nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2022‒06‒27
twelve papers chosen by
Erik Thomson
University of Manitoba

  1. A Key Work in the Origin of the Theory of the Entrepreneur in the Spanish Enlightenment: An Unknown Manuscript of the Cantillon's Essai By Jesus Astigarraga; Juan Zabalza
  2. The authors of economics journals revisited: Evidence from a large-scale replication of Hodgson & Rothman (1999) By Aistleitner, Matthias; Kapeller, Jakob; Kronberger, Dominik
  3. Rawls’s difference principle and maximin rule of allocation: a new analysis By Philippe Mongin; Marcus Pivato
  4. What can Economists Learn from Public Perspectives on the Economy and Economic Statistics? By Johnny Runge; Anna Killick
  5. How Did It Happen?: The Great Inflation of the 1970s and Lessons for Today By Edward Nelson
  6. The post war welfare state: stages and disputes By Howard Glennerster
  7. A review of nudges: definitions, justifications, effectiveness By Congiu, Luca; Moscati, Ivan
  8. Recent Contributions to Theories of Discrimination By Paula Onuchic
  9. Discovering the true Schumpeter: New insights into the finance and growth nexus By Bofinger, Peter; Geißendörfer, Lisa; Haas, Thomas; Mayer, Fabian
  10. Una reconstrucción del debate marxista sobre la fuente del plusvalor extra que apropian los capitales innovadores By Gastón Caligaris
  11. The crisis of economics By Jacques Fontanel
  12. Political Legitimacy in Historical Political Economy By Avner Greif; Jared Rubin

  1. By: Jesus Astigarraga (Universidad de Zaragoza, Departamento de Economia Aplicada); Juan Zabalza (Universidad de Alicante, Departamento de Analisis Economico Aplicado)
    Abstract: The Essai sur la nature du commerce en général (1755) by Richard Cantillon is a major treatise on the "science of commerce" that emerged in the 18th century in Europe. Despite not having been translated into Spanish during that century, the treatise was well known in Spain, particularly during the last third of the century. However, the recent finding of a manuscript containing an unabridged translation of Cantillon's emblematic book obliges us to turn our attention to Cantillon's Essai's fortune in Spain. This work provides a comprehensive interpretation of this manuscript and its possible date and authorship. The innovative nature of the translation is underlined by an exhaustive displaying, for the first time in Spain, of the theory of the entrepreneur, of which the Irish economist was a true pioneer.
    Keywords: Intellectual History, International Circulation of Economic Ideas, Spanish Enlightenment, Translations of Political Economy, Theory of Entrepreneur
    JEL: B10 B30
    Date: 2022–05
  2. By: Aistleitner, Matthias; Kapeller, Jakob; Kronberger, Dominik
    Abstract: In this paper, we present results from of a large-scale replication of Hodgson and Rothman's (1999) seminal analysis of the institutional and geographical concentration of authors publishing in top economic journals. We analyze bibliometric data of more than 49.000 articles published in a set of 30 highly influential economic journals between 1990 and 2018. Based on a random sample of 3.253 authors, we further analyze the PhD-granting institutions of the authors under study to better scrutinize the claim of an institutional oligopoly. The findings confirm the long-term persistence of strong oligopolistic structures in terms of both, author affiliations as well as PhD-granting institutions.
    Keywords: sociology of economics,bibliometrics,concentration in science,replication study
    JEL: A14 B20
    Date: 2022
  3. By: Philippe Mongin (CNRS - Centre National de la Recherche Scientifique, HEC Paris - Ecole des Hautes Etudes Commerciales, LEMMA - Laboratoire d'économie mathématique et de microéconomie appliquée - UP2 - Université Panthéon-Assas); Marcus Pivato (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)
    Abstract: If Rawls's A Theory of Justice has achieved fame among economists, this is due to his Difference Principle, which says that inequalities of resources should be to the benefit of the less fortunate, or more operationally, that allocations of resources should be ranked by the maximin criterion. We extend the Rawlsian maximin in two ways: first, by resorting to the more general min-of-means formula of decision theory, second, by addressing the case where the resources accruing to each individual are uncertain to society. For the latter purpose, we resort to the ex ante versus ex post distinction of welfare economics. The paper axiomatically characterizes the ex ante and ex post forms of the Rawlsian maximin and compares them in terms of egalitarian criteria. It finally recommends and axiomatizes a compromise egalitarian theory that mixes the two forms.
