nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2022‒03‒07
seventeen papers chosen by
Erik Thomson
University of Manitoba

  1. Lessons of Keynes’s Economic Consequences in a Turbulent Century By Clavin, P.; Corsetti, G.; Obstfeld, M.; Tooze, A.
  2. The pathway of an economist throughout John Rawls' works By Claude Gamel
  3. Kenneth Boulding: A Friends' Economist By Robert Scott
  4. Forthcoming in "Journal of the History of Economic Though" in 2024. Title: "Does Friendship Stem from Altruism? Adam Smith and the Distinction between Love-based and Interest-based Preferences" By Khalil, Elias
  5. "Controlling for what?" Folk economics, legal consciousness and the gender wage gap in the United States By Hirschman, Daniel
  6. Behavioral Finance During the Belle Époque: When the Actual Portfolios of French Individual Investors Met Behavioral Portfolio Theory By Maxime MERLI; Antoine PARENT
  7. Do Negative Replications Affect Citations? By Tom Coupé; W. Robert Reed
  8. The Ethics of Nudge: Towards a governance structure for the ethical use of nudge theory by Governments By Raj, Vijay
  9. Economists in the 2008 Financial Crisis: Slow to See, Fast to Act By Daniel Levy; Tamir Mayer; Alon Raviv
  10. Les modèles intégrés économie-climat : quels usages pour quelles décisions ? By Jean-Charles Hourcade; Peter Tankov; Stéphane Voisin; F. Ghersi; Julien Lefèvre
  11. La Revue d'économie politique et la guerre de 1914 - 1918 By Ramón Tortajada
  12. Viewpoints of Epistemic Principals between Knowledge and Information By Fascia, Michael
  13. Time use and happiness: Evidence across three decades By Han, Jeehoon; Kaiser, Caspar
  14. The Moral Preferences of Investors: Experimental Evidence By Jean-François Bonnefon; Augustin Landier; Parinitha R. Sastry; David Thesmar
  15. 40 Years of Dutch Disease Literature: Lessons for Developing Countries By Edouard Mien; M Goujon
  16. Other-Regarding Preferences and Redistributive Politics By Fehr, Ernst; Epper, Thomas; Senn, Julien
  17. Democratising Risk: In Search of a Methodology to Study Existential Risk By Carla Zoe Cremer; Luke Kemp

  1. By: Clavin, P.; Corsetti, G.; Obstfeld, M.; Tooze, A.
    Abstract: Just over a century old, John Maynard Keynes’s The Economic Consequences of the Peace (1919) remains a seminal document of the twentieth century. At the time, the book was a prescient analysis of political events to come. In the decades that followed, this still controversial text became an essential ingredient in the unfolding of history. In this essay, we review the arc of experience since 1919 from the perspective of Keynes’s influence and his changing understanding of economics, politics, and geopolitics. We identify how he, his ideas, and this text became key reference points during times of turbulence as actors sought to manage a range of shocks. Near the end of his life, Keynes would play a central role in planning the world economy’s reconstruction after World War II. We argue that the “global order†that evolved since then, marked by increasingly polarized societies, leaves the community of nations ill prepared to provide key global public goods or to counter critical collective threats.
    Keywords: Keynes, World War I, Versailles, interwar period, League of Nations, World War II, Bretton Woods, Cold War, multilateralism, global order
    JEL: B30 E10 E30 F30 F40 N10 N20
    Date: 2021–10–05
  2. By: Claude Gamel (LEST - Laboratoire d'économie et de sociologie du travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique)
    Abstract: During more than thirty years of research in "philosophy and economics", I considered John Rawls' works non only as a valuable source of well-ordered concepts but also as a constant benchmark and therefore, I even ventured to make personal creations that Rawls himself would not have accepted. From my point of view, Rawlsian theory might be compared to a masterpiece of the flamboyant Gothic art, which impresses anyone with its extensive appearance; original techniques used at the time of cathedrals are very interesting and, later, they make some people want to innovate with their initial structure. Hence three steps in my research pathway as an economist: First, the time of discovering very stimulating ideas, then the time of comparing John Rawls' works with those of two other architects of justice in society (the economists Friedrich Hayek and Amartya Sen) and, finally, the time of manipulating Rawlsian concepts to try a more personal sketch of a sustainable liberalism.
