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on History and Philosophy of Economics |
| By: | Pedro Garcia Duarte |
| Abstract: | Macroeconomists have emphasized the force of facts in forging a consensus understanding of business cycle fluctuations. According to this view, rival economists could no longer hold disparate views on the topic because “facts have a way of not going away” (Blanchard 2009). But how can macroeconomists observe the workings of an economy? Essentially through building and manipulating models. Thus the construction of macroeconomic facts –or “stylized facts”–, empirical regularities that come to be widely accepted, opens up technical spaces where macroeconomists negotiated their theoretical commitments and eventually allowed a consensus to emerge. I argue that this is an important element in the history of the DSGE macroeconomics. |
| Keywords: | DSGE models; history of macroeconomics; new Keynesian macroeconomics; real business cycles |
| JEL: | B22 B23 E32 |
| Date: | 2015–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2015wpecon5&r=hpe |
| By: | Oddvar M. Kaarbøe (University of Bergen); Alexander F. Tieman (Vrije Universiteit Amsterdam) |
| Abstract: | We apply the stochastic evolutionary approach of equilibrium selection tomacroeconomic models in which a complementarity at the macro level ispresent. These models often exhibit multiple Pareto-ranked Nash equilibria,and the best response-correspondence of an individual increases with ameasure of the aggregate state of the economy. Our main theoretical resultshows how the equilibrium that is singled out by the evolutionary dynamicsis directly related to the underlying externality that creates themultiplicity problem in the underlying macroeconomic stage game. We alsoprovide clarifying examples from the macroeconomic literature. |
| JEL: | C63 C72 C73 E19 L16 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:19990096&r=hpe |
| By: | Koen Vermeylen (University of Amsterdam) |
| Abstract: | Critics of modern macroeconomics often raise concerns about unwarranted welfare conclusions and data mining. This paper illustrates these concerns with a thought experiment, based on the debate in environmental economics about the appropriate discount rate in climate change analyses: I set up an economy where a social evaluator wants to determine the optimal time path of emission levels, and seeks advice for this from an old-style neo-classical macroeconomist and a new neo-classical (modern) macroeconomist; I then describe how both economists analyze the economy, their policy advice, and their mistakes. I then use the insights from this thought experiment to point out some pitfalls of the modern macroeconomic methodology. |
| Keywords: | modern macroeconomics, methodology, descriptive, prescriptive, discount rate |
| JEL: | B22 B41 E13 O44 Q52 Q54 |
| Date: | 2013–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20130200&r=hpe |
| By: | Severin Reissl |
| Abstract: | In a paper for the Review of Keynesian Economics, Steve Keen recently provided a restatement of his claim that "effective demand equals income plus the change in debt". The aim of the present article is to provide a detailed critique of Keen's argument using an analytical framework pioneered by Wolfgang Stützel which has recently been developed further.Using this framework, it is shown that there is no strictly necessary relationship whatsoever between effective demand and changes in the level of gross debt. Keen's proposed relation is shown not to hold under all circumstances, and it is demonstrated that where it does hold this is due to variations in the `velocity of debt'-variable he introduces. This variable, however, lacks theoretical underpinning. The article also comments on Keen's proposal that trade in financial assets should be included in effective demand, arguing that this undermines the concept of effective demand itself. It is also shown that many weaknesses in Keen's argument stem from a lack of terminological clarity which originates in his interpretation of the works of Hyman Minsky. |
| Keywords: | Effective Demand, endogenous money, debt |
| JEL: | E12 E20 E44 E51 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:149-2015&r=hpe |
| By: | FERRARI Sylvie |
| Abstract: | The paper aims to put into perspective Nicholas Georgescu-Roegen’s bioeconomics and Serge Latouche’s degrowth approaches. In particular, we analyse the foundations of these approaches such as they have been put forward by those two economists. If the cross-reading of their work shows both proximity and distance, bioeconomics and degrowth do not have to be confused. Facing ecological challenges, the two approaches agree on the need to invite ethics to commit to a change in society that is compatible with the limits of the biosphere. |
| Keywords: | bioeconomics, degrowth, entropy, sobriety, intergenerational justice, ethics |
