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on Heterodox Microeconomics |
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Issue of 2016‒07‒30
twelve papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | Ron Boschma, Lars Coenen, Koen Frenken, Bernhard Truffer; Lars Coenen; Koen Frenken; Bernhard Truffer |
| Abstract: | This paper aims to develop a theoretical framework on regional diversification. Combining insights from the evolutionary economic geography literature and the transition literature, we argue that a theory of regional diversification should build on the current understanding of conditions for related diversification but additionally start to tackle processes of unrelated diversification by accounting for (1) the role of agency (institutional entrepreneurship) and the dynamic interplay between agency and context; (2) enabling and constraining factors at various spatial scales. We propose a typology of four regional diversification processes by cross-tabulating related versus unrelated diversification with niche creation versus regime adoption. |
| Keywords: | evolutionary economic geography, transition studies, regional diversification, unrelated diversification, institutional entrepreneurship, institutional change |
| JEL: | B52 O18 R11 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1617&r=hme |
| By: | Simón Gil Arango; Juan Sebastián Cubillos; Guillermo Andrés Martínez Medina |
| Abstract: | El presente documento comprende una revisión de la historia y consolidación de la actividad minera en Colombia y su institucionalidad desde los primeros años de la colonia hasta la primera década del siglo XXI. Así, se desarrolla una revisión crítica del cambio de las formas sociales de producción y el rol del Estado colombiano en la regulación de esta actividad económica, incluidos los cambios en los derechos de propiedad del subsuelo desde los primeros esfuerzos de consolidación de un proyecto político independentista. Se incorporan elementos historiográficos para facilitar la lectura de un periodo tan amplio entre los cuales se destacan: el periodo colonial, periodo de las primeras repúblicas, industrialización clásica, la mineralización dirigida por el Estado (1973-1991), una transición y la apertura minera (2001-2013). El artículo cuestiona la veracidad histórica de la existencia de un paradigma de desarrollo a partir de una vocación minera y pone en evidencia la permanencia de los lazos y formas institucionales coloniales en la consolidación del sector así como también la incapacidad de gestionar algunos aspectos centrales de la actividad económica en mención. |
| Keywords: | Institucionalismo, minería, tradición, historia. |
| JEL: | B52 N5 N56 |
| Date: | 2016–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:col:000176:014831&r=hme |
| By: | Andy Stirling (Professor of Science & Technology Policy, University of Sussex, UK) |
| Abstract: | Equally at national and the highest international levels, few issues in technology governance are more vexed than those around the precautionary principle. Often using colourful rhetoric – and frequently paying scant attention to the substantive form taken by precaution in any given setting, even ostensibly academic analyses accuse precautionary approaches of being ‘dangerous’, ‘arbitrary’, ‘capricious’ and ‘irrational’ – somehow serving indiscriminately to ‘stifle discovery’, ‘suppress innovation’ and foster an 'anti-technology’ climate. The widely advocated alternative is ‘science based’ risk assessment – under which single aggregated probabilities are assigned to supposedly definitively-characterised possibilities and asserted to offer sufficient representations of the many intractable dimensions of uncertainty, ambiguity and ignorance. The high economic and political stakes combine with their expediency to entrenched institutional and technological interests, to intensify these arguments. Amidst all the noise, it is easy to miss the more balanced, reasonable realities of precaution. By reference to a large literature on all sides of these debates, this paper shows how these pressures are not only misleading, but themselves seriously unscientific – leading to potentially grave vulnerabilities. Experience over more than a century in technology governance, shows that the dominant issues are not about calculation of probabilities, but about the effects of power in innovation and regulatory systems, the need for balanced consideration of alternative options, scrutinising claimed benefits as much as alleged risks and always being vigilant for the ever-present possibility of surprise. In this light, it is not rational to assert that incertitudes of many difficult kinds must always take the