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on History and Philosophy of Economics |
| By: | Constantinescu, Radu |
| Abstract: | The aim of the present paper is an attempt to build a scaffolding with the help of which, the concept of “rationality” will be explored from the philosophic and also economic point of view, with the purpose of highlighting that Econometrics and other purely quantitative scientific demonstrations are subject to serious errors. The starting issue is given by the usage of the "rationality" concept in the economic science, the way that it can change the result of the human action and also the risk of treating the rational as being irrational by only taking into account the results of a sole action. |
| Keywords: | rationality; irationality; human action; homo oeconomicus; homo irationalis |
| JEL: | N01 E29 A12 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33379&r=hpe |
| By: | Tadeusz Kowalski (Poznan University of Economics, Poznan, Poland); Yochanan Shachmurove (The City College of New York, New York, U.S.A.) |
| Abstract: | This paper provides an overview of the evolution of macroeconomic thought from 1936, the year John Maynard Keynes published his general theory of employment, interest and money to the year 2010. It explores the reasons for the extension of the business cycle during the postwar period. The paper details the decline in the popularity of the Keynesian theory and the return to classical economic principles. The recent crisis necessitates a shift in the way economists understand, theorize, teach and implement macroeconomic policies. The paper suggests some new elements needed in order to mitigate the next inevitable economic and financial crisis. |
| Keywords: | Financial crises; The United States Financial Crisis Inquiry Commission; The 2010 Economic Report of the United States President; Keynesian Theory; Adaptive Expectations; Rational Expectations; Monetary and Fiscal Policies; Business Cycles; Regulations; General Agreement on Tariffs and Trade (GATT); World Trade Organization (WTO); Trade Liberalization; United States; China; Euro; Econometric Policy Evaluation. |
| JEL: | B0 E0 E3 E4 E5 E6 F0 F3 F4 G0 H3 H6 K2 O51 P1 R3 |
| Date: | 2011–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:wse:wpaper:56&r=hpe |
| By: | Kakarot-Handtke, Egmont |
| Abstract: | Behavioral assumptions, rational or otherwise, are not solid enough to be eligible as first principles of theoretical economics. Hence all endeavors to lay the formal foundation on a new site and at a deeper level actually need no further vindication. The present paper suggests three non-behavioral axioms as groundwork and applies them to the analysis of qualitative and temporal aggregation in the pure consumption economy. It turns out that the structural axiom set is self-similar with regard to the differentiation of the household- and business sector as well as to the sequencing of time. |
| Keywords: | New framework of concepts; Structure-centric; Axiom set; General equilibrium; Supersymmetry |
| JEL: | D50 E10 |
| Date: | 2011–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33345&r=hpe |
| By: | Anirban Chakraborti (MAS - Mathématiques Appliquées aux Systèmes - EA 4037 - Ecole Centrale Paris); Ioane Muni Toke (MAS - Mathématiques Appliquées aux Systèmes - EA 4037 - Ecole Centrale Paris); Marco Patriarca (IFISC - Instituto de Fisica Interdisciplinaire y Sistemas Complejos - Instituto de Fisica Interdisciplinaire y Sistemas Complejos); Frédéric Abergel (MAS - Mathématiques Appliquées aux Systèmes - EA 4037 - Ecole Centrale Paris) |
| Abstract: | This article aims at reviewing recent empirical and theoretical developments usually grouped under the term Econophysics. Since its name was coined in 1995 by merging the words "Economics" and "Physics", this new interdisciplinary field has grown in various directions: theoretical macroeconomics (wealth distributions), microstructure of financial markets (order book modeling), econometrics of financial bubbles and crashes. We give a brief introduction in the first part and begin with discussing interactions between Physics, Mathematics, Economics and Finance that led to the emergence of Econophysics in the second part. Then the third part is dedicated to empirical studies revealing statistical properties of financial time series. We begin the presentation with the widely acknowledged "stylized facts" describing the distribution of the returns of financial assets: fat-tails, volatility clustering, etc. Then we show that some of these properties are directly linked to the way "time" is taken into account, and present some new remarks on this account. We continue with the statistical properties observed on order books in financial markets. For the sake of illustrations in this review, (nearly) all