    Date: 2021
  4. By: Johnny Runge; Anna Killick
    Abstract: This study involved 15 online workshops that brought 15 economists from a range of institutions together with 55 members of the public in conversations about economic concepts and statistics. The aim was to bring economists closer to public perspectives on the economy and encourage them to reflect on what they learned and how these insights could improve how they communicated with the public in the future. The report's main finding is that the economists involved believed the workshop format fulfilled that aim. They advocated for more similar or extended exercises to reach a wider group of economists. They argued that all economists and economic organisations should take collective responsibility for bringing economists and the public closer together. In addition, there needs to be a debate about what level of economic knowledge would enable members of the public to fulfil their citizenship roles. More specific findings included economists' reflections that public perceptions in the workshops in many cases confounded their expectations and that people simply view the economy from a different, personal perspective relying on their own experiences. The economists considered developing communication strategies that were simpler and more relatable, emphasising context and narrative instead of figures. Finally, the economists argued it would be a challenge to implement improvements in public understanding and communication in practice, due to the complex way their communication filters through the media as intermediaries, pointing to the need for further studies on the relationship between economists and journalists
    Keywords: communication, economic statistics, public engagement, public understanding
    JEL: D83 Z00
    Date: 2021–12
  5. By: Edward Nelson
    Abstract: The pickup in the U.S. inflation rate to its highest rates in forty years has led to renewed attention being given to the Great Inflation of the 1970s. This paper asks with regard to the Great Inflation: “How did it happen?” The answer offered is the fact that, in both the United Kingdom and the United States, monetary policy and other policy instruments were guided by a faulty doctrine—a nonmonetary view of inflation that perceived the concerted restraint of aggregate demand as both ineffective and unnecessary for inflation control. In the paper’s analysis, the difference in the economic policy doctrine in the 1970s from that prevailing in more recent decades is represented algebraically, with this representation backed up by documentation of policymakers’ views. A key conclusion implied by the analysis is that the fact that a nonmonetary perspective on inflation is no longer prevalent in policy circles provides grounds for believing that monetary policy in the modern era is well positioned to prevent the recurrence of *entrenched* high inflation rates of the kind seen in the 1970s.
    Keywords: Great Inflation; Phillips curve; Monetary policy doctrine; Monetary policy strategy
    JEL: E58 E52
    Date: 2022–06–03
  6. By: Howard Glennerster
    Abstract: It has been suggested that the COVID epidemic, and its profound economic and social consequences, may produce major changes in the dominant ideas that help set the boundaries to social action. This note reflects on significant shifts that have taken place in the way collective action has been thought about at various stages in British history since the Second World War and the part that economic and demographic trends have played in prompting such changes. The periods it distinguishes are four: 1945-1976 the Post War Settlement'; 1976-1997 Constraint and Change; 1997-2010 An Expanded Welfare Role; 2010 to 2019 Austerity. These are familiar, if sometimes contested periods, but the paper seeks to distinguish both the continuities to be found in each period and the forces that stimulated change.
    Keywords: welfare state, post war
    Date: 2020–08
  7. By: Congiu, Luca; Moscati, Ivan
    Abstract: In 2008, the behavioral economist Richard Thaler and the legal scholar Cass Sunstein published a book in which they advocated a novel approach to public policy based on the notion of a “nudge.” Roughly speaking, a nudge is an intervention in the decisional context that steers people's decisions by acting on their cognitive biases. The notion of a nudge generated an intense debate across different disciplines and proved popular with many policy makers around the world. The present article reviews the debate and research on nudges by focusing on three main dimensions: (1) the exact definition of nudges; (2) the justification of nudge policies, with a focus on “libertarian paternalism”; and (3) the effectiveness of nudges, both over time and in comparison with standard policies.
    Keywords: behavioral welfare economics; boosts; bounded rationality; libertarian paternalism; nudge
    JEL: D01 D90 M31
    Date: 2022–02–01
  8. By: Paula Onuchic
    Abstract: This paper surveys the literature on theories of discrimination, focusing mainly on new contributions. Recent theories expand on the traditional taste-based and statistical discrimination frameworks by considering specific features of learning and signaling environments, often using novel information- and mechanism-design language; analyzing learning and decision making by algorithms; and introducing agents with behavioral biases and misspecified beliefs. This survey also attempts to narrow the gap between the economic perspective on "theories of discrimination" and the broader study of discrimination in the social science literature. In that respect, I first contribute by identifying a class of models of discriminatory institutions, made up of theories of discriminatory social norms and discriminatory institutional design. Second, I discuss the classification of discrimination as direct or systemic, and compare it to previous notions of discrimination in the economic literature.
    Date: 2022–05
  9. By: Bofinger, Peter; Geißendörfer, Lisa; Haas, Thomas; Mayer, Fabian
    Abstract: Joseph A. Schumpeter is one of the most famous economists of the 20th century and the 'patron saint' of the finance and growth literature. We have discovered that the prevailing literature has, however, misinterpreted Schumpeter, which leads to puzzling empirical results and difficulties in explaining even fundamental relationships. We argue that this is due to a misrepresentation of the role of banks and liquidity creation and the role of household saving. After a critical discussion of the literature, we provide our own empirical analysis using a panel of 43 countries to explore the relationships between the important variables of the finance and growth literature. Our empirical analysis above all supports Schumpeter's view that credit growth supports GDP growth while saving is irrelevant for credit growth and GDP growth. In sum, a correct interpretation of Schumpeter helps to overcome the theoretical and empirical challenges which confront the prevailing literature.