convenient forms susceptible to risk assessment. To invoke the name of science as a whole, in seeking to force such practices, is gravely undermining of science itself. And these pressures also seriously misrepresent the nature of innovation processes, in which the branching evolutionary dynamic means that concerns over particular trajectories simply help to favour alternative innovation pathways. Precaution is about steering innovation, not blocking it. It is not necessarily about ‘banning’ anything, but simply taking the time and effort to gather deeper and more relevant information and consider wider options. Under conditions of incertitude to which risk assessment is – even under its own definition – quite simply inapplicable, precaution offers a means to build more robust understandings of the implications of divergent views of the world and more diverse possibilities for action. Of course, like risk assessment, precaution is sometimes implemented in mistaken or exaggerated ways. But the reason such a sensible, measured approach is the object of such intense general criticism, has more to do with the pervasive imprints of power in and around conventional regulatory processes, than it does with any intrinsic features of recaution itself. Whilst partisan lobbying is legitimate in a democracy as a way to advance narrow sectoral interests, it is unfortunate when such rhetorics seek spuriously to don the clothing of disinterested science and reason in the public interest. Taking the best of all approaches, this paper ends by outlining a general framework under which more rigorous and comprehensive precautionary forms of appraisal, can be reconciled with riskbased approaches under conditions where these remain applicable. A number of practical implications arise for innovation and regulatory policy alike, spanning many different sectors of emerging technologies. In the end, precaution is identified to be about escaping from technocratic capture under which sectoral interests use narrow risk assessment to force particular views of the world. What precaution offers to enable instead is more democratic choice under ever-present uncertainties, over the best directions to be taken by innovation in any given field. |
| Keywords: | risk assessment, uncertainty, precaution, technology governance, direction of innovation |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2016-14&r=hme |
| By: | Donal O'Neill (Department of Economics, Finance and Accounting, Maynooth University.); Aedin Doris (Department of Economics, Finance and Accounting, Maynooth University.); Olive Sweetman (Department of Economics, Finance and Accounting, Maynooth University.) |
| Abstract: | During the Great Recession many Irish workers experienced nominal earnings cuts The proportion of all job stayers suffering earnings cuts trebled in the peak crisis years, with over 55% of workers receiving earnings cuts at the height of the crisis. However, while earnings cuts were common the evidence suggests substantial heterogeneity in earnings dynamics; at the same time as many workers were experiencing cuts, a substantial minority of workers continuing to receive earnings rises throughout the crisis. In this paper we use a unique dataset containing earnings data on every worker in every firm in Ireland from 2005-2013 to examine the relative role of worker and firm characteristics in explaining the observed heterogeneity in earnings dynamics. Our results show that firm effects play a smaller role in determining pay changes in Ireland. Although firm effects become more important in the peak year of the economic crisis, even then the vast majority of earnings changes continue to be driven by within firm rather than between firm forces. These finding raise a number of important questions about the role of morale and fairness in the wage setting process. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n272-16.pdf&r=hme |
| By: | Jean-Luc Gaffard (Observatoire français des conjonctures économiques) |
| Abstract: | L’Union Européenne et plus particulièrement la zone euro se sont construites au cours du dernier quart de siècle en appliquant une doctrine économique articulée autour de deux principes : la flexibilité des marchés de biens et du travail, la neutralité monétaire et budgétaire de l’action publique. C’est à un recul de la souveraineté des Etats auquel l’on a ainsi assisté au nom d’une certaine vision du libéralisme. Cette évolution institutionnelle est emblématique du paradoxe de la mondialisation (Rodrik 2011) qui veut que, faute d’un gouvernement mondial, la mondialisation des échanges requière une action des Etats réduite à l’application de règles intangibles édictées par la doctrine au détriment de la démocratie et des arbitrages que celle‐ci implique. Il n’y aurait pas d’alternative autre que le repli à l’abri des frontières nationales permettant éventuellement de sauvegarder le principe démocratique mais au détriment de l’expansion des échanges et, possiblement, de la croissance. Pourtant, la question de la souveraineté comme celle du libéralisme ne sauraient être tranchées aussi facilement. Un débat existe qui conduit à considérer qu’une alternative au modèle du moment est possible qui rétablit les Etats dans leurs prérogatives sans qu’il faille renoncer aux bénéfices de la mondialisation. |
| Keywords: | Liberalisme; Politique économique |
| JEL: | P1 P16 P17 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/22v67d4lc79f494i53l6lmau2v&r=hme |
| By: | Tomas Balint; Francesco Lamperti; Antoine Mandel; Mauro Napoletano; Andrea Roventini; Alessandro Sapio |
| Abstract: | We provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) diffusion of climate-friendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks. |
| Keywords: | climate change, climate policy, climate economics, complex systems, agent-based models, socio-economic networks |
| Date: | 2016–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2016/29&r=hme |
| By: | Uddin, Md Akther |
| Abstract: | Negative interest rate is quite a new phenomenon and many economists are quite puzzled by this new development after the global financial crisis of 2008/2009 and warned about its negative consequences. Whether negative interest rate can be considered as a Riba, literally interest rate, in Islamic finance is not settled yet. According to the classical text, the logic behind prohibition of interest rate, Riba, is actually inherent injustice; it may be to borrower or lender. There is no ruling or fatwa regarding negative interest rate. However, by following the analogy of injustice in Riba, we can argue that negative interest rate should be equated wtih Riba. One of the most controversial issues in current Islamic banking practice is that the return on Mudarabah investment deposits and interest rate on savings accounts are quite identical if not the same. Three key reasons for this paradox are briefly explained and number of measures has been recommended which might help delinking interest rate from profit rate. |
| Keywords: | negative interest rate, Riba, Islamic finance, mudarabah investment deposits |
| JEL: | E4 E5 P0 P00 |
| Date: | 2016–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72645&r=hme |
| By: | Itzhak Ben-DAVID (Ohio State University - Fisher College of Business, Finance Department; National Bureau of Economic Research (NBER)); Francesco A. FRANZONI (University of Lugano; Swiss Finance Institute); Rabih MOUSSAWI (Villanova University - Department of Finance; University of Pennsylvania - The Wharton School); John SEDUNOV III (Villanova University - Department of Finance) |
| Abstract: | Over the last four decades, the concentration of institutional assets in equity markets has increased dramatically. We conjecture that large institutions are granular, that is, they cannot be reduced to a collection of smaller independent entities. Hence, the paper studies whether large institutional ownership has a significant impact on asset prices. We provide evidence of a causal effect of ownership by large institutions on the volatility of their stock holdings. As a potential channel for this effect, we show that large institutions generate higher price impact than smaller institutions. Their trades are larger and concentrated on fewer stocks than those of smaller firms. Moreover, the investor flows to units within the same family are more correlated than the flows to independent entities. Finally, the effect of large institutions on volatility is unlikely to be related to improved price discovery, because the stocks owned by large institutions exhibit stronger price inefficiency. |
| Keywords: | Financial institutions, institutional investors, granularity |
| JEL: | G01 G12 G23 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp1567&r=hme |
| By: | Qun ZHANG (ETH Zurich); Qunzhi ZHANG (ETH Zurich); Didier SORNETTE (ETH Zurich and Swiss Finance Institute) |