    Abstract: Tout au long de plus de 30 ans de recherches en « philosophie économique », l'œuvre de John Rawls fut pour moi non seulement un précieux réservoir de concepts très bien ordonnés, mais aussi un constant point de repère, jusqu'à me risquer à quelques audaces personnelles que Rawls lui-même n'aurait pas acceptées. Je comparerais volontiers la théorie rawlsienne à un chef d'œuvre de l'art gothique au temps des cathédrales, qui, avant même d'impressionner par son allure d'ensemble, interpelle d'abord par l'originalité des techniques utilisées et donne envie, bien plus tard, d'innover à partir de la structure initiale. D'où trois étapes dans mon cheminement d'économiste : d'abord le temps de la découverte d'idées très fécondes, puis celui de la comparaison avec les œuvres de deux autres architectes de la justice en société (les économistes Friedrich Hayek et Amartya Sen) et enfin le temps de la manipulation de concepts rawlsiens pour tenter une esquisse plus personnelle d'un libéralisme soutenable.
    Keywords: philosophy and economics,John Rawls,discovery,comparisons,manipulations,philosophie économique,découverte,comparaisons,manipulations A12,D63,H20
    Date: 2021
  3. By: Robert Scott (Monmouth University)
    Abstract: This paper examines Kenneth Boulding's (1910-1993) religious beliefs and argues he was one of the most prolific religious economists in the 20 th century. He was an enigmatic economist whose career spanned over six decades. He helped to establish the field of general systems and furthered peace studies and conflict and defense. His early work earned him the John Bates Clark medal in 1949. But behind Boulding's theoretical economics was a deep religious ideology. Strongly affected by World War I while growing up in Liverpool, England, Boulding became a lifelong pacifist. Raised Methodist, Boulding discovered Quakerism in high school. While Boulding published widely in the field of economics, he also published almost 100 articles in Quaker journals. Boulding's body of work in economics and Quakerism led to interesting crosspollination. His work on peace and conflict and defense were a direct result of his pacifism. Boulding's work shows deep concern for human betterment and prosperity that is seeped in his religious principles.
    Keywords: human betterment,Kenneth Boulding,pacifism,Quakers,Religious Society of Friends
    Date: 2022–01–24
  4. By: Khalil, Elias
    Abstract: Friendship-and-love expresses musings about wellbeing—while “wellbeing” is the economist’s substantive satisfaction. Insofar as altruism is about wellbeing, it must differ from friendship-and-love. However, what is the basis of the difference between substantive satisfaction and friendship-and-love? The answer can be found in Smith’s Theory of Moral Sentiments, chapter 2: how “mutual sympathy” differs from “sympathy.” Smith scholars generally miss the uniqueness of “mutual sympathy” and, indeed, fold it under Smith’s “sympathy” (and “empathy”)—with one exception. Robert Sugden highlights the uniqueness of mutual sympathy. However, he goes to the other end, folding Smith’s “sympathy-and-empathy” under “mutual sympathy.” This paper aims to avoid the folding in either direction. While mutual sympathy originates love-based sociality (friendship-and-love), sympathy-and-empathy originates interest-based sociality (wellbeing that includes altruism). This paper concludes that friendship is neither reducible to altruism nor vice versa. Further, this paper distinguishes this problem from the question regarding the socialization of the individual.
