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on Heterodox Microeconomics |
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Issue of 2019‒06‒17
seventeen papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | David Maddy (ProCredit Holding); Clara Mattei (Department of Economics, New School for Social Research) |
| Abstract: | We offer an interpretative framework to analyze a recurrent phenomenon of capitalism: working classes oft e n a ppro ve of polici es that are detrimental to their material conditions. We focus on the mechanism of t he diffusion of economic ideas from treatise to the domain of public opinion. The work of novelist Ayn Rand popularizes market liberal, inequality-based economic doctrines present in the work of Ludwig von Mises. We argue that the economic justification of inequalit y was successfully tra nsmit ted through the mechanism of pov ert y sha me that emerges out of Rand 's influential Atlas Shrugged. Through its didactic narrative and abusive language the reader is powerfully taught that if they are not successful in the market society, the reason lies in their own personal deficiency and inferiority. This conception is internalized chiefly through the emotion of shame. Through the mechanism of "ot hering " class solidarity breaks down and social demands languish, thus the unequal status quo is preserved. |
| Keywords: | Ayn Rand, Ludwig von Mises, Self-Help, American Conservative Movement , Poverty Shame |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1910&r=all |
| By: | Martin Lábaj; Paula Puskarova |
| Abstract: | Income and wealth inequalities, both between and within the advanced and developing countries,haveattracted much attention in current economic debates. Wage inequalities appear to play akeyrole in the generation of final inequalities in terms of households’ income, consumptionand wealth. In this paper, we propose a decomposition approach based on the input-output analysis that allows us to disentangle the effects on the final inequalities’levels into the contributions of various determinants. So far, the analysis of income and wealth inequalities measured by standard inequality indices, e.g. Gini coefficient, Theil index, has received limited space in the input-output analysis. This does not imply thatissuesof income and wealth inequalities havebeen ignored in this stream of research. The focus of the input-output research has however been directed into distinct aspectsof inequalities. In one way, researchers have put a lot of effort in the understanding how the income and wealthinequalities influence the structure of final demand of households,and eventuallygenerate ambivalent effects on production, value added and employment. Other stream of research in input-output analysis has paid a lot of attention to inequalities that arise from the distribution of income that goes to labour andcapital. We propose to calculate cross-industry and cross-country wage inequalities directly from the input-output tablesandanalyse the final inequality variations through the lens of changes in the inputs. Detailed industry-level data on employees’ wages linked to their hours worked and education attainments, which are covered bythe World input-output database, allow us to illustrate the application of proposed methodology on major advanced and developing countries in the world. The analysis contributes to solving the puzzle around the impactsof human capital and technological progress on income inequality but may shed also more light on the rising global inequalities unfolded by international trade and fragmentation of global value chains. |
| Keywords: | wage inequality, input-output analysis, world input-output database, global value chains |
| JEL: | C67 D57 D63 I24 |
| Date: | 2018–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:brt:depwps:014&r=all |
| By: | Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - UPMF - Université Pierre Mendès France - Grenoble 2 - UGA - Université Grenoble Alpes) |
| Abstract: | The mainstream of economics has a double implicit postulate: peace is a normal state and economic development reinforces this situation. However, if primitive, slave or colonialist predations have been philosophically condemned, military, economic or cultural power struggles remain very present in the modern world. Extreme greed as a social form of maximum profit performance cannot be the ultimate goal of human beings in the long run. Social inequalities are growing rapidly and the assets of a dozen families exceed those accumulated by the poorest half of humanity. The twentieth century has experienced both moments of extreme barbarism and wars and unquestionable epistemological leaps. Economics is an ideology that hides the reality of political economy. It develops hypotheses that encourage the more virulent forms of inequality. Wars have followed one another, the USSR has collapsed, economic crises have accelerated, financial bubbles are putting all of humanity in a precarious situation, the intervention of the State is still strongly criticized. Dominant thought, mathematical virtuosity and postulates are at the service of an economic system that is difficult to amend without the recognition of the utility of public goods. The US leadership is clearly established in terms of information, standards control and artificial intelligence, the European Union continues to weaken and be dependent, with a "Germanic" euro and public deficits that produce threatening internal crises for the stability of the political ensemble, and BRICS in situations of great precariousness and heterogeneous interests. In addition, several revolutions are announced, concerning the violent advance of digital technology and robotics, the excessive advance of monopolies and global oligopolies, the emergence of new forces advocating a social revolution, and the environmental and climate crisis. |
| Abstract: | Le courant dominant de la science économique fait un double postulat implicite : la paix est un état normal et le développement économique renforce cette situation. Pourtant, si les prédations primitives, esclavagistes ou colonialistes ont été philosophiquement condamnées, les rapports de force militaires, économiques ou culturels restent bien présents dans le monde moderne. La cupidité extrême comme forme sociale de la performance du profit maximal ne peut constituer, sur le long terme, le but ultime des êtres humains. Les inégalités sociales croissent rapidement et les patrimoines d'une dizaine de personnes dépassent ceux cumulés de la moitié la plus pauvre de l'humanité. Le XXe siècle a expérimenté à la fois des instants d'extrême barbarie et de guerres et des sauts épistémologiques incontestables. La science économique est une idéologie qui cache la réalité de l'économie politique. Elle développe des hypothèses qui sont autant d'encouragement aux formes plus virulentes des inégalités. Les guerres se sont succédées, l'URSS s'est effondrée, les crises économiques se sont accélérées, les bulles financières met l'ensemble de l'humanité en situation de précarité, l'intervention de l'Etat est toujours aussi fortement critiquée. La pensée dominante, la virtuosité mathématique et les postulats sont au service d'un système économique difficilement amendable sans la reconnaissance de l'utilité des biens publics. Le leadership américain est clairement établi en termes d'information, de contrôle des normes et d'intelligence artificielle, l'Union européenne ne cesse de s'affaiblir et d'être dépendante, avec un euro « germanique » et des déficits publics qui produisent des crises internes menaçantes pour la stabilité de l'ensemble politique et des BRICS en situation de grande précarité et d'intérêts hétérogènes . En outre, plusieurs révolutions sont annoncées, concernant l'avancée parfois violente du numérique et de la robotique, l'avancée excessive des monopoles et des oligopoles mondiaux, l'émergence de forces nouvelles prônant une révolution sociale, et la crise environnementale et climatique. |
| Keywords: | Political economy,economic science,economic and social crises,wars,power of the states,heritage,climate,economic development,inequalities.,crises économiques et sociales,guerres,Science économique,Economie politique,inégalités,développement économique,climat,patrimoine,puissance des Etats |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02127938&r=all |
| By: | Clara Mattei (Department of Economics, New School for Social Research) |
| Abstract: | The framework of the Philosophy of Praxis sheds light on a fundamental Marxian insight: the approach to knowledge is deeply political. This paper studies the Philosophy of Praxis as offering a potent two-fold device. First, understood as a framework of critical analysis, the philosophy of praxis allows us to capture the strength of “pure economics” (especially in its proposed methodology) to bolster bourgeois hegemony in a critical moment for the history of capitalism, the crisis of authority of the Liberal institutions after WWI. Secondly, As the “science of dialectics” or “philosophy of knowledge” (SPN 431), the philosophy of praxis offers a tangible proposal for a radically emancipatory approach to knowledge. Such a project is certainly applicable to economics today. The paper develops a multifaceted comparison between “pure economics” and “critical economics”. While the former is the approach that characterized Marginalist thinkers and is still dominant today, the latter is inspired by the philosophy of praxis as a positive alternative. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1908&r=all |
| By: | François Denuit |
| Abstract: | It is widely agreed that a society must guarantee a social minimum to all its members. Yet, the organisation of social protection within the European Union (EU) is insufficient to protect all Europeans effectively against the risk of poverty and social exclusion. Against this backdrop, this thesis investigates whether a European universal basic income (EUBI) is, if at all, a worthwhile policy to address the problem of poverty in the EU.The central claim of the study posits that there are strong reasons to consider a partial EUBI as a desirable instrument for EU-wide poverty alleviation. Under this scenario, the EU works as a complementary welfare layer offering systemic support to its Member States’ welfare models whilst respecting the diversity of national social protection arrangements. At the same time, as an instrument of pan-European solidarity, the EUBI provides substance to EU social citizenship.The method used is problem-oriented and interdisciplinary, combining insights from political theory, political economy and EU studies writ large. After having layed out the various dimensions underpinning the problem of poverty in the EU and clarified the contours of the solution under scrutiny, the thesis confronts the EUBI with a series of challenges, ranging from normative issues associated with the unconditionality of the basic income and the pursuit of social justice in the EU, to the institutional hurdles pertaining to the legal feasibility of the proposal, via the macroeconomic difficulties related to the diversity of interdependent economies.Overall, this contribution examines an idea which remains unexplored in EU studies and proposes a new approach to European anti-poverty strategy. It also bridges the gap between EU social policy and basic income literatures, beyond established boundaries of research compartmentalisation. As such, it prepares the ground for further fine-tuned research in the areas covered by this comprehensive multi-dimensional analysis. |
| Keywords: | Basic income; Social Europe; Minimum income; Solidarity; Poverty; Social exclusion; European Union; Social protection; Revenu de base; Allocation universelle; Pauvreté; Exclusion sociale; Revenu minimum; Solidarité; Protection sociale; Europe sociale; Union européenne |
| Date: | 2019–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/284009&r=all |
| By: | Mikulas Luptacik; Bernhard Mahlberg |
| Abstract: | In recent years there has been increasing interest in the question of how inequality affects economic growth. This growing interest has recently stimulated new theoretical aswell as empirical research. Some existing theoretical models propose income inequality is detrimental to growth, but alternative theoretical models point at inequality as a determinant furthering economic growth. The main goal of this paper is to obtain deeper insights into the so-called efficiency-equity trade-off. Recently the Stiglitz-Report (Stiglitz et al., 2010) revealed several limits of GDP as an indicator of economic performance and social progress and recommended to shift emphasis towards measuring people's well-being. Following this recommendation,we develop a new multiple criteria decision making model coupled with an extended Leontief input-output model taking into account the social dimension and obtain deeper insights into the so-called efficiency-equity trade-off. |
| Keywords: | Welfare beyond GDP, Utilitarian Social Welfare Function, Rawlsian Social Welfare Function |
| JEL: | C61 C67 D63 I31 |
| Date: | 2018–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:brt:depwps:016&r=all |
| By: | Nuvolari, Alessandro (Institute of Economics, Scuola Superiore Sant’Anna, Pisa); Russo, Emanuele (Institute of Economics, Scuola Superiore Sant’Anna, Pisa) |
| Abstract: | Along the development path, countries experience large transformations in their economic structure as productive resources move towards different economic activities. “Modern economic growth” is also associated with a self-sustained process of technical change which leads to the emergence of new products and sectors characterized by different scopes for productivity gains and demand growth. In this paper we study the interactions between structural change and technological progress from a long-term perspective. We first analyze the secular patterns of structural change across agriculture, manufacturing and services using historical data in the attempt to test some broad conjectures concerning sectoral reallocations at different stages of development (i.e. the so-called Petty-Clark law) and discuss the specific role of manufacturing as an engine of growth. Second, we provide an overview of the literature on sectoral innovation patterns as well as of recent evidence linking structural transformations and sector-specific technological opportunities to aggregate productivity growth. In the final part we present productivity decompositions using a sectoral innovation taxonomy to study the contribution of different groups of activities characterized by heterogeneous innovation patterns. Our results suggest that structural change towards knowledge-intensive activities provides a source of productivity growth in both developing and advanced countries. In turn, this points at the need for a more disaggregated analysis of structural change to capture the diversity in the rate and direction of technical progress across sectors. |
| Keywords: | Long-run development, structural change, technical change, productivity growth |
| JEL: | O10 O14 O30 |
| Date: | 2019–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019022&r=all |
| By: | Sylvain Barde |
| Abstract: | Comparison of macroeconomic simulation models, particularly agent-based models (ABMs), with more traditional approaches such as VAR and DSGE models has long been identified as an important yet problematic issue in the literature. This is due to the fact that many such simulations have been developed following the great recession with a clear aim to inform policy, yet the methodological tools required for validating these models on empirical data are still in their infancy. The paper aims to address this issue by developing and testing a comparison framework for macroeconomic simulation models based on a multivariate extension of the Markov Information Criterion (MIC) originally developed in Barde (2017). The MIC is designed to measure the informational distance between a set of models and some empirical data by mapping the simulated data to the markov transition matrix of the underlying data generating process, and is proven to perform optimally (i.e. the measurement is unbiased in expectation) for all models reducible to a markov process. As a result, not only can the MIC provide an accurate measure of distance solely on the basis of simulated data, but it can do it for a very wide class of data generating processes. The paper first presents the strategies adopted to address the computational challenges that arise from extending the methodology to multivariate settings and validates the extension on VAR and DGSE models. The paper then carries out a comparison of the benchmark ABM of Caiani et al. (2016) and the DGSE framework of Smets and Wouters (2007), which to our knowledge, is the first direct comparison between a macroeconomic ABM and a DGSE model. |
