nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2021‒11‒22
seven papers chosen by
Erik Thomson
University of Manitoba

  1. Public Milton Friedman on Bailouts By Hugh Rockoff
  2. Hilferding, Woytinsky and the fiscal orthodoxy of interwar social democracy By Engelbert Stockhammer
  3. Rational play in games: A behavioral approach By Giacomo Bonanno
  4. Why is Algorithmic Theory a Necessary Basis of Economics? By Li, Bin
  5. On the Way to Another Place: Jordi Nadal and Rural Depopulation By Fernando Collantes; Vicente Pinilla
  6. Performance Analysis: Economic Foundations & Trends By Valentin Zelenyuk
  7. Poverty: What is it and Why do we care? By John Micklewright; Andrea Brandolini

  1. By: Hugh Rockoff (Rutgers University)
    Abstract: This paper analyzes the evolution of Milton Friedman’s thinking about bailouts. It covers bailouts of commercial banks, shadow banks and other financial firms, manufacturing firms, governments, financial markets, and other cases where the term is commonly used. It is based on his academic writings and on the many interviews, op-eds, letters to the editor, and so on through which he communicated his views during and after his transition from professor to public intellectual. Select number of author(s): : 1
    Keywords: Milton Friedman, Bailouts
    JEL: B22
    Date: 2020–04–17
  2. By: Engelbert Stockhammer (King’s College London)
    Abstract: In 1931, when the Great Depression hit Germany, German social democrats discussed a proposal for a (proto-Keynesian) public-debt financed employment program, the so-called WTB plan drafted by Vladimir Woytinsky. But under the leadership of Rudolf Hilferding, the SPD’s main economics spokesperson (and a former finance minister), the SPD rejected the proposal. The paper argues, firstly, that Hilferding’s endorsement of the gold standard and fiscal austerity can be traced to his analysis in Das Finanzkapital. It, secondly, rejects purely ideational interpretation of social democracy’s hostility to public employment programs. This becomes apparent when considering the experience of other European countries. In the British case a non-Marxist labour government under Ramsey MacDonald also endorsed the gold standard and fiscal orthodoxy. The WTB plan represents a missed opportunity to develop a socialist Keynesianism that would have complemented the Austro-Marxist strategy of a democratic socialism well.
    Keywords: Keynesianism, Marxism, social democracy, economic policy, gold standard, Austro-Marxism
    JEL: B14 B24 B31 N14
    Date: 2021–11
  3. By: Giacomo Bonanno (Department of Economics, University of California Davis)
    Abstract: We argue in favor of a departure from the standard equilibrium approach in game theory in favor of the less ambitious goal of describing only the actual behavior of rational players. We investigate the notion of rationality in behavioral models of extensive-form games (allowing for imperfect information), where a state is described in terms of a play of the game instead of a strategy profile. The players' beliefs are specified only at reached decision histories and are modeled as pre-choice beliefs, allowing us to carry out the analysis without the need for (objective or subjective) counterfactuals. The analysis is close in spirit to the literature on self-confirming equilibrium, but it does not rely on the notion of strategy. We also provide a characterization of rational play that is compatible with pure-strategy Nash equilibrium.
    Keywords: Rationality, extensive-form game, self-confirming equilibrium, Nash equilibrium, behavioral model
    JEL: C7
    Date: 2021–11–17
  4. By: Li, Bin
    Abstract: This paper is a complementary explanation of the World Economics Association (WEA) 2019 “Going Online” conference paper “How Could Cognitive Revolution Happen To Economics? An Introduction to the Algorithm Framework Theory”.
    Keywords: Bounded Rationality; Instructions; Algorithm; Combinatorial Explosion; Subjectivity; Mental Distortion
    JEL: A10 B00 C63 Z10
    Date: 2020–06–30
  5. By: Fernando Collantes (Universidad de Oviedo, Spain); Vicente Pinilla (Universidad de Zaragoza e Instituto Agroalimentario de Aragón (IA2), Spain)
    Abstract: In this paper we review the parts of the work of Jordi Nadal most related to the history of rural depopulation in Spain. Nadal examines several key aspects that naturally form part of the wider picture of the current state of affairs, including the role of industrialisation in inducing migratory movements from the countryside to the city and the decisive acceleration of this process during the second part of the Franco regime. We can find greater tension in issues such as the role of agricultural change of the future of depopulation, in which we can observe (inevitably) the influence of the historiographic and demographic context within which Nadal wrote his work. In conclusion, we stress the importance of studying the dynamics of the rural population as an interesting topic in its own right, and not as a stepping stone towards other subjects and debates.
    Keywords: Jordi Nadal, historical demography, rural depopulation, Spanish economic history
    JEL: N33 N34 R23
    Date: 2021–11
  6. By: Valentin Zelenyuk (School of Economics, University of Queensland, Brisbane, Qld 4072, Australia)
    Abstract: The goal of this monograph is to very concisely outline the economic theory foundations and trends of the field of Efficiency and Productivity Analysis, also sometimes referred to as Performance Analysis. We start with the profit maximization paradigm of mainstream economics, use it to derive a general profit efficiency measure and then present its special cases: revenue maximization and revenue efficiency, cost minimization and cost efficiency. We then consider various types of technical and allocative efficiencies (directional and Shephard’s distance functions and related Debreu-Farrell measures as well as non-directional measures of technical efficiency), showing how they fit or decompose the profit maximization paradigm. We then cast the efficiency and productivity concepts in a dynamic perspective that is frequently used to analyze the productivity changes of economic systems (firms, hospitals, banks, countries, etc.) over time. We conclude this monograph with an overview of major results on aggregation in productivity and efficiency analysis, where the aggregate productivity and efficiency measures are theoretically connected to their individual analogues.
    Date: 2021–10
  7. By: John Micklewright (University College London); Andrea Brandolini (Banca d'Italia)
    Abstract: We discuss the instrumental and intrinsic reasons for concern about poverty, its definition – absolute/relative, unidimensional/multidimensional – and the visual communication of what poverty really means.
    Keywords: Great poverty, income, consumption, multidimensional poverty, communication.
    JEL: C80 I32
    Date: 2021–11–01

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