nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2023‒05‒15
eight papers chosen by
Erik Thomson
University of Manitoba

  1. The 'View from Manywhere': Normative Economics with Context-Dependent Preferences By Guilhem Lecouteux; Ivan Mitrouchev
  2. The Homer Economicus Narrative: From Cognitive Psychology to Individual Public Policies By Guilhem Lecouteux
  3. Understanding the paradox of control and freedom of consumption under digital capitalism with Stafford Beer's cybernetic theory By Hannah Bensussan
  4. Neuroeconomics Hype or Hope? An Answer By Alexandre Truc
  5. The Disciplinary Mobility of Core Behavioral Economists By Alexandre Truc
  6. Gold Rush vs. War: Keynes and the Economics of Digging Holes By Michele Bee; Raphaël Fèvre
  7. Economics Peer-Review: Problems, Recent Developments, and Reform Proposals By Siemroth, Christoph
  8. Open Mouth Operations. Monetary Policy by Threats and Arguments. The Monthly Meetings Between the Riksbank and the Commercial Banks, 1956-73 By Jonung, Lars

  1. By: Guilhem Lecouteux (Université Côte d'Azur; GREDEG, CNRS, France); Ivan Mitrouchev (IESEG School of Management, iRisk, France)
    Abstract: We propose a methodology for normative economics in presence of contextdependent preferences. The key feature of our approach is to locate normative authority, not in the synoptic and third-person judgement of the social planner ('view from nowhere'), nor in the first-person judgement of the individual ('view from somewhere'), but in the second-person ability of the individual to confront conflicting judgements across contexts ('view from manywhere'). We offer a precise definition of context-dependence and detail our own proposition. We formulate a normative criterion of self-determination and advance two complementary justifications, interpreting the view from manywhere either as an extension of Sugden's opportunity criterion, or as an application of Sen's positional views in his theory of justice.
    Keywords: normative economics, social planner, context-dependent preferences, second-person standpoint, behavioural public policy
    JEL: D63 D90 I31
    Date: 2022–09
  2. By: Guilhem Lecouteux (Université Côte d'Azur; GREDEG, CNRS, France)
    Abstract: A common narrative among some behavioural economists and policy makers is that experimental psychology highlights that individuals are more like Homer Simpson than the Mr Spock imagined by neoclassical economics, and that this justifies policies aiming to 'correct' individual behaviours. This narrative is central to nudging policies and suggests that a better understanding of individual cognition will lead to better policy prescriptions. I argue that this Homer economicus narrative is methodologically flawed, and that its emphasis on cognition advances a distorted view of public policies consisting in fixing malfunctioning individuals, while ignoring the possibly malfunctioning environment within which they evolve.
    Keywords: Homer Simpson and Mr Spock; homo economicus; rational choice; replication crisis; behaviourally informed policy
    JEL: A12 B41 C91 D04 D91
    Date: 2022–09
  3. By: Hannah Bensussan (CEPN - Centre d'Economie de l'Université Paris Nord - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord)
    Abstract: Studies on the digitalization of markets and economic relations provide contrasting statements on its impact on consumers: it seems to have enhanced both control and freedom of these actors. This paper proposes to understand this paradox through the lens of Stafford Beer's cybernetic theory. We read the literature on digitalization and consumption at the light of Beer's concepts of regulated variety, regulatory variety and recursion, three concepts at the source of Beer's understanding of control and freedom. These concepts, we argue, allow to show the conditioned rise of consumers' freedom to the purpose of control in capitalist orders, i.e., commodity circulation and capital accumulation.
    Keywords: Control, freedom, consumption, digital capitalism
    Date: 2023–03–29
  4. By: Alexandre Truc (Université Côte d'Azur, CNRS, GREDEG, France)
    Abstract: In June of 2010, a special issue in the Journal of Economic Methodology was introduced with the question "Neuroeconomics: hype or hope?" (Marchionni and Vromen, 2010). More than ten years later, we think it is time to provide an answer. Using a variety of sources ranging from Web of Science to Econlit, we assess the importance of neuroeconomics as a research program in economics. We show that after a very rapid increase in interest in the early 2000s, neuroeconomics decreased in importance after the 2010s especially when compared to the continuing rise of behavioral economics. After exploring a few explanations regarding this decreasing interest, we compare neuroeconomics and behavioral economics to emphasize key points in the ways these two programs at the frontiers of economics were constructed. Most notably, we show that neuroeconomists were more confrontational in their approach of economics, more focused on programmatic writings with few theoretical contributions, and more importantly, more oriented towards neurosciences than economics. Overall, we do find that the first 20 years of neuroeconomics as a research program in itself can be qualified to be more hype than hope.
    Keywords: Interdisciplinarity, Neuroeconomics, Behavioral Economics, Psychology, Neuroscience
    Date: 2022–08
  5. By: Alexandre Truc (Université Côte d'Azur, CNRS, GREDEG, France)