| Keywords: | Model comparison; Agent-based models; Validation methods |
| JEL: | B41 C15 C52 C63 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1908&r=all |
| By: | Evandro Luquini; Nizam Omar |
| Abstract: | This research proposes the econophysics kinetic market model as an evolutionary algorithm's instance. The immediate results from this proposal is a new replacement rule for family competition genetic algorithms. It also represents a starting point to adding evolvable entities to kinetic market models. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.01241&r=all |
| By: | Nora Albu |
| Abstract: | Die Studie untersucht die Lohnstückkosten des deutschen Verarbeitenden Gewerbes mittels einer Input-Output-Analyse, welche die Verflechtungen der Industrie mit anderen Bereichen aus der Wirtschaft im In- und Ausland berücksichtigt. Es werden sowohl die realen als auch die nominalen Lohnstückkosten der deutschen Industrie in den Jahren von 1995 bis 2013 untersucht. Die Lohnstückkosten variieren in Abhängigkeit des gewählten Produktivitätsmesswertes - Bruttowertschöpfung oder Produktionswert der deutschen Industrie. Ein weiterer Fokus liegt bei der Betrachtung von besonders exportstarken Produktionsbereichen der deutschen Industrie. Schließlich werden die durch die Abgrenzung der inländischen Produktion entstehenden Lohnstückkosten des deutschen Verarbeitenden Gewerbes mit den Lohnstückkosten, die durch das Einbeziehen von globalen Lieferketten in der deutschen Industrie entstehen, verglichen. Berechnungen mit der inländischen IO-Analyse zeigen, dass die nominalen Lohnstückkosten trotz Verzerrung durch die unzureichende Datenverfügbarkeit zwischen 1995 und 2007 nicht solch einen starken Rückgang bis 2007 aufweisen wie die realen Lohnstückkosten. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:imk:studie:63-2018&r=all |
| By: | Dongyeol Lee |
| Abstract: | In the last two decades, manufacturing industries in Korea have become more concentrated, and interconnectedness across industries and to foreign countries has risen via vertical relationships and trade linkages. This paper investigates the transmission of economic shocks in such a highly concentrated and interconnected structure, focusing on the role of vertical and trade linkages and using the industry-level international input-output data. The results suggest that, first, the role of vertical and trade linkages in propagating growth shocks from both domestic sources and external sources is important. Second, the growth impact of a few key sources of economic shocks is relatively large. These findings highlight that economic shocks in a few key industries and/or major trading partners that are transmitted through vertical and trade linkages can lead to large swings in the overall economy. This paper contributes to the understanding of the potential interactions between the industrial structure and economic growth and stability. |
| Date: | 2019–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/117&r=all |
| By: | Baer-Nawrocka, Agnieszka; Mrówczyńska-Kamińska, Aldona |
| Abstract: | The main aim of the paper was to assess the measures of direct material and import intensity in the agriculture of the European Union countries. The analysis took place against the backdrop of the importance of agricultural sector in the national economies of the analyzed countries and the level of their development. The research materials covered the input-output tables for respective European Union countries for 1995, 2005, 2014. The analyses demonstrated that there was an increase in material intensity in all EU-15 countries and in Latvia, Lithuania and the Czech Republic. The remaining EU-13 countries noted a relative stability of the measure or its drop (Slovakia and Bulgaria). At the same time, changes in the structure of material supply were found in the new Member States, mainly due to the increase the role of agriculture-related services and the declining role of agriculture. The groups of these countries also differ in terms of import intensity measures of indirect consumption of agriculture. The conducted analysis allowed to check if well-known tendencies in agricultural economics are still valid, as well as to indicate new processes taking place in agriculture of the most developed EU countries. |
| Keywords: | Agribusiness, Agricultural Finance, International Development |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iafepa:289459&r=all |
| By: | Cardoso, F. M.; Gracia-Lázaro, C.; Moisan, F.; Goyal, S.; Sánchez, A.; Moreno, Y. |