| Abstract: | We augment the existing literature using the Log-Periodic Power Law Singular (LPPLS) structures in the log-price dynamics to diagnose financial bubbles by providing three main innovations. First, we introduce the quantile regression to the LPPLS detection problem. This allows us to disentangle (at least partially) the genuine LPPLS signal and the a priori unknown complicated residuals. Second, we propose to combine the many quantile regressions with a multi-scale analysis, which aggregates and consolidates the obtained ensembles of scenarios. Third, we define and implement the so-called DS LPPLS Confidence\textsuperscript{TM} and Trust\textsuperscript{TM} indicators that enrich considerably the diagnostic of bubbles. Using extensive synthetic signals, a detailed analysis of the "S\&P 500 1987" bubble and the application to 16 historical bubbles, we show that the quantile regression of LPPLS signals contributes useful early warning signals. The comparison between the constructed signals and the price development in these 16 historical bubbles demonstrates their significant predictive ability around the real critical time when the burst/rally occurs. |
| Keywords: | Financial bubble, Log-periodic power law singularity (LPPLS), Quantile regression, Early warning signals, Time scale, Probabilistic forecast |
| JEL: | C14 C21 C53 G01 G17 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp1543&r=hme |
| By: | Didier SORNETTE (ETH Zurich and Swiss Finance Institute); Guilherme DEMOS (ETH Zurich); Zhang QUN (ETH Zurich); Peter CAUWELS (ETH Zurich); Vladimir FILIMONOV (ETH Zurich); Qunzhi ZHANG (ETH Zurich) |
| Abstract: | The authors assess the performance of the real-time diagnostic, openly presented to the public on the website of the Financial Crisis Observatory (FCO) at ETH Zurich, of the bubble regime that developed in Chinese stock markets since mid-2014 and that started to burst in June 2015. The analysis is based on (i) the economic theory of rational expectation bubbles, (ii) behavioural mechanisms of imitation and herding of investors and traders and (iii) the mathematical formulation of the Log-Periodic Power Law Singularity (LPPLS) that describes the critical approach towards a tipping point in complex systems. The authors document how the real-time predictions were presented in the automated analysis of the FCO, as well as in our monthly FCO Cockpit report of June 2015. A complementary post-mortem analysis on the nature and value of the LPPLS methodology to diagnose the SSEC bubble and its termination is also given. |
| Keywords: | Financial bubbles, Crashes, Probabilistic forecast, Johansen-Ledoit-Sornette model, Log-periodic power law singularity (LPPLS), Advanced warning, Chinese bubbles, Financial crisis observatory |
| JEL: | F37 G01 G17 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp1532&r=hme |
| By: | Didier Sornette (ETH Zurich and Swiss Finance Institute); Guilherme Demos (ETH Zurich); Qun Zhang (ETH Zurich and South China University of Technology); Peter Cauwels (ETH Zurich); Vladimir Filimonov (ETH Zurich); Qunzhi Zhang (ETH Zurich) |
| Abstract: | The authors assess the performance of the real-time diagnostic, openly presented to the public on the website of the Financial Crisis Observatory (FCO) at ETH Zurich, of the bubble regime that developed in Chinese stock markets since mid-2014 and that started to burst in June 2015. The analysis is based on (i) the economic theory of rational expectation bubbles, (ii) behavioural mechanisms of imitation and herding of investors and traders and (iii) the mathematical formulation of the Log-Periodic Power Law Singularity (LPPLS) that describes the critical approach towards a tipping point in complex systems. The authors document how the real-time predictions were presented in the automated analysis of the FCO, as well as in our monthly FCO Cockpit report of June 2015. A complementary postmortem analysis on the nature and value of the LPPLS methodology to diagnose the SSEC bubble and its termination is also given. |
| Keywords: | Financial bubbles, Crashes, Probabilistic forecast, Johansen-Ledoit-Sornette model, Log-periodic power law singularity (LPPLS), Advanced warning, Chinese bubbles, Financial crisis observatory |
| JEL: | F37 G01 G17 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp1531&r=hme |
| By: | Kay, Rosemarie; Schlömer-Laufen, Nadine |
| Abstract: | (Why) does the sex ratio in top-management positions in large family and nonfamily businesses differ? Using a unique data set and estimating (fractional) logit regressions we show that the female share in top-management positions in family businesses exceeds the one in nonfamily businesses. One reason is the selection mechanism social homophily from which females in family businesses benefit more because of a higher female share in the decision making body in family businesses. Another reason is the pathway self-appointment as (co-) leader of one's own business which is more common in family businesses. Nepotism seems not to play a role. |
| Keywords: | gender diversity,top-management positions,family businesses,selection mechanisms,pathways into top-management |
| JEL: | J16 M14 M51 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:0216&r=hme |