| JEL: | B31 B41 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2015-07&r=hpe |
| By: | Elon Kohlberg; Abraham Neyman |
| Abstract: | Building on the work of Nash, Harsanyi, and Shapley, we define a cooperative solution for strategic games that takes account of both the competitive and the cooperative aspects of such games. We prove existence in the general (NTU) case and uniqueness in the TU case. Our main result is an extension of the definition and the existence and uniqueness theorems to stochastic games - discounted or undiscounted. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp679&r=hpe |
| By: | René van den Brink (VU University Amsterdam); Gerard van der Laan (VU University Amsterdam); Valeri Vasil'ev (Sobolev Institute of Mathematics, Russia) |
| Abstract: | Recently, applications of cooperative game theory to economic allocation problems have gained popularity. In many such allocation problems, such as river games, queueing games and auction games, the game is totally positive (i.e., all dividends are nonnegative), and there is some hierarchical ordering of the players. In this paper we introduce the 'Restricted Core' for such 'games with ordered players' which is based on the distribution of 'dividends' taking into account the hierarchical ordering of the players. For totally positive games this solution is always contained in the 'Core', and contains the well-known 'Shapley value' (being the single-valued solution distributing the dividends equally among the players in the corresponding coalitions). For special orderings it equals the Core, respectively Shapley value. We provide an axiomatization and apply this solution to river games. |
| Keywords: | Totally positive TU-game, Harsanyi dividends, Core, Shapley value, Harsanyi set, Selectope, Digraph, River game |
| JEL: | C71 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20090038&r=hpe |
| By: | Fumagalli, Chiara; Motta, Massimo |
| Abstract: | Recent cases in the US (Meritor, Eisai) and in the EU (Intel) have revived the debate on the use of price-cost tests in loyalty discount cases. We draw on existing recent economic theories of exclusion and develop new formal material to argue that economics alone does not justify applying a price-cost test to predation but not to loyalty discounts. Still, the latter contain features (they reference rivals and allow to discriminate across buyers and/or units bought) that have a higher exclusionary potential than the former, and this may well warrant closer scrutiny and more severe treatment from antitrust agencies and courts. |
| Keywords: | exclusive dealing; inefficient foreclosure; market-share discounts |
| JEL: | K21 L41 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10550&r=hpe |
| By: | René van den Brink (VU University Amsterdam); Chris Dietz (VU University Amsterdam); Gerard van der Laan (VU University Amsterdam, the Netherlands); Genjiu Xu (Northwestern Polytechnical University, Xi'an, Shaanxi, P.R. China) |
| Abstract: | There is an extensive literature that studies situations of restricted cooperation in cooperative games. Myerson (1979) introduced communication graph games, where players can only cooperate if they are connected in an undirected graph representing the communication possibilities. The Myerson value is obtained by taking the Shapley value of the corresponding restricted game. For cycle-free connected graphs, Demange (2004) introduced for each player the corresponding hierarchical outcome, being the marginal contribution vector for a particular permutation of the player set induced by the graph. Gilles, Owen and van den Brink (1992) introduced games with a (hierarchical) permission structure modeled by a directed graph on the set of players. In the conjunctive (disjunctive) approach, a coalition is said to be feasible, if for every player in the coalition also all (at least one of) its predecessors (if any) belong(s) to the coalition. The conjunctive (disjunctive) permission value is obtained by taking the Shapley value of the associated conjunctive (disjunctive) restricted game. The two approaches coincide when the permission structure is a rooted tree. In this paper we consider games with a hierarchical permission structure given by a rooted tree and modify the Myerson value to a value for such games. We also consider for these games the hierarchical outcome with respect to the root of the tree (top player), along with a new solution that assigns all payoff to the unique top player in the hierarchy. Then comparable characterizations are given of these three solutions and the (conjunctive) permission value. |
| Keywords: | Cooperative TU-game, rooted tree, Myerson value, hierarchical outcome, permission value, axiomatization |
| JEL: | C71 |
| Date: | 2015–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20150021&r=hpe |
| By: | von der Lippe, Peter |