    Date: 2021–12–17
  5. By: Hirschman, Daniel (Brown University)
    Abstract: Studies of the political power of economic knowledge have tended to foreground the role of causal claims in the form of grand theories or more narrow findings produced by experimental methods. In contrast, scholars have paid relatively little attention to the role of economic experts' descriptions. This article highlights one category of influential, quantitative descriptive claim: stylized facts. Stylized facts are simple empirical regularities in need of explanation. Focusing on the example of the gender wage gap in the United States, this article showcases how stylized facts travel into political debates, and how the choices made in characterizing an aspect of economic life (such as controlling for full-time work, but little else) interact with social movement activism, and folk understandings of economic life shaped by legal consciousness. The gender wage gap was first calculated in the 1950s, but did not take on special importance until the 1960s-1970s when feminists rallied around the statistic as a useful aggregate measure of women's economic disempowerment. Academics soon followed, and sociologists and economists began to publish studies documenting trends in the gap and trying to account for its sources. The comparable worth movement of the 1980s explicitly argued that the wage gap resulted from occupational segregation and the devaluation of women's work. As that movement faltered in the late 1980s, the gender wage gap became increasingly understood through the lens of women's choices and tradeoffs between work and family, and occupational segregation dropped out of the narrative, even as academics documented the persistent importance of segregation in explaining the remaining gap. Throughout this period, the gap was frequently misunderstood or misrepresented as reflecting the narrow sort of same-job, different-pay discrimination made illegal by the 1963 Equal Pay Act, adding confusion to the public debate over women's economic position. These dynamics showcase how technical choices made in the identification of stylized facts, such as statistical controls, are simultaneously deeply political choices.
    Date: 2021–11–12
  6. By: Maxime MERLI (LaRGE Research Center, Université de Strasbourg); Antoine PARENT (OFCE, Université Paris 8, LED & CAC-IXXI, ENS Lyon)
    Abstract: In this article we unearth the first real portfolios of French individual investors of the Belle Époque by reinvestigating the study of Des Essars and the comments of his contemporaries (Coste, Neymarck, and Leroy Beaulieu). The results are striking: we find strong elements of behavioral finance during the first era of financial globalization. Both the actual portfolios and the comments and advice of the financial analysts of the time reveal traces of behavioral finance and, more specifically, echo very clearly behavioral portfolio theory a century before its modeling. This discovery is important not only from the point of view of the historical depth of behavioral finance, but also for the persistence and legitimacy of the questions that behavioral finance has always addressed to standard finance.
    Keywords: Financial History, Individual Investors, Behavioral Finance, Behavioral Portfolio Theory.
    JEL: G11 G14 G15 N20 N23
    Date: 2022
  7. By: Tom Coupé (University of Canterbury); W. Robert Reed (University of Canterbury)
    Abstract: This study examines the effect of negative replications on the citation rates of replicated studies. We study a set of 204 replicated studies in economics and compare their citation performance with an initial sample of 112,000 potential controls taken from Scopus. From this initial pool, we match each replicated study with multiple controls based on having comparable citation histories. We have two main findings. First, studies that are replicated receive somewhat more citations than their matched control studies. Second, there is no evidence that studies that receive negative replications suffer a penalty in the form of fewer citations.
    Keywords: Replications, Citations, Matching, Meta-science, Self-correcting science
    JEL: A11 A14 B41 C18
    Date: 2022–02–01
  8. By: Raj, Vijay
    Abstract: This paper explores the use of nudge theory within governments and performs a pragmatic evaluation of its adoption by policymakers from an ethical point of view. While most critics argue against the use of nudge theory by governments from an academic or philosophical standpoint, this paper examines the use of nudge theory as one of the many tools available for policymakers and adopts a pragmatic approach. The paper concludes by calling for a governance structure that addresses the ethical concerns and ensures the ethical application of nudge theory through the development of an ethical nudge.
