nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2005‒05‒29
four papers chosen by
Karl Petrick
Leeds Metropolitan University

  1. Illusionary Finance and Trading Behavior By Malika, HAMADI; Erick, RENGIFO; Diego SALZMAN
  2. 05-04 "Rationality and Humanity: A View from Feminist Economics" By Julie A. Nelson
  3. Systems of Innovation and Underdevelopment: An Institutional Perspective By Oyelaran-Oyeyinka, Banji
  4. Business Cycle Model on the Basis of Method of Systems Potential (english version). By Grigorii Pushnoi

  1. By: Malika, HAMADI; Erick, RENGIFO; Diego SALZMAN
    Abstract: One important aspect of financial market is that there might be some traders that intentionally mislead other market participants by creating illusions in order to obtain a profit. We call this new concept illusionary finance. We present an analysis of how illusions can be created and disseminated in financial markets based on certain psychological principles that explain agents’ decisions under time pressure and polysemous signals. We develop a simple model that incorporates the illusions in the price formation process. Furthermore, using powerful simulations, we show how illusions can be incorporated, directly or indirectly, in the expected prices of the traders.
    Keywords: Illusionary Finance; Behavioral Finance; Evolutionary Finance; Neuroeconomics
    JEL: C32 C35 G10
    Date: 2004–09–15
  2. By: Julie A. Nelson
    Abstract: Does Rational Choice Theory (RCT) have something important to contribute to the humanities? Jon Elster and others answer affirmatively, arguing that RCT is a powerful tool that will lend clarity and rigor to work in the humanities just as it (presumably) has in economics. This essay examines the disciplinary values according to which the application of RCT in economics has been judged a “success,” and suggests that this value system does not deserve general approbation. Richness and realism must be retained as important values alongside precision and elegance, if anti-scientific dogmatism and absurd conclusions are to be avoided.
  3. By: Oyelaran-Oyeyinka, Banji (United Nations University, Institute for New Technologies)
    Abstract: This paper examines institutions and their role in supporting technical change as part of the development process, and asks how institutions shape the system of innovation (SI). The context of underdevelopment exhibits distinct system characteristics that differ markedly from those found under advanced economic conditions and as such deserves close empirical scrutiny. SIs differ significantly under the two sets of conditions, leading to uneven structural changes. The paper therefore explores what functions must be served by systems in developing countries in order to generate technical dynamism. To compare different contexts, it introduces the idea of a System of Learning Innovation in Development (SLID) that emphasizes individual and organizational competence building. The differences between “Advanced” Systems of Innovation (ASI) and two types of SLID are discussed. Infrastructure, one of the key components of institutions involved in development, is used as an illustration. The study found that dynamic SIs function best in a regime of high-quality infrastructure (telephone, Internet, computers and reliable electricity supplies). The case of sub-Saharan Africa serves to illustrate the point.
    Keywords: Innovation, Innovation Policy, Capacity Building, Learning, Economic Development, Infrastructure, Sub-Saharan Africa
    Date: 2005
  4. By: Grigorii Pushnoi (International Bogdanov Institute)
    Abstract: The new business cycle three-dimensional model is formulated on the basis of new system approach known as the Method of Systems Potential. Cyclical dynamics with catastrophe jumps (alike to N.Kaldor (1940) model) and some stochastic properties is described. Properties of such cycles are similar to the properties of the typical business cycle.
    Keywords: business cycle model, catastrophe theory, economic potential
    JEL: O P
    Date: 2005–05–25

This nep-pke issue is ©2005 by Karl Petrick. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.