| Abstract: | Ladislaus von Bortkiewicz has criticized chain indices and Irving Fisher's time and factor reversal tests. However, his arguments (published in German articles) though well ahead of his time and still relevant today are widely fallen in oblivion. He was not the only German statistician who criticized Fisher' approach but the first who extensively and successfully used mathematics to substantiate it and to derive a formula for the "chain drift". We present his ideas together with some own arguments against the time reversal test. To study Bortkiewicz's and other criticisms of Fisher's reversal tests and chain indices remains worthwhile, because reference to the time reversal test is still unshakably popular today and it only recently became mandatory to compile chain indices in official statistics. |
| Keywords: | Index Numbers, Time Reversal Test, Factor Reversal Test, Fisheer's ideal index, chain indices, transititvity |
| JEL: | C43 C82 E01 E31 |
| Date: | 2015–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63833&r=hpe |
| By: | Jason Collins (Business School, University of Western Australia); Boris Baer (Centre for Integrative Bee Research (CIBER) ARC CoE in Plant Energy Biology, University of Western Australia); Ernst Juerg Weber (Business School, University of Western Australia) |
| Abstract: | As human traits and preferences were shaped by natural selection, there is substantial potential for the use of evolutionary biology in economic analysis. In this paper, we review the extent to which evolutionary theory has been incorporated into economic research. We examine work in four areas: the evolution of preferences, the molecular genetic basis of economic traits, the interaction of evolutionary and economic dynamics, and the genetic foundations of economic development. These fields comprise a thriving body of research, but have significant scope of further investigation. In particular, the growing accessibility of low cost molecular data will create more opportunities for research on the relationship between molecular genetic information and economic traits. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:15-09&r=hpe |
| By: | Luís Carvalho |
| Abstract: | The best known equilibrium strategies of multiplayer bargaining dene that the agreement is established at the rst moment. In this paper two new subgame perfect Nash equilibria strategies are proposed, one in which the agreement moment is delayed for T > 1 periods and one other in which the bargaining proposals proceed endlessly. |
| Keywords: | Multiplayer Bargaining |
| JEL: | C72 C78 |
| Date: | 2015–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:isc:iscwp2:bruwp1503&r=hpe |
| By: | Bao, Te; Tian, Xu; Yu, Xiaohua (Groningen University) |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:gro:rugsom:15001-eef&r=hpe |
| By: | Encarnacion Algaba (University of Seville, Spain); René van den Brink (VU University Amsterdam, the Netherlands); Chris Dietz (VU University Amsterdam, the Netherlands) |
| Abstract: | In the literature, there exist several models where a cooperative TU-game is enriched with a hierarchical structure on the player set that is represented by a digraph. We consider games under precedence constraints introduced by Faigle and Kern (1992) who also introduce a generalization of the Shapley value for such games. They characterized this solution by efficiency, linearity, the null player property and hierarchical strength which states that in unanimity games the payoffs are allocated among the players in the unanimity coalition proportional to their hierarchical strength in the corresponding coalition. The hierarchical strength of a player in a coalition in an acyclic digraph is the number of admissible permutations (those in which successors in the digraph enter before predecessors) where this player is the last of that coalition to enter. We introduce and axiomatize a new solution for games under precedence constraints, called hierarchical solution. Unlike the precedence Shapley value, this new solution satisfies the desirable axiom of irrelevant player independence meaning that payoffs assigned to relevant players are not affected by the presence of irrelevant players. This hierarchical solution is defined in a similar spirit as the precedence Shapley value but is a precedence power solution, and thus allocates the dividend of a coalition proportionally to a power measure for acyclic digraphs, specifically proportionally to the hierarchical measure. We give an axiomatization of this measure and extend it to regular set systems. Finally, we consider the normalized hierarchical measure on the subclasses of forests and sink. |
| Keywords: | Cooperative TU-game, acyclic digraph, hierarchical strength, irrelevant player, power measure, regular set system, rooted and sink trees |
| JEL: | C71 |
| Date: | 2015–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20150007&r=hpe |
