nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2007‒12‒08
four papers chosen by
Karl Petrick
University of the West Indies

  1. The Role of Biology and Culture in Veblenian Consumption Dynamics. By C. Cordes
  2. Output Dynamics, Flow Equilibria and Structural Change – A Prolegomenon to Evolutionary Macroeconomics By U. Witt; T. Brenner
  3. (Non-) Behavioral Economics - A Programmatic Assessment By Werner Güth
  4. The relationship between saving and credit from a Schumpeterian perspective By Bertocco Giancarlo

  1. By: C. Cordes
    Abstract: This paper incorporates aspects of humans’ evolved cognition into a formal model of cultural evolution and scrutinizes their interactions with population-level processes. It is shown how the biased transmission of different kinds of behavior via cultural learning processes influences agents’ consumption behavior. Thereby, the model’s learning dynamics are capable of generating typical Veblenian consumption dynamics. Based on these insights, the paper then scrutinizes on the role of humans’ biological heritage and Darwinian concepts in the development of economic theories in general. Moreover, the relation of the ontological basis of biological and cultural evolution is addressed.
    Keywords: Conspicuous consumption, Economic theory development, Evolutionary economics, Darwinism, Cultural evolution Length 31 pages
    JEL: A12 B41 B52 C60 D11
    Date: 2007–11
  2. By: U. Witt; T. Brenner
    Abstract: In an evolutionary approach to macroeconomics, the market disequilibrium dynamics resulting from structural change need to be properly represented at the aggregate level. As suggested by the late F.A.Hayek, a suitable equilibrium concept required to this end as a frame of reference, is that of a flow equilibrium. The paper explores the corresponding flow dynamics that draw attention to variables not usually considered in macroeconomic theorizing. Using statistical estimates for these new variables for the West German manufacturing sector during the German unification process allows some important new insights on the relationships between structural change and macroeconomic performance.
    Keywords: Length 15 pages
    JEL: B52 D50 E00 E11 E32
    Date: 2007–11
  3. By: Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany)
    Abstract: Economic theory has evolved without paying proper attention to behavioral approaches, especially to social, economic, and cognitive psychology. This has recently changed by including behavioral economics courses in many doctoral study programs. Although this new development is most welcome, the typical topics of the behavioral economics courses are not truly behavioral. More specifically, we question whether eoclassical repairs or game fitting exercises as well as more or less mechanic adaptation processes qualify as behavioral approaches. To avoid criticizing without offering alternatives, we suggest some truly behavioral concepts, especially the satisficing approach.
    Keywords: (Un)Bounded rationality, Satisficing, Learning, Experimental and Behavioral Economics
    JEL: A11 B41 B52 C72 C91
    Date: 2007–12–04
  4. By: Bertocco Giancarlo (Department of Economics, University of Insubria, Italy)
    Abstract: Mainstream economic theory underlines the close relation between saving decisions and credit supply: the saving decisions determine the credit supply and thus the investment flow carried out by all the firms. The objective of this paper is to highlight the theoretical limits of this causal sequence on the basis of the arguments developed by Schumpeter, who instead maintains that in a capitalist economy the credit supply and investment decisions are independent of saving decisions JEL classification code: E21, E22, G20, O10. Key words: saving, credit, investment, development, Schumpeter
    Date: 2007–11

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