    Date: 2021–11–22
  9. By: Daniel Levy (Department of Economics, Bar-Ilan University, Israel; Department of Economics, Emory University, US; ICEA, Wilfrid Laurier University, Canada; Rimini Centre for Economic Analysis; ISET, TSU, Georgia); Tamir Mayer (Graduate School of Business Administration, Bar-Ilan University, Israel); Alon Raviv (Graduate School of Business Administration, Bar-Ilan University, Israel)
    Abstract: We study the economics and finance scholars' reaction to the 2008 financial crisis using machine learning language analyses methods of Latent Dirichlet Allocation and dynamic topic modelling algorithms, to analyze the texts of 14,270 NBER working papers covering the 1999–2016 period. We find that academic scholars as a group were insufficiently engaged in crises' studies before 2008. As the crisis unraveled, however, they switched their focus to studying the crisis, its causes, and consequences. Thus, the scholars were “slow-to-see,” but they were “fast-to-act.” Their initial response to the ongoing Covid-19 crisis is consistent with these conclusions.
    Keywords: Financial crisis, Economic Crisis, Great recession, NBER working papers, LDA textual analysis, Topic modeling, Dynamic Topic Modeling, Machine learning
    JEL: E32 E44 E50 F30 G01 G20
    Date: 2022–02
  10. By: Jean-Charles Hourcade; Peter Tankov; Stéphane Voisin; F. Ghersi (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique); Julien Lefèvre
    Date: 2021
  11. By: Ramón Tortajada (CREG - Centre de recherche en économie de Grenoble - UGA - Université Grenoble Alpes)
    Abstract: Cet article entend retracer la façon dont la Revue d'économie politique s'est inscrite dans la Grande Guerre.
    Keywords: première guerre mondiale,revue d'économie politique,histoire économique,revue économique,analyse économique,politique monétaire
    Date: 2021
  12. By: Fascia, Michael
    Abstract: We can consider the unity of knowledge in a business context as a singular event, but nonetheless, deliberate a contrary perspective from current knowledge transfer practitioners. Both perspectives agree, deliverable knowledge is key for business success and competitive advantage but questions the problematic transfer of knowledge. This discussion examines the creation of knowledge, recognised within contemporary writings as significant in determining a starting point for analogous scrutiny, and asks if this focal point is inherently difficult to establish and measure? We then look to synthesise the foremost principle of ‘knowledge’, which helps underpin congruent knowledge transfer theories, perspectives, and doyennes from an occidental business perspective.
    Date: 2022–01–26
  13. By: Han, Jeehoon; Kaiser, Caspar (University of Oxford)
    Abstract: We use large-scale diary data from a representative sample of Americans to proxy welfare at the level of individual activities. We make three contributions. First, we examine the association between individual activities and happiness, and show how this association has changed over time. Compared to 1985, domestic work and social care produce more happiness today. Watching TV produces less happiness today than it used to. Second, we combine activity-level data on happiness and time allocation to construct a measure of ‘time-weighted happiness’. We then analyse historical trends in this measure across population groups, particularly gender. We observe that, over the last 35 years, women’s time-weighted happiness has improved significantly relative to men’s. This trend is largely driven by gendered shifts in time allocation, rather than heterogenous trends in the enjoyability of individual activities. Our result is in stark contrast to previous work which showed a decline in women’s relative wellbeing. To explain this, our third contribution is to compare the determinants of life satisfaction – a global measure on which most previous work is built – with our measure of time-weighted happiness. Time-weighted happiness and life satisfaction turn out to only be weakly correlated. Moreover, although we obtain strong associations of income and employment status with life satisfaction, no such associations can be observed for time-weighted happiness. These findings highlight the importance of distinguishing between happiness as experienced in time and more global wellbeing measures. Finally, we verify the robustness our results by replicating them in data from the United Kingdom and show that our results are robust to alternative assumptions about how people use happiness scales.
    Date: 2021–10–03
  14. By: Jean-François Bonnefon; Augustin Landier; Parinitha R. Sastry; David Thesmar
    Abstract: We characterize investors’ moral preferences in a parsimonious experimental setting, where we auction stocks with various ethical features. We find strong evidence that investors seek to align their investments with their social values (“value alignment”), and find no evidence of behavior driven by the social impact of investment decisions (“impact-seeking preferences”). First, the willingness to pay for a stock is a linear function of corporate externalities, and is symmetric for positive or negative externalities. Second, whether charity transfers are contingent or independent on investors buying the auctioned stock does not affect their WTP. Our results are thus compatible with a utility model where non-pecuniary benefits of firms’ externalities only accrue through stock ownership, not through the actual impact of investment decisions. Finally, non-pecuniary preferences are linear and additive: willingness to pay for social externalities is proportional to the expected sum of charity transfers made by firms (even if some of these donations are negative).