    Abstract: Disciplinary mobility occurs when researchers publish outside their disciplines of origin. It is an important mechanism of interdisciplinarity and knowledge transfer. New behavioral economics (BE) was founded by two psychologists, Daniel Kahneman and Amos Tversky, who used disciplinary mobility to influence economics. In this article, we study the disciplinary mobility of seven core behavioral economists to better understand how it has influenced the early development of BE and the interdisciplinary practices of later behavioral economists. Besides the movement of psychologists towards the center of economics, we identify an outward movement of economists away from the discipline. This movement away from economics has allowed some behavioral economists to gain new scientific legitimacy, while escaping some of the normative traditions of economics. This has enabled them to push the frontiers of economics and promote a more radical approach to BE.
    Keywords: Behavioral Economics, Interdisciplinarity, Social Network Analysis
    Date: 2022–08
  6. By: Michele Bee (CEDEPLAR, Universidade Federal de Minas Gerais, Brazil); Raphaël Fèvre (Université Côte d'Azur, CNRS, GREDEG, France)
    Abstract: This paper aims to fully exploit the heuristic virtues of Keynes' famous ‘old bottles' story, deploying a multi-layered argument and drawing out its broadest implications. We show that with this story Keynes was making a very serious point about anti-crisis policies: the need for authorities to stimulate animal spirits by relying on people's natural impulse to action. Rather than taking the place of entrepreneurs and paying people to dig holes, Keynes seems to be arguing that public authorities should put entrepreneurs in a situation where they are so enthusiastic that they go into debt to dig holes, just like during a gold rush. At the same time, it is a question of restoring the banks' willingness to lend for these over-optimistic projects in a period of depression. This article explores the conditions that make public intervention as effective as possible through the enthusiasm and individual initiative that can be generated by an artificial gold rush. Such intervention therefore can be as minimal as possible, without having to resort to the opposite authoritarian solution of war. Since the gold rush builds cities and wars destroy them, Keynes spent considerable energy convincing his contemporaries that liberal-democratic countries would have to take the former path if they wanted to avoid the latter.
    Keywords: Slump, Keynesian Multiplier, Animal Spirits, Artificial Gold-Rush, War
    Date: 2022–08
  7. By: Siemroth, Christoph
    Abstract: This article contributes to the debate in the economics profession on reforming the peer-review process. It examines the current state of peer-review in economics, surveys the relevant literature, and identifies several problems and solutions. Problems to be discussed are referee overreach and excessive revisions, strategic refereeing and conflicts of interest, prestige bias and other discrimination, and the noisy outcome of peer-review. It recommends several solutions for reform. First, enforce referee guidelines that reports must explicitly separate their suggestions into essential and optional, with 3 essential maximum. Second, let authors award the best referee report. Third, adopt conflict of interest policies for referees and punish non-disclosure. Fourth, use double-blind refereeing. Fifth, make better use of prior reports from other journals. Sixth, pay referees for prompt reports. A discussion of the role of editors highlights additional issues that deserve a debate in the profession.
    Keywords: Conflicts of Interest; Excessive Revisions; Peer-Review; Prestige Bias; Publication Process; Referee Overreach; Reform; Survey
    Date: 2023–04–27
  8. By: Jonung, Lars (Department of Economics, Lund University)
    Abstract: After World War II and prior to the financial deregulation of the 1980s, monetary policy in Sweden as well as in other western European countries rested chiefly on a system of far- reaching non-market-oriented controls of credit flows and interest rates. How was monetary policy conducted in such an environment of financial repression, where the central bank was unable to rely on traditional monetary policy instruments working on "free" and "unregulated" money and capital markets?<p> This study provides an answer from the Swedish experience. It is based on a unique set of confidential minutes from about 160 monthly meetings between the Riksbank and the commercial banks during the years 1956-73. These minutes, written during or directly after the meetings, have not been available to scholars before. Most likely, a similar archive material does not exist for any other country.<p> The examination of the minutes demonstrates that monetary policy was framed in a process involving threats and arguments in a small and closed club involving the central bank and the chief executives of the commercial banks. According to a joke assigned to Erik Lundberg “open market operations were replaced by open mouth operations” - albeit the dialogue was kept within the club.<p> When Swedish financial markets were deregulated in the 1980s, the standard tools of monetary policy rapidly replaced the meetings between the central bank and the commercial banks. Today, the Riksbank communicates in an open way to all financial market participants, instead of turning to a small set of commercial bankers in meetings closed to outsiders.
    Keywords: Credit controls; interes rate controls; exchange controls; financial repression; liquidity ratios; the Riksbank; Sweden
    JEL: B22 E42 E50 E58 E65 G21 N14
    Date: 2023–04–24

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