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on Heterodox Microeconomics |
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Issue of 2017‒07‒23
23 papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | VENEZIANI, Roberto; YOSHIHARA, Naoki |
| Abstract: | This paper analyses the Marxian theory of exploitation. The axiomatic approach standard in social choice theory is adopted in order to study the concept of exploitation - what it is and how it should be captured empirically. Two properties are presented that capture some fundamental Marxian insights. It is shown that, contrary to the received view, there exists a nonempty class of definitions of exploitation that preserve the relation between exploitation and profits – called Profit-Exploitation Correspondence Principle - in general economies with heterogeneous agents, complex class structures, and production technologies with heterogeneous labour inputs. However, among the main approaches, only the so-called ‘New Interpretation’ satisfies the Profit-Exploitation Correspondence Principle in general. |
| Keywords: | Exploitation, profits, axiomatic analysis |
| JEL: | B51 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-50&r=hme |
| By: | Tesfatsion, Leigh |
| Abstract: | Real-world economies are open-ended dynamic systems consisting of heterogeneous interacting participants. Human participants are decision-makers who strategically take into account the past actions and potential future actions of other participants. All participants are forced to be locally constructive, meaning their actions at any given time must be based on their local states; and participant actions at any given time affect future local states. Taken together, these properties imply real-world economies are locally-constructive sequential games. This study discusses a modeling approach, agent-based computational economics (ACE), that permits researchers to study economic systems from this point of view. ACE modeling principles and objectives are first concisely presented. The remainder of the study then highlights challenging issues and edgier explorations that ACE researchers are currently pursuing. |
| Date: | 2017–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201707110700001022&r=hme |
| By: | Rakesh Kochhar |
| Abstract: | This paper examines the state of the middle classes in the U.S. and 11 countries in Western Europe and how it has changed since 1991. Among Western Europe’s six largest economies, the shares of adults living in middle-income households increased in France, the Netherlands and the United Kingdom from 1991 to 2010, but shrank in Germany, Italy and Spain. France, the Netherlands and the UK also experienced notable growth in disposable household income, but incomes were either stagnant or falling in Germany, Italy and Spain. Ireland stands out as experiencing the most rapid growth in income from 1991 to 2010 and the biggest expansion of the middle class. Overall, the middle-class share fell in seven of the 11 Western European countries examined, mirroring the long-term shrinking of the middle class in the U.S. The decrease in the middle-class share is typically accompanied by a move up into the upper-income tier and a move down into the lower-income tier. |
| Keywords: | Income distribution,real income,inequality |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:702&r=hme |
| By: | Elveren, Adem Yavuz; Toksöz, Gülay |
| Abstract: | This study examines the gender dimension of the brain drain in Turkey to argue that gender inequality in sending countries can be a push factor for women. Considering how the political, social and cultural atmosphere damages gender equality in Turkey due to a shift toward a conservative, authoritarian regime over the last decade, the paper uses an online survey to analyze the gender gap in the return intentions of Turkish professionals and students living abroad. The findings clearly reveal a gender gap in return intentions regardless of other main factors such as age, study field/occupation or marital status. The study also highlights the significant correlation between the gender gap in migration decisions and gender inequality in Turkey’s labor market. |
| Keywords: | Brain drain, gender, skilled workers, students, migration |
| JEL: | F22 J16 J61 |
| Date: | 2017–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80290&r=hme |
| By: | Tewodros Makonnen Gebrewolde; James Rockey |
| Abstract: | This paper introduces a new measure of economic gender inequality (EGI) based on the ratio of women’s share of national labor income to men’s. This measure captures both the principles of equal pay for equal work and non-discrimination. Importantly, it can be calculated from existing data and is comparable across countries and time. We show that EGI has only been improving slowly and that current aggregate EGI is equivalent to 1.2 billion women working for nothing. Moreover, this gap is expected to increase in coming decades. Instrumental variable estimates suggest that while increases in income reduce EGI, living standards will have to triple for equality to be achieved in countries such as Mexico or Turkey. |
| Keywords: | Economic Gender Inequality, Global Distribution of Income, Modernization Hypothesis |
| JEL: | J16 J71 D33 O15 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:17/14&r=hme |
| By: | Eduardo Amaral Haddad; Carlos Alberto Gonçalves Junior, Thiago Oliveira Nascimento |
| Abstract: | This paper presents the process of estimation of an interregional input-output system for the 26 Brazilian states and the Federal District, in conditions of limited information, using the IIOAS method. IIOAS is consistent with the national input-output matrix and can be built for any country that publishes its SUTs, and has a regionalized sectoral information system. Subsequently, the commercial relations and productive structures of each state were analyzed. São Paulo and Rio de Janeiro were the most self-sufficient states. Roraima and Tocantins were the ones that presented the lowest levels of self-sufficiency. Regarding regional interdependence, Roraima and Acre were the states whose production showed less dependence on the final demand of other states, whereas Amazonas, Espírito Santo and Mato Grosso were the states in which the final demand of other states and exports exert most influence in the local production. |
| Keywords: | input-output; interregional; limited information |
| JEL: | C67 D57 R15 |
| Date: | 2017–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2017wpecon09&r=hme |
| By: | Grillitsch, Markus (KEG, Lund University); Asheim, Bjorn (University of Stavanger); Trippl, Michaela (University of Vienna) |
| Abstract: | The paper engages in a critical discussion of the related variety – regional branching argument and foregrounds a more differentiated perspective on regional industrial path development. It contributes by i) sharpening the definition of key concepts, namely specialisation and diversity, related and unrelated variety, ii) discussing their relevance in local and non-local spaces, iii) scrutinizing related variety as source for regional branching, and iv) developing a conceptual framework capturing the opportunity space for regional structural change that unveils the relevance of path upgrading, path importation, path branching, path diversification, and new path creation as different forms of new path development. |
| Keywords: | industrial path development; economic diversification; regional structural change; specialisation and diversity; related and unrelated variety; knowledge base combinations |
| JEL: | B52 O10 R10 R58 |
| Date: | 2017–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2017_010&r=hme |
| By: | Charles D. Brummitt; Kenan Huremovic; Paolo Pin; Matthew H. Bonds; Fernando Vega-Redondo |
| Abstract: | Poor economies not only produce less; they typically produce things that involve fewer inputs and fewer intermediate steps. Yet the supply chains of poor countries face more frequent disruptions---delivery failures, faulty parts, delays, power outages, theft, government failures---that systematically thwart the production process. To understand how these disruptions affect economic development, we model an evolving input--output network in which disruptions spread contagiously among optimizing agents. The key finding is that a poverty trap can emerge: agents adapt to frequent disruptions by producing simpler, less valuable goods, yet disruptions persist. Growing out of poverty requires that agents invest in buffers to disruptions. These buffers rise and then fall as the economy produces more complex goods, a prediction consistent with global patterns of input inventories. Large jumps in economic complexity can backfire. This result suggests why "big push" policies can fail, and it underscores the importance of reliability and of gradual increases in technological complexity. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1707.05914&r=hme |
| By: | Bichler, Shimshon; Nitzan, Jonathan |
| Abstract: | According to the theory of capital as power, capitalism, like any other mode of power, is born through sabotage and lives in chains – and yet everywhere we look we see it grow and expand. What explains this apparent puzzle of 'growth in the midst of sabotage'? The answer, we argue, begins with the very meaning of ‘growth’. Whereas conventional political economy equates the growth with a rising standard of living, we posit that much of this growth has nothing to do with livelihood as such: it represents not the improvement of wellbeing, but the expansion of sabotage itself. Building on this premise, the article historicizes, theorizes and models the relationship between changes in hierarchical power and sabotage on the one hand and the growth of energy capture on the other. It claims that hierarchical power is sought for its own sake; that building and sustaining this power demands strategic sabotage; and that sabotage absorbs a significant proportion of the energy captured by society. From this standpoint, capitalism grows, at least in part, not despite or because of sabotage, but through sabotage. |
| Keywords: | casp,energy,growth,hierarchy,sabotage |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:capwps:201702&r=hme |
| By: | Ignazio Musu (Department of Economics, University Of Venice Cà Foscari) |
| Abstract: | Economic growth since the industrial era has reduced poverty and increased societies’ quality of life, but it also has implied negative environmental effects. There is an urgent need to correct this structural unbalance. The open issue is whether this correction implies sacrificing the perspective of economic growth or if it can be achieved by maintaining economic growth though changing its nature in a more environment oriented direction. In the following I argue that this second strategy is preferable and also more realistic, but it requires an appropriate combination of conditions and policies to be implemented. Environmental regulation, particularly through the use of appropriate price signals correcting negative environmental externalities, is necessary, but not sufficient to promote the required radical environment oriented innovations, particularly to build a low-carbon economy less and less dependent on fossil fuels. Environment oriented innovation policies are required, supported by a system of social norms and by a polycentric system of governance. |
| Keywords: | Economic growth, green economy, sustainable development |
| JEL: | O44 Q54 Q55 Q56 Q57 Q58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2017:12&r=hme |
| By: | Sylvain Barde; Sander van der Hoog |
| Abstract: | Despite recent advances in bringing agent-based models (ABMs) to the data, the estimation or calibration of model parameters remains a challenge, especially when it comes to large-scale agent-based macroeconomic models. Most methods, such as the method of simulated moments (MSM), require in-the-loop simulation of new data, which may not be feasible for such computationally heavy simulation models. The purpose of this paper is to provide a proof-of-concept of a generic empirical validation methodology for such large-scale simulation models. We introduce an alternative 'large-scale' empirical validation approach, and apply it to the Eurace@Unibi macroeconomic simulation model (Dawid et al., 2016). This model was selected because it displays strong emergent behaviour and is able to generate a wide variety of nonlinear economic dynamics, including endogenous business- and financial cycles. In addition, it is a computationally heavy simulation model, so it ts our targeted use-case. The validation protocol consists of three stages. At the first stage we use Nearly-Orthogonal Latin Hypercube sampling (NOLH) in order to generate a set of 513 parameter combinations with good space-filling properties. At the second stage we use the recently developed Markov Information Criterion (MIC) to score the simulated data against empirical data. Finally, at the third stage we use stochastic kriging to construct a surrogate model of the MIC response surface, resulting in an interpolation of the response surface as a function of the parameters. The parameter combinations providing the best fit to the data are then identified as the local minima of the interpolated MIC response surface. The Model Confidence Set (MCS) procedure of Hansen et al. (2011) is used to restrict the set of model calibrations to those models that cannot be rejected to have equal predictive ability, at a given confidence level. Validation of the surrogate model is carried out by re-running the second stage of the analysis on the so identified optima and cross-checking that the realised MIC scores equal the MIC scores predicted by the surrogate model. The results we obtain so far look promising as a first proof-of-concept for the empirical validation methodology since we are able to validate the model using empirical data series for 30 OECD countries and the euro area. The internal validation procedure of the surrogate model also suggests that the combination of NOLH sampling, MIC measurement and stochastic kriging yields reliable predictions of the MIC scores for samples not included in the original NOLH sample set. In our opinion, this is a strong indication that the method we propose could provide a viable statistical machine learning technique for the empirical validation of (large-scale) ABMs. |
| Keywords: | Statistical machine learning; surrogate modelling; empirical validation |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1712&r=hme |
| By: | Alfredo J. Mainar Causape (European Commission - JRC); George Philippidis (Aragonese Agency for Research and Development (ARAID)); Ana Isabel Sanjuán (Agrifood Research and Technology Centre of Aragón (CITA)) |
| Abstract: | This report characterises and profiles the biobased sectors in terms of their wealth generation characteristics for the entire EU region. To this end, Backward and Forward Linkages multipliers are calculated from a brand new set of EU Member States (MS) Social Accounting Matrix (SAM) benchmarked to 2010 with a large coverage of biobased activities. |
| Keywords: | European Union, Bioeconomy, Social Accounting Matrix, Backward and Forward Linkages, Employment Multiplier |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc106676&r=hme |
| By: | Uzcátegui, Carolina; Solano, Javier |
| Abstract: | The present study tries to qualitatively and quantitatively approach women's access to the most relevant hierarchical positions within a banking institution, specifically in the province of El Oro; Showing the different perceptions about the state of gender equity, personal visions, challenges and opportunities identified in this topic. We highlight the permanence of certain limitations and conditions of the authors related to these dynamics, but also showed the progress in aspects of presence and recognition of abilities and skills of women. Finally, with this study, it is hoped to be able to provide greater insights to the local society, to facilitate the understanding of this problem and the construction of a more equitable society. |
| Keywords: | leaderchip, gender equity, banking institution, hierarchical |
| JEL: | Z19 |
| Date: | 2015–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69840&r=hme |
| By: | Ricardo T. Fernholz; Robert Fernholz |
| Abstract: | We characterize the conditions under which rank-based systems of continuous semimartingales generate an asymptotic size distribution that satisfies Zipf's law. For a system that follows the strong form of Gibrat's law, with growth rates and volatilities that do not vary across rank, these conditions require that the system be conservative and complete, and are satisfied by many large systems of time-dependent ranked observations. We generalize Zipf's law to a less restrictive form in which a log-log plot of size versus rank does not have to be a straight line of slope -1, but rather has a tangent line of slope -1 at some point. Under certain regularity conditions, we show that the same conditions of conservation and completeness imply that rank-based systems that deviate from Gibrat's law in a specific but realistic manner generate an asymptotic size distribution that is quasi-Zipfian. Because many real-world systems that follow the strong form of Gibrat's law satisfy Zipf's law, and even more systems that do not follow the strong form of Gibrat's law are quasi-Zipfian, our results offer an explanation for the universality of Zipf's law. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1707.04285&r=hme |
| By: | Luigi Zingales |
| Abstract: | Neoclassical theory assumes that firms have no power of fiat any different from ordinary market contracting, thus a fortiori no power to influence the rules of the game. In the real world, firms have such power. I argue that the more firms have market power, the more they have both the ability and the need to gain political power. Thus, market concentration can easily lead to a “Medici vicious circle,” where money is used to get political power and political power is used to make money. |
| JEL: | G3 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23593&r=hme |
| By: | Cyrielle Poiraud |
| Abstract: | This paper focuses on Amartya Sen’s conception of equality regarding modern theories of justice. Starting from a question he considers crucial in this context, “Equality of what?”, which involves a conception of equality in terms of “space”, we move to the importance of a related issue: “Why equality?”, which refers to a more general idea of equality, implicit in Sen’s work. The paper sheds light on this distinction and more precisely on the second acceptation of equality, deeply connected to the impartiality requirement of justice. Furthermore, Sen’s account of impartiality reveals the relevance of the transcendental approach for his own idea of justice, although he rejects it in favour of the comparative one. |
| Keywords: | Equality, Amartya Sen, Normative theories, Impartiality, Justice. |
| JEL: | A13 D63 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2017-20&r=hme |
| By: | Timothy Smeeding; Teresa Munzi |
| Abstract: | Social vulnerability due to insufficient income and earnings may come from many sources, both demographic and economic, in a globalizing world. This paper examines the problems of population aging, low wages, growing inequality, low work hours and insufficient social spending in Spain .Vulnerable groups such as children and the aged are considered. The paper will look at the United States, Canada, and Europe using the LIS (Luxembourg Income Study) database, and especially with a focus on Spain. For the first time we compare the similarities and differences between a set of Mediterranean LIS nations: Spain, Italy and Greece, compared to their European and OECD counterparts. We will assess the net effects of existing policies on poverty and inequality, and particularly the United Kingdom’s recent program to reduce child poverty. While best practices may be identified, each nation must create its own set of mutually supportive policies which provide protection against global economic forces while at the same time encouraging self effort and efficient behavior, especially in the labor market. In the end, policy can make a difference in outcomes, as shown by the recent British success in fighting child poverty. |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:448&r=hme |
| By: | Daniele Tori; Özlem Onaran |
| Abstract: | We estimate the effects of financialisation on physical investment in the developed and developing countries using panel data based on balance-sheets of publicly listed non-financial companies (NFCs) for the period 1995-2015. Among the developed economies, we focus on the cases of the USA, Japan, and a group of Western European countries. In the developing world, we present estimations based on the group of the NFCs in all developing countries as well as BRICS as a group- and country specific estimations for South Africa, South Korea, India, and China. We find robust evidence of an adverse effect of both financial payments (interests and dividends) and financial incomes on investment in fixed assets. The negative impacts of financial incomes are non-linear with respect to the companies' size; financial income crowds out investment in large companies, and have a positive effect on the investment of only smaller, relatively more credit-constrained companies. Our findings support the ‘financialisation thesis’ that the increasing orientation of the non-financial sector towards financial activities is ultimately leading to lower physical investment, hence to stagnant or fragile growth, as well as long term concerns for productivity in both developed and developing countries. |