| Abstract: | Global supply networks in agriculture, manufacturing and services are a defining feature of the modern world. The efficiency and the distribution of surpluses across different parts of these networks depend on choices of intermediaries. This paper conducts price formation experiments with human subjects located in large complex networks to develop a better understanding of the principles governing behavior. Our first finding is that prices are larger and that trade is significantly less efficient in small world networks as compared to random networks. Our second finding is that location within a network is not an important determinant of pricing. An examination of the price dynamics suggests that traders on cheapest - and hence active - paths raise prices while those off these paths lower them. We construct an agent based model (ABM) that embodies this rule of thumb. Simulations of this ABM yield macroscopic patterns consistent with the experimental findings. Finally, we extrapolate the ABM on to significantly larger random and small world networks and find that network topology remains a key determinant of pricing and efficiency. |
| Date: | 2019–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1953&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Jacinta C. Nwachukwu (Preston, United Kingdom) |
| Abstract: | The overarching question tackled in this paper is: to what degree has financial development contributed to providing opportunities of human development for those on low-incomes and by what information technology mechanisms? We systematically review about 180 recently published papers to provide recent information technology advances in finance for inclusive development. Retained financial innovations are structured along three themes. They are: (i) the rural-urban divide, (ii) women empowerment and (iii) human capital in terms of skills and training. The financial instruments are articulated with case studies, innovations and investment strategies with particular emphasis, inter alia on: informal finance, microfinance, mobile banking, crowdfunding, microinsurance, Islamic finance, remittances, Payment for Environmental Services (PES) and the Diaspora Investment in Agriculture (DIA) initiative. |
| Keywords: | Finance; Inclusive Growth; Economic Development |
| JEL: | G20 I10 I20 I30 O10 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/040&r=all |
| By: | Ervin, Paul A.; Gayoso de Ervin, Lyliana |
| Abstract: | This working paper analyses the effect climate change is expected to have on agricultural productivity, caloric consumption, and vulnerability to food insecurity of household agricultural producers in Paraguay. Our results suggest that increasing temperatures and reduced precipitation will reduce agricultural productivity and caloric consumption, and increase vulnerability to food insecurity. Specifically, a 1 percent increase in average maximum temperatures is associated with a 5 percent reduction in agricultural productivity. A 5 percent reduction in agricultural productivity translates into nearly a 1 percent reduction in caloric consumption. Vulnerability to food insecurity in Paraguay is expected to increase by 28 percentage points by 2100 due to climate change, increasing fastest in areas where temperatures are increasing and rainfall is diminishing. We explore a number of interventions that policy makers can pursue to limit the impact of climate change on food insecurity. |
| Keywords: | Consumer/Household Economics, Food Security and Poverty, Risk and Uncertainty |
| Date: | 2019–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:faoaes:288947&r=all |
| By: | Teresa Ghilarducci; Aida Farmand (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | The bargaining power of workers cannot be measured directly, but it can be inferred from working conditions and institutional factors. This study documents the stagnation in older workers’ wages and the seven reasons older workers have lost bargaining power. Five factors relate to monopsony exposure from eroding retirement income security, union loss, more insecure employment relationships, persistent age discrimination, and geographical immobility. Two additional factors -- older workers' ineligibility for the Earned Income Tax Credit (EITC); and older workers’ relative propensity to work for smaller firms – also weaken bargaining power. Significant loss of bargaining power of workers over age 55 who are projected to fill 6.4 million of the 11.4 million net new jobs created between 2016 and 2026 could suppress wages and working conditions for all workers. |
| Keywords: | working conditions, wages, bargaining power, |
| JEL: | J50 J58 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2019-02&r=all |
| By: | : Andrew Minster; Danielle Kavanagh-Smith; Lara-Zuzan Golesorkhi (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | This paper recognizes additional complicating factors, like social policy and employers' power to shape job prospects, to more accurately characterize the relationship between the labor market and migration. The authors discuss the need to improve the status of unions, create state-funded jobs guarantees, and reform retirement policy to support all workers in the face of growing employer influence. |
| Keywords: | immigration, job markets, undocumented, compensation, immigration economics, labor |
| JEL: | J6 J3 J5 J7 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2018-01&r=all |