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on History and Philosophy of Economics |
| By: | Peter Hull; Michal Koles\'ar; Christopher Walters |
| Abstract: | The 2021 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was awarded to David Card "for his empirical contributions to labour economics" and to Joshua Angrist and Guido Imbens "for their methodological contributions to the analysis of causal relationships." We survey these contributions of the three laureates, and discuss how their empirical and methodological insights transformed the modern practice of applied microeconomics. By emphasizing research design and formalizing the causal content of different econometric procedures, the laureates shed new light on key questions in labour economics and advanced a robust toolkit for empirical analyses across many fields. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2203.16405&r= |
| By: | Tweneboah Senzu, Emmanuel |
| Abstract: | The foundation upon which this paper was submitted is to rigorously conceptualize the adoption, and the interpretation in the use of the term ‘Fragility’ in a strict economics perspective, to avoid the continual arbitrary interpretation of the terminology that confuses its explanation power in a strict economic context to that of political economy as a school of thought within the Lexicon of the School of Social Sciences. |
| Keywords: | Fragility, Concept, Interpretation, Pedagogy, Economics, Political Economy |
| JEL: | A2 E6 F4 G1 H5 P0 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:112736&r= |
| By: | Ettore Gallo (Department of Economics, New School for Social Research); Mark Setterfield (Department of Economics, New School for Social Research) |
| Abstract: | This paper discusses Joan Robinson’s remarks on the importance of historical time in economic analysis. On the one hand, Joan Robinson expressed skepticism with equilibrium analysis as such, arguing that as soon as economists take into account the uncertainty of expectations, history needs to replace equilibrium. On the other, Robinson stressed that, while building economic models, one must be aware that it is historical time rather than logical time that rules reality, warning against the methodological mistake of confusing comparisons of equilibrium positions with a movement between them. We argue that these criticisms point to the possibility of thinking in terms of two different ‘levels’ of historical time – a higher (fundamentalist) level, and a practical (and more analytically tractable) lower level. Using this distinction, we provide a taxonomy of existing strands of post-Keynesian growth theory that are consistent with the concept of low-level historical time. It is shown that despite appearances to the contrary, much post-Keynesian growth theory displays fidelity to Joan Robinson’s concern with the importance of historical time. |
| Keywords: | Historical time, economic growth, provisional equilibrium, traverse, shifting equilibrium |
| JEL: | B31 B41 E11 E12 O41 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:2204&r= |
| By: | John G. Fernald |
| Abstract: | Dale W. Jorgenson has been a central contributor to a wide range of economic and policy issues over a long and productive career. His research is characterized by a tight integration of economic theory, appropriate data that matches the theory, and sound econometrics. His groundbreaking work on the theory and empirics of investment established the research path for the economics profession. He is a founder of modern growth accounting: Official statistics in many countries, including the United States, implement Jorgenson’s methods. Relatedly, without Jorgenson’s unflagging efforts, consistent industry KLEMS datasets for many countries—which have been widely used in recent decades for growth accounting, econometrics, and other applications—would not exist. Jorgenson is also a pioneer in econometric modeling of producer and consumer behavior and of econometrically estimated, intertemporal general equilibrium modeling for policy analysis. |
| Keywords: | Dale Jorgenson; investment; growth accounting |
| JEL: | B21 B31 D20 O40 |
| Date: | 2022–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:94101&r= |
| By: | César Castillo-García (Department of Economics, New School for Social Research) |
| Abstract: | This paper is the first part of a reconstruction of the evolution of neoliberalism in Peru throughout its different historical waves. The Peruvian case was an ideological precursor of the South American neoliberal authoritarianism before the 1950s. In this regard, I challenge a standard historical narrative that states neoliberalism is an outcome of the transfer of ideas like the case of the Chilean Chicago-Boys and their other Latin American counterparts (Valdés 1995). The Peruvian experience also constituted an opening episode of the deep transnational connection between the main neoliberal networks (Walter Lippmann Colloquium and the Mont Pèlerin Society) and Latin American economic experts. Since late 1940s, neoliberal intellectuals have implemented institutions and a hegemonic discourse affecting current economic affairs in Peru. They played a role in influencing public opinion through political relations and media outlets and directly devising economic policies. The discourse and actions of the neoliberals in Peru have left institutional legacies targeting topics as economic systems, the fiscal and monetary policies, the role of the State, development policies, the private initiative and foreign aid. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:2205&r= |
| By: | César Castillo-García (Department of Economics, New School for Social Research) |
| Abstract: | In contrast to European and other Latin American experiences, researchers understand Peruvian fascism as a simple mimicry (a political alternative of the 1930s that regimes and movements look to replicate) or the product of transnational propaganda looking for public support to Mussolini and Franco. To avoid this reductionism, this paper proposes a double-sided definition based on Vajda (1976) and Paxton (1998) to understand fascism as a movement and an ideology. That enables us to identify the Peruvian fascism by studying the actions and ideas of three intellectuals who sympathized with it: José de la Riva-Agüero, Raúl Ferrero Rebagliatti, and Víctor Andrés Belaúnde. I argue that their discourse is a symbiosis between Peruvian authoritarian political tradition and European fascisms. Even though these fascist intellectuals did not create a strong political movement, they incepted political concepts regarding social policy, the government, the nation, the relations between State and the church, and anti-Marxism in public discussion. As a result, they passed on elements of the political repertory supported by the current new right-wing populism in Peru. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:2206&r= |
| By: | Owen F. Davis (Department of Economics, New School for Social Research) |
| Abstract: | Economic agents must form models of their environments in order to develop expectations and make decisions, yet these models are certain to be misspecified. An agent aware of their own inability to perfectly capture the structural relationships of their observed world will entertain model uncertainty. Under the plausible assumptions that the “true” model is not known to the decision-maker and the decision-maker knows this—known as the M-open case in Bayesian statistics—uncertainty over propositions becomes numerically irreducible. The notion of model uncertainty is developed with reference to Post Keynesian theories of fundamental uncertainty as well as relevant areas of study within decision theory, including the growing literature on unawareness. The model uncertainty view poses challenges for both literatures and provides a novel justification for the types of uncertainty associated with Knight and Keynes. |
| Keywords: | Fundamental uncertainty, model uncertainty, decision theory, Post Keynesian |
| JEL: | C11 D81 E12 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:2207&r= |
| By: | Yoto V. Yotov; Yoto V. Yotov |
| Abstract: | On the eve of its 60th anniversary, the gravity model of trade is a ‘celebrity’, due to its intuitive appeal, solid theoretical foundations, and remarkable empirical success. Yet, many economists still view gravity simply as an intuitive but naive reduced-form estimating equation and apply it without guidance from theory, while others are skeptical about its usefulness for counterfactual projections. The objective of this paper is to offer a historical overview of its evolution from an a-theoretical application to an estimating computable general equilibrium (E-CGE) model, which can be nested in more complex frameworks. Along the way, I address some misconceptions about the gravity model, summarize the current best practices for gravity estimations, and highlight some properties that have made gravity so successful. |
| Keywords: | structural gravity, evolution, theory, estimation general equilibrium |
| JEL: | F13 F14 F16 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9584&r= |
| By: | Elias, Julio (Universidad del CEMA); Lacetera, Nicola (University of Toronto); Macis, Mario (Johns Hopkins University) |
| Abstract: | Price surges often generate social disapproval and requests for regulation and price controls, but these interventions may cause inefficiencies and shortages. To study how individuals perceive and reason about sudden price increases for different products under different policy regimes, we conduct a survey experiment with Canadian and U.S. residents. Econometric and textual analyses indicate that prices are not seen just as signals of scarcity; they cause widespread opposition and strong and polarized moral reactions. However, acceptance of unregulated prices is higher when potential economic tradeoffs between unregulated and controlled prices are salient and when higher production costs contribute to the price increases. The salience of tradeoffs also reduces the polarization of moral judgments between supporters and opponents of unregulated pricing. In part, the acceptance of free price adjustments is driven by people's overall attitudes about the function of markets and the government in society. These findings are corroborated by a donation experiment, and they suggest that awareness of the causes and potential consequences of price increases may induce less extreme views about the role of market institutions in governing the economy. |
| Keywords: | price surges, price controls, preferences, morality, tradeoffs |
| JEL: | C91 D63 D91 I11 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15238&r= |