nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2022‒10‒17
four papers chosen by
Erik Thomson
University of Manitoba

  1. How economics can help mitigate climate change - a critical review and conceptual analysis of economic paradigms By Wolf Rogowski; Wolfram Elsner
  2. Temporal Patterns in Economics Research By Andrei Dubovik; Clemens Fiedler; Alexei Parakhonyak
  3. Philosphers and Economists Can Agree on the Intergenerational Discount Rate and Climate Policy Paths By Frikk Nesje; Moritz A. Drupp; Mark C. Freeman; Ben Groom
  4. Manfred Deistler and the General Dynamic Factor Model Approach to the Analysis of High-Dimensional Time Series By Marc Hallin

  1. By: Wolf Rogowski; Wolfram Elsner
    Abstract: In economic research about climate change mitigation, there is a tension between the objectives to ensure scientific rigor (focusing on orthodox theory) and to illuminate blind spots of relevance (drawing on different "heterodox" theories). Our aim is to develop an economic perspective on climate change mitigation which considers both objectives. We conduct a critical literature review, searching for coherent economic theory lattices, which meet the requirements of research programs, i.e. contain a pre-analytic vision, an analytical core including a concept of rationality, and examples of applications in empirical research. We develop a framework structuring these research programs and associated research fields and search for examples illustrating their applicability to climate change mitigation. We identify several research fields within four major research programs that perceive economic phenomena as (1) individual optimization decisions (neoclassical analysis of efficient and of inefficient equilibria and behavioral economics); (2) a set of institutions (New and Original institutional economics); (3) a complex evolutionary system (Biophysical and Evolutionary economics); and (4) an objective function (which can guide research focusing on the content or the distribution of the normatively defined units of interest). For each research program and its subdivisions, we present theoretical elements and illustrate how they can improve our understanding of how economic activity contributes to climate change and how these impacts can be alleviated. There is a need for more systematic evidence synthesis to validate the contributions of the different economic research fields and to improve their selection and application to climate change.
    Keywords: Climate change, neoclassical economics, behavioral economics, economic heterodoxies, evolutionary economics, institutional economics, objective functions, research programs, policy implications.
    JEL: A11 A12 B5 H41 Q54
    Date: 2021–08
  2. By: Andrei Dubovik (CPB Netherlands Bureau for Economic Policy Analysis); Clemens Fiedler; Alexei Parakhonyak (University of Oxford)
    Abstract: We study the duration of topics in economics research by looking at how much time passes between publication of textually similar papers. Using the corpus of abstracts of economics papers, as available from the RePEc dataset, we find that most papers match to papers from the same year, indicating strong common trends in the economics literature. Nevertheless, matches as long as 14 years apart are statistically significant, suggesting there are topics that last as long. Finally, the average duration of a match has dropped from around 4 years during 1990–2005 to about 1 year starting in 2010.
    JEL: A14 B20 Z13
    Date: 2022–09
  3. By: Frikk Nesje; Moritz A. Drupp; Mark C. Freeman; Ben Groom
    Abstract: The estimated values to society from long-term public projects, including climate change mitigation and infrastructure construction, are highly sensitive to the social discount rate (SDR) employed. Governmental guidance on social discounting has predominantly been based on input from expert economists. It is not clear, however, that economists possess any special expertise on the ethical issues that underpin long-term societal decision-making. This study compares expert economists’ views on key components of the long-term SDR with those of a disciplinary group of experts who may be deemed most trained on ethical matters: philosophers. The results indicate that both expert groups provide surprisingly similar recommendations on these components and on the SDR itself, with a real SDR recommendation of 2% receiving most support in both disciplines. An analysis of qualitative remarks shows areas of broad agreement and yet distinct differences in rationales. While economists provide numerous technical extensions within a consequentialist Discounted Utilitarian approach, philosophers advocate more strongly for alternative ethical approaches to standard Utilitarian calculus. In the politicized world of long-term decision-making, this paper illustrates how more inclusive and deliberative approaches to complex issues such as intergenerational justice can guide more nuanced decision-making today and lead to multidisciplinary support for climate action.
    Keywords: intergenerational social discounting, expert survey, philosophy, economics, climate policy
    JEL: C83 D61 H43 Q58
    Date: 2022
  4. By: Marc Hallin
    Abstract: For more than half a century, Manfred Deistler has been contributing to the construction of the rigorous theoretical foundations of the statistical analysis of time series and more general stochastic processes. Half a century of unremitting activity is not easily summarized in a few pages. In thisshort note, we chose to concentrate on a relatively little-known aspect of Manfred’s contribution which nevertheless had quite an impact on the development of one of the most powerful tools of contemporary time series and econometrics: dynamic factor models.
    Keywords: High-dimensional time series, General Dynamic Factor Models, spiked covariance model, reduced-rank process.
    Date: 2022–09

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