    Keywords: Finance-growth nexus,Finance,Financial development,Economic growth,Economic development,Financial intermediation,Bank credit,Liquidity creation,Saving
    JEL: B20 B22 C10 E44 F30 F43 G21 O11 O16 O4
    Date: 2022
  10. By: Gastón Caligaris
    Abstract: En el artículo se reconstruye y se muestra el debate marxista sobre la naturaleza y fuente del plusvalor extra apropiado por los capitales que introducen una innovación tecnológica. Hasta el presente, esta controversia ha sido tratada siempre como subsidiaria de otros debates. Sin embargo, su recurrencia y la evolución de los argumentos esgrimidos —en particular en las últimas décadas— muestran que tiene la entidad de un debate en sí mismo. Tras rastrear la presencia de esta controversia en distintos debates marxistas en contextos históricos e intelectuales diversos, se reúnen y sistematizan los argumentos presentados. En esencia, se identifican dos posiciones contrapuestas: por un lado, la que argumenta que el plusvalor extra es la representación del trabajo de los trabajadores empleados por el capital innovador; por otro lado, la que argumenta que se trata de la representación del trabajo empleado por otros capitales. En la medida en que los argumentos se apoyan en diversas lecturas de la obra de Marx, se dedica una sección a reunir y discutir la evidencia textual disponible. Finalmente, se realiza un breve balance crítico del debate en el que se concluye que la posición que argumenta en favor de transferencias de valor no implica recaer en una concepción naturalizadora del valor ni es incompatible con los fundamentos de la crítica marxiana de la economía política.
    Keywords: Plusvalor extra, Plusganancia, Trabajo potenciado, Transferencias de valor, Debate marxista, Teoría del valor.
    JEL: B14 B24 B51 O33 D46
    Date: 2021–07–01
  11. By: Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - UPMF - Université Pierre Mendès France - Grenoble 2 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble)
    Abstract: Economic science is an ideology that consecrates the omnipotence of the market economy, the police state and the management, often short-term, of an economy condemned to perpetual economic growth. With the Covid-19 pandemic, the analyses of liberal economists are losing their bearings, because the basic assumptions no longer have any concrete application in the face of a profound economic and social crisis. The economy now reveals its eminently political character. The international, national and local public sectors are organizing the fight against the crisis of the market economy. The State then becomes the central actor in the management of the national economy, in connection with the other States. The profoundly political and social character of a globalized economy highlights the violence of relations between states and citizens and often between states themselves. This situation of collective dependence is likely to create many tensions, which may lead to new conflicts or wars between states.
    Abstract: La science économique est une idéologie qui consacre l'omnipotence de l'économie de marché, l'Etat gendarme et le management, souvent de court terme, d'une économie condamnée à la croissance économique perpétuelle. Avec la pandémie de Covid-19, les analyses des économistes libéraux perdent leurs repères, car les hypothèses de base n'ont plus d'application concrète pour faire face à une profonde crise économique et sociale. L'économie révèle désormais son caractère éminemment politique. Les secteurs publics internationaux, nationaux et locaux organisent la lutte contre la crise de l'économie de marché. L'État devient alors l'acteur central de la gestion de l'économie nationale, en lien avec les autres Etats. Le caractère profondément politique et social d'une économie mondialisée met en évidence la violence des relations entre les gouvernements et les citoyens et souvent entre les Etats eux-mêmes. Cette situation de dépendance collective est susceptible de créer de nombreuses tensions, lesquelles peuvent conduire à de nouveaux conflits ou guerres.
    Keywords: Economics,international organizations,multinational firms,financial capitalism,pandemic,social inequalities,economic warfare,military conflicts
    Date: 2022–01–17
  12. By: Avner Greif (Stanford University); Jared Rubin (Chapman University)
    Abstract: Political legitimacy has long been recognized in the social sciences as an integral component of governance. It encourages obedience without the threat of force, thus lowering governing costs and improving the efficacy of policies. This chapter begins by overviewing the extensive literature on political legitimacy, classifying studies by whether they are based on the beliefs (regarding the legitimacy of the authority) or effectiveness (good governance is legitimate governance). Among the studies focusing on beliefs, most take legitimacy as an exogenous element of political authority. We develop a conceptual framework to study how beliefs regarding political legitimacy form endogenously and impact political power, institutions, and policies. We conclude with numerous examples from historical political economy that reveal the usefulness of this framework.
    Keywords: political legitimacy; beliefs; endogenous legitimacy; legitimacy principle
    JEL: B15 H11 N30 N40 N43 Z1
    Date: 2022

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