the stated facts are reproduced using our own high-frequency financial database. Contributions to the study of correlations of assets such as random matrix theory and graph theory are finally presented in this part. The fourth part of our review deals with models in Econophysics through the point of view of agent-based modeling. Using previous work originally presented in the fields of behavioural finance and market microstructure theory, econophysicists have developed agent-based models of orderdriven markets that are extensively reviewed here. We then turn to models of wealth distribution where an agent-based approach also prevails: kinetic theory models, and continue with game theory models and review the now classic minority games. We end this review by providing an outlook on possible directions of research. |
| Date: | 2011–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00621058&r=hpe |
| By: | Elvio Accinelli (Facultad de Economía, Universidad Autónoma de san Luis Potosí. Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Leobardo Plata-Pérez (Facultad de Economía, Universidad Autónoma de san Luis Potosí.); Joss Sánchez-Pérez (Facultad de Economía, Universidad Autónoma de san Luis Potosí.) |
| Abstract: | The Pareto optimal concept does not concern with fairness or equality, it is a concept related to efficiency. In this paper, using techniques from the general equilibrium theory, we relate efficiency, fairness and stability of an economy. |
| Keywords: | Fairness, efficiency, economics welfare |
| JEL: | D4 D6 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:1111&r=hpe |
| By: | Clark, Andrew E. (Paris School of Economics) |
| Abstract: | The role of money in producing sustained subjective well-being seems to be seriously compromised by social comparisons and habituation. But does that necessarily mean that we would be better off doing something else instead? This paper suggests that the phenomena of comparison and habituation are actually found in a considerable variety of economic and social activities, rendering conclusions regarding well-being policy less straightforward. |
| Keywords: | comparison, habituation, income, unemployment, marriage, divorce, health, religion, policy |
| JEL: | D01 D31 H00 I31 J12 J28 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5966&r=hpe |
| By: | Enrique Moral-Benito (Banco de España) |
| Abstract: | Model uncertainty remains a challenge to applied researchers in economics. When many competing models are available for estimation and without enough guidance from theory, model averaging represents an alternative to model selection. Despite model averaging approaches have been present in statistics for many years, only over the recent decades are starting to receive attention in economic applications. This paper presents an overview of model averaging in economics with emphasis and some insights on recent developments in the combination of model averaging with IV and panel data settings. |
| Keywords: | Model averaging, Model uncertainty |
| JEL: | C5 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1123&r=hpe |
| By: | Julian Romero |
| Abstract: | One of the fundamental problems in both economics and organization is to understand how individuals coordinate. The widely used minimum-effort coordination game has been used as a simplied model to better understand this problem. This paper rst presents some theoretical results that give conditions under which the minimum-effort coordination game exhibits hysteresis. Using these theoretical results, some experimental hypotheses are developed and then conrmed using human subjects in the laboratory. The main insight is that play in a given game is heavily dependent on the history of parameters leading up to that game. For example, the experiments show when cost c = 0:5 in the minimum-effort coordination game, there is signicantly more high effort if the cost has increased to c = 0:5 compared to when the cost has decreased to c = 0:5. One implication of this is that a temporary change in parameters may be able move the economic system from a bad equilibrium to a good equilibrium. |
| Keywords: | Hysteresis, Minimum-effort Coordination Game, Logit Equilibrium, Experimental Economics, Equilibrium Selection |
| JEL: | C72 C92 M53 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1265&r=hpe |
| By: | Anirban Chakraborti (MAS - Mathématiques Appliquées aux Systèmes - EA 4037 - Ecole Centrale Paris); Ioane Muni Toke (MAS - Mathématiques Appliquées aux Systèmes - EA 4037 - Ecole Centrale Paris); Marco Patriarca (IFISC - Instituto de Fisica Interdisciplinaire y Sistemas Complejos - Instituto de Fisica Interdisciplinaire y Sistemas Complejos); Frédéric Abergel (MAS - Mathématiques Appliquées aux Systèmes - EA 4037 - Ecole Centrale Paris) |
| Abstract: | This article is the second part of a review of recent empirical and theoretical developments usually grouped under the heading Econophysics. In the first part, we reviewed the statistical properties of financial time series, the statistics exhibited in order books and discussed some studies of correlations of asset prices and returns. This second part deals with models in Econophysics from the point of view of agent-based modeling. Of the large number of multiagent- based models, we have identified three representative areas. First, using previous work originally presented in the fields of behavioral finance and market microstructure theory, econophysicists have developed agent-based models of order-driven markets that we discuss extensively here. Second, kinetic theory models designed to explain certain empirical facts concerning wealth distribution are reviewed. Third, we briefly summarize game theory models by reviewing the now classic minority game and related problems. |
| Date: | 2011–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00621059&r=hpe |
| By: | Hălăngescu, Constantin I. |
| Abstract: | The purpose of this paper is to present, in a general, non exhaustive manner, a diachronic relationship the macroeconomic phenomenology of Kondratieff cycles and higher education –targeted reforms. Historical evidence presented by the speciality literature show that these reforms have occured in Kondratieff cycles’ decline stages, subsumed to the socio-economic phenomena characteristic to each of these. Adhering to the idea of crossing through the fifth cycle, the second part of the article launches a problem that could be discussed in extenso in subsequent research, namely: given the quasi-structural reforms in higher education systems (regionally polarized into the U.S.A.-Europe-Asia/Pacific triangle), are we passing through a cyclical phase of global upswing, in the academicus vs. oeconomicus debate from the financial-economic crisis marked beggining of this millennium? Could globalization through internationalization and higher education massification be considered kondratieffian’s current „long wave” paradigms? |
| Keywords: | Kondratieff cycles; economic cycles; higher education; academic reforms; economic decline; globalization; internationalization; macroeconomics |
| JEL: | O11 N30 I23 I21 E65 F01 |
| Date: | 2011–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33286&r=hpe |
| By: | Stephen Kinsella (Department of Economics, Kemmy School of Business, University of Limerick); David M. Ramsey (Department of Mathematics and Statistics, University of Limerick) |
| Abstract: | We present a model of partnership formation based on two discrete character traits. There are two classes of individual. Each individual observes a sequence of potential partners from the other class. The traits are referred to as attractiveness and character, respectively. All individuals prefer partners of high attractiveness and similar character. Attractiveness can be measured instantly. However, in order to observe the character of an individual, a costly interview (or date) is required. On observing the attractiveness of a prospective partner, an individual must decide whether he/she wishes to proceed to the interview stage. During the interview phase, the prospective pair observe each other's character and then decide whether they wish to form a pair. Mutual acceptance is required for both an interview to occur and a pair to form. An individual stops searching on nding a partner. A set of criteria based on the concept of a subgame perfect Nash equilibrium is used to define an equilibrium of this game. It is argued that under such a general formulation there may be multiple equilibria. For this reason, we define a specific formulation of the game, the so called symmetric version, which has a unique symmetric equilibrium. The form of this equilibrium has some similarities to the block separating equilibrium derived for classical models of two-sided mate choice and job search problems, but is essentially different. |
| Keywords: | mutual mate choice, game theory, common preferences, homotypic preferences, subgame perfect equilibrium |
| Date: | 2011–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201119&r=hpe |
| By: | Timothy Perri |
| Abstract: | Oyer (2007, 2008) considered the turnover of economics professors early in their careers. He found professors are more likely to move down from higher ranked schools than up from lower ranked schools. An asymmetric information model suggests this phenomenon is explained by imperfect screening at one’s initial hiring. A smaller fraction of more able individuals and more accurate screening imply a greater chance downward movement exceeds movement up. Key Words: |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:11-13&r=hpe |