    JEL: G11 G41 M14
    Date: 2022–01
  15. By: Edouard Mien (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); M Goujon (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)
    Abstract: This paper surveys the literature on the "Dutch disease" caused by natural resources revenues in developing countries. It describes the original model of Dutch disease and some important extensions proposed in the theoretical literature, focusing on the ones that meet the developing countries' conditions. It then reviews the main empirical studies that have been conducted since the 1980s, aiming to understand the methodological issues and to highlight the current gaps in the literature. There is evidence that the Dutch disease is still a topical issue for many developing countries, particularly in Africa. However, there remains large gaps in the theoretical and empirical literature in the understanding of the most adequate policy instruments to cope with, specifically in the least developed countries that are new producers of commodities.
    Keywords: Dutch disease,Natural resources,Resource curse,Structural transformations,Real exchange rate
    Date: 2021–06
  16. By: Fehr, Ernst (University of Zurich); Epper, Thomas (University of Lille); Senn, Julien (University of Zurich)
    Abstract: Increasing inequality and associated egalitarian sentiments have again put redistribution on the political agenda. Other-regarding preferences may also affect support for redistribution, but knowledge about their distribution in the broader population and how they are associated with political support for redistributive policies is still scarce. In this paper, we take advantage of Swiss direct democracy, where people voted several times on strongly redistributive policies in national plebiscites, to study the link between other-regarding preferences and support for redistribution in a broad sample of the Swiss population. We document that inequality aversion and altruistic concerns play a quantitatively large positive role in the support for redistribution, in particular for more affluent individuals. In addition, previously identified key motives underlying opposition to redistribution – such as the belief that effort is an important driver of individual success – play no role for selfish individuals but are highly relevant for altruistic and egalitarian individuals. Finally, while inequality averse individuals display strong support for policies that primarily aim at reducing the incomes of the rich, altruistic individuals are considerably less supportive of such policies. Thus, knowledge about the fundamental properties and the distribution of individuals' other-regarding preferences also provides a deeper understanding about who is likely to support specific redistributive policies.
    Keywords: social preferences, altruism, inequality aversion, preference heterogeneity, demand for redistribution
    JEL: D31 D72 H23 H24
    Date: 2022–02
  17. By: Carla Zoe Cremer; Luke Kemp
    Abstract: Studying potential global catastrophes is vital. The high stakes of existential risk studies (ERS) necessitate serious scrutiny and self-reflection. We argue that existing approaches to studying existential risk are not yet fit for purpose, and perhaps even run the risk of increasing harm. We highlight general challenges in ERS: accommodating value pluralism, crafting precise definitions, developing comprehensive tools for risk assessment, dealing with uncertainty, and accounting for the dangers associated with taking exceptional actions to mitigate or prevent catastrophes. The most influential framework for ERS, the 'techno-utopian approach' (TUA), struggles with these issues and has a unique set of additional problems: it unnecessarily combines the study of longtermism and longtermist ethics with the study of extinction, relies on a non-representative moral worldview, uses ambiguous and inadequate definitions, fails to incorporate insights from risk assessment in relevant fields, chooses arbitrary categorisations of risk, and advocates for dangerous mitigation strategies. Its moral and empirical assumptions might be particularly vulnerable to securitisation and misuse. We suggest several key improvements: separating the study of extinction ethics (ethical implications of extinction) and existential ethics (the ethical implications of different societal forms), from the analysis of human extinction and global catastrophe; drawing on the latest developments in risk assessment literature; diversifying the field, and; democratising its policy recommendations.
    Date: 2021–12

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