58 E65 N14 N24
    Date: 2021–07
  9. By: Ulrike Malmendier
    Abstract: Personal experiences of economic outcomes, from global financial crises to individual-level job losses, can shape individual beliefs, risk attitudes, and choices for years to come. A growing literature on experience effects shows that individuals act as if past outcomes that they experienced were overly likely to occur again, even if they are fully informed about the actual likelihood. This reaction to past experiences is long-lasting though it decays over time as individuals accumulate new experiences. Modern brain science helps understand these processes. Evidence on neuroplasticity reveals that personal experiences and learning alter the strength of neural connections and fine-tune the brain structure to those past experiences ("use-dependent brain"). I show that experience effects help understand belief formation and decision-making in a wide area of economic applications, including inflation, home purchases, mortgage choices, and consumption expenditures. I argue that experience-based learning is broadly applicable to economic decision-making and discuss topics for future research in education, health, race, and gender economics.
    JEL: E7 G11 G12 G41
    Date: 2021–10
  10. By: Danial Ludwig; Victor M. Yakovenko
    Abstract: The first part of this paper is a brief survey of the approaches to economic inequality based on ideas from statistical physics and kinetic theory. These include the Boltzmann kinetic equation, the time-reversal symmetry, the ergodicity hypothesis, entropy maximization, and the Fokker-Planck equation. The origins of the exponential Boltzmann-Gibbs distribution and the Pareto power law are discussed in relation to additive and multiplicative stochastic processes. The second part of the paper analyzes income distribution data in the USA for the time period 1983-2018 using a two-class decomposition. We present overwhelming evidence that the lower class (more than 90% of the population) is described by the exponential distribution, whereas the upper class (about 4% of the population in 2018) by the power law. We show that the significant growth of inequality during this time period is due to the sharp increase in the upper-class income share, whereas relative inequality within the lower class remains constant. We speculate that the expansion of the upper-class population and income shares may be due to increasing digitization and non-locality of the economy in the last 40 years.
    Date: 2021–10
  11. By: Martin FAULQUES (University of Caen-Normandy, CREM-CAEN, UMR CNRS 6211, UFR SEGGAT, esplanade de la paix 14000 Caen (France)); Jean BONNET (University of Caen-Normandy, CREM-CAEN, UMR CNRS 6211, UFR SEGGAT, esplanade de la paix 14000 Caen (France)); Sébastien BOURDIN (EM Normandie Business School, Métis Lab, 9 rue Claude Bloch, 14000 Caen (France)); Marine JUGE (ENGIE); Jonas PIGEON (ENGIE); Charlotte RICHARD (ENGIE)
    Abstract: The development of Renewable Energies(RE)must be stepped upin the coming years if we areto successfullyrealizethe ambitiousenergy transition challenge set by manygovernments across the globe. In this context, we used a Discrete Choice Experiment (DCE) combined with a Geographical Information System (GIS) to assess the willingness of individualsin the French context to switchto a more virtuousenergy mixbasedon three energy sources(wind, photovoltaic and biogas). Our findingsshowthatinhabitants living in areas with the presence of REwith negative externalities(Wind Turbines and Anaerobic Digestion units)tend to have a lower Willingness to Pay(WTP)than other areas, indicatinga principle of territorial distributive justice. In this context, people ask for greaterterritorial equity in the distribution of externalitiessincethey consider they “have already done their part”.Accordingly, our study argues for morepublic policy effort to plan the location of future RE facilitiesin a more equitable way.
    Keywords: Environmental justice, renewable energies, willingness to pay, discrete choice experiment, territory
    Date: 2021–01

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