| Keywords: | financialisation, investment, non-financial sector, firm data, developing countries |
| JEL: | C23 D22 O16 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1707&r=hme |
| By: | VENEZIANI, Roberto; YOSHIHARA, Naoki |
| Abstract: | An axiomatic analysis of the concept of unequal exchange (UE) between countries is developed in a dynamic general equilibrium model that generalises Roemer’s [22] economy with a global capital market. The class of UE definitions that satisfy three fundamental properties - including a correspondence between wealth, class and UE exploitation status - is completely characterised. It is shown that this class is nonempty and a definition of UE exploitation between countries is proposed, which is theoretically robust and firmly anchored to empirically observable data. The full class and UE exploitation structure of the international economy is derived in equilibrium. |
| Keywords: | Exploitation, classes, unequal exchange, international economy |
| JEL: | D63 F02 B51 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-49&r=hme |
| By: | Emanuele Russo |
| Abstract: | This paper presents a small-scale agent-based extension of the so-called neo-Kaleckian model. The aim is to investigate the emergence of Harrodian instability in decentralized market economies. We introduce a parsimonious microfoundation of investment decisions. Agents have heteroge- neous expectations about demand growth and set idiosyncratically their investment expendi- tures. Interactions occur through demand externalities. We simulate the model under different scenarios. First, when heterogeneity is ruled out, Harrodian instability is showed to emerge as for the aggregate model. Instead, when heterogeneity is accounted for, a stable dynamics with endogenous fluctuations arises. At the same time, in this second scenario, all the Keynesian implications are preserved, including the presence of macroeconomic paradoxes. Sensitivity analysis confirms the general robustness of our results and the logical consistency of the model. |
| Keywords: | Harrodian Instability, Agent-Based Models, Coordination Failures, Heterogeneous Expectations, Neo-Kaleckian model |
| Date: | 2017–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2017/17&r=hme |
| By: | Judge, George G.; Villas-Boas, Sofia B.; Fu, Quizi |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2017–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:qt2sr9g4n8&r=hme |
| By: | Bruno Lanz; Simon Dietz; Tim Swanson |
| Abstract: | The world is banking on a major increase in food production, if the dietary needs and food preferences of an increasing, and increasingly rich, population are to be met. This requires the further expansion of modern agriculture, but modern agriculture rests on a small number of highly productive crops and its expansion has led to a significant loss of global biodiversity. Ecologists have shown that biodiversity loss results in lower plant productivity, while agricultural economists have linked biodiversity loss on farms with increasing variability of crop yields, and sometimes lower mean yields. In this paper we consider the macro-economic consequences of the continued expansion of particular forms of intensive, modern agriculture, with a focus on how the loss of biodiversity affects food production. We employ a quantitative, structurally estimated model of the global economy, which jointly determines economic growth, population and food demand, agricultural innovations and land conversion. We show that even small effects of agricultural expansion on productivity via biodiversity loss might be sufficient to warrant a moratorium on further land conversion. |
| Keywords: | Agricultural productivity; biodiversity; endogenous growth; food security; land conversion; population |
| JEL: | N10 N50 O31 O44 Q15 Q16 Q57 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:17-08&r=hme |
| By: | Ewa Karwowski |
| Abstract: | This article reveals the processes of financialisation in the South African economy by tracing the sources and destinations of NFCs' liquidity. The paper argues that rather than the volume of NFCs' financial investment, the composition of financial assets is crucial to assess corporate financialisation in the country. Non-financial businesses in South Africa fundamentally transformed their investment behaviour during the 1990s, shifting from more productive uses such as trade credit towards highly liquid and potentially innovative (and therefore risky) financial investment. Following the direction of financial flows the article shows that – fuelled by foreign capital inflows – companies' financial operations contributed to the price inflation in South African property markets. |
| Keywords: | financialisation, emerging markets, financial instability, asset price volatility, heterodox economics |
| JEL: | B50 F30 F34 G01 G12 G15 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1708&r=hme |