| By: | Florian Wagener (CeNDEF, University of Amsterdam) |
| Abstract: | The rational expectations hypothesis is one of the cornerstones of current economic theorising. This review discusses a number of experiments that focus on expectation formation by human subjects and analyses the implications for the rational expectations hypothesis. The experiments show that most agents are weakly rational and that their expectations coordinate quickly; but the strong rational expectations hypothesis poorly describes the expectational dynamics and is outperformed by other hypotheses. |
| Keywords: | Rational expectations, expectation formation, laboratory experiments, human subjects |
| JEL: | D84 |
| Date: | 2013–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20130125&r=hpe |
| By: | Bezalel Peleg; Peter Sudholter |
| Abstract: | We show that the Aumann-Davis-Maschler bargaining set and the Mas-Colell bargaining set of a non-leveled NTU game that is either ordinal convex or coalition merge convex coincides with the core of the game. Moreover, we show by means of an example that the foregoing statement may not be valid if the NTU game is marginal convex. |
| Keywords: | NTU game, Convex game, Bargaining set |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp681&r=hpe |
| By: | Arantza Estévez-Fernández (VU University Amsterdam); Peter Borm (Tilburg University, the Netherlands); M. Gloria Fiestras-Janeiro (Universidade de Vigo, Spain) |
| Abstract: | In this paper, we analyze bankruptcy problems with nontransferable utility (NTU) from a game theoretical perspective by redefining corresponding NTU-bankruptcy games in a tailor-made way. It is shown that NTU-bankruptcy games are both coalitional merge convex and ordinal convex. Generalizing the notions of core cover and compromise stability for transferable utility (TU) games to NTU-games, we also show that each NTU-bankruptcy game is compromise stable. Thus, NTU-bankruptcy games are shown to retain the two characterizing properties of TU-bankruptcy games: convexity and compromise stability. As a first example of a game theoretical NTU-bankruptcy rule, we analyze the NTU-adjusted proportional rule and show that this rule corresponds to the compromise value of NTU-bankruptcy games. |
| Keywords: | NTU-bankruptcy problem, NTU-bankruptcy game, Coalitional merge convexity, Ordinal convexity, Compromise stability, Core cover, Adjusted proportional rule |
| JEL: | C71 |
| Date: | 2014–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20140030&r=hpe |
| By: | Roy Havemann and Johan Fourie |
| Abstract: | This paper investigates the causes and consequences of colonial Africa’s first financial crash, which happened in South Africa’s Dutch Cape Colony. The 1788–1793 crisis followed a common sequence of events: trade and fiscal deficits were monetized by printing money, credit extension accelerated, the exchange rate fell sharply and inflation spiked. The domestic conditions were compounded by a deterioration of international conditions and political uncertainty. The final straw was the collapse of the Cape’s own Lehman Brothers – an unregulated merchant house, run by a prominent Cape family, which had been indiscriminately issuing the equivalent of promissory notes. The policy response during the crisis included fiscal austerity, an attempted reorganization of domestic financial intermediation and continued monetary easing, which depreciated the exchange rate and triggered inflation. A new domestic bank was created. Yet the Cape economy would not recover quickly; the effects of the Cape’s first financial crash would be felt deep into the nineteenth century. |
| Keywords: | financial crisis, Eighteenth century, institutions, banking, Africa |
| JEL: | N27 N17 N20 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:511&r=hpe |
| By: | Raul V. Fabella (School of Economics, University of the Philippines Diliman); Vigile Marie Fabella (Universitaet Konstanz) |
| Abstract: | We propose a formal re-definition of the concept market failure based on the idea of the imperfect state. In the Neo-classical taxonomy, a decentralized regime of exchange is a market failure if its laissez faire equilibrium solution is welfare-dominated by a technically feasible alternative. If the state is perfect, that is, benevolent and its transactions cost of intervention is zero, every market failure can be remedied/corrected with a welfare gain. If the state is imperfect, that is, either non-benevolent or with non-zero transactions cost, the state intervention to correct the market failure can be welfare-reducing. Extending the logic behind Williamson’s remediableness criterion and Stiglitz’ constrained Paretoness, we introduce a new taxonomy of failures: the concept “proto-failure” now denotes any failure which laissez faire interaction cannot remedy without a welfare gain. The label “market failure” now denotes a proto-failure which the relevant state can correct with a welfare gain. A proto-failure that the relevant state cannot correct with a welfare gain we call “RC efficient.” We use the net welfare metric which explicitly accounts for transactions cost of intervention as efficiency criterion. The new taxonomy is equivalent to the old if the state is perfect, that is, all proto failures are market failures. When the state is imperfect, the set of market failures is smaller than the set of proto-failures. A proto-failure is a necessary--but not a sufficient--condition for a welfare-improving government intervention. This paper follows the Williamson counsel to “push the logic of positive transactions cost to completion.” |
| Keywords: | proto-failure, market failure, transactions cost, imperfect state, welfare economics |
| JEL: | D60 D61 D63 D23 D04 H21 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201506&r=hpe |
| By: | Peter Duersch (University of Heidelberg); Julia Müller (Erasmus University Rotterdam) |
| Abstract: | In a punishment experiment, we separate the demand for punishment in general from the demand to conduct punishment personally. Subjects experience an unfair split of their earnings from a real effort task and have to decide on the punishment of the person who determines the distribution. First, it is established whether the allocator's payoff is reduced and, afterwards, subjects take part in a second price auction for the right to (physically) carry out the act of payoff reduction themselves. Subjects bid positive amounts and are happier if they get to punish personally. |
| Keywords: | personal punishment, real effort task, experiment, auction |
| JEL: | C92 D03 |
| Date: | 2013–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20130071&r=hpe |
| By: | John A Weymark (Vanderbilt University) |
| Abstract: | In Democratic Reason, Hélène Landemore has built a case for the epistemic virtues of inclusive deliberative democracy based on the cognitive diversity of the group engaged in making collective decisions. She supports her thesis by appealing to the Diversity Trumps Ability Theorem of Lu Hong and Scott Page. In practice, deliberative assemblies often restrict attention to situations with only two options. In this paper, it is shown that it is not possible to satisfy the assumptions of the Diversity Trumps Ability Theorem when decisions are binary. The relevance of this theorem for democratic decision-making in non-binary situations is also considered. |
| Keywords: | epistemic democracy, Diversity Trumps Ability Theorem |
| JEL: | D7 Y8 |
| Date: | 2014–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:van:wpaper:vuecon-sub-00008&r=hpe |
| By: | Estela Sánchez-Rodríguez (Vigo University, Spain); Peter Borm (CentER, University of Tilburg, the Netherlands); Arantza Estévez-Fernández (VU University Amsterdam); M. Gloria Fiestras-Janeiro (Vigo University, Spain); Manuel A. Mosquera (Vigo University, Spain) |
| Abstract: | This paper extends the notion of individual minimal rights for a transferable utility game (TU-game) to coalitional minimal rights using minimal balanced families of a specific type, thus defining a corresponding minimal rights game. It is shown that the core of a TU-game coincides with the core of the corresponding minimal rights game. Moreover, the paper introduces the notion of the k-core cover as an extension of the core cover. The k-core cover of a TU-game consists of all efficient payoff vectors for which the total joint payoff for any coalition of size at most k is bounded from above by the value of this coalition in the corresponding dual game, and from below by the value of this coalition in the corresponding minimal rights game. It is shown that the core of a TU-game with player set N coincides with the ⌊|N |/2⌋-core cover. Furthermore, full characteriz ations of games for which a k-core cover is nonempty and for which a k-core cover coincides with the core are provided. |
| Keywords: | Core, core cover, k-core cover, k-compromise admissibility, k-compromise stability, assignment games |
| JEL: | C71 |
| Date: | 2013–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20130177&r=hpe |
| By: | Roland Bénabou; Davide Ticchi; Andrea Vindigni |
| Abstract: | We analyze the joint dynamics of religious beliefs, scientific progress and coalitional politics along both religious and economic lines. History offers many examples of the recurring tensions between science and organized religion, but as part of the paper's motivating evidence we also uncover a new fact: in both international and cross-state U.S. data, there is a significant and robust negative relationship between religiosity and patents per capita. The political-economy model we develop has three main features: (i) the recurrent arrival of scientific discoveries that generate productivity gains but sometimes erode religious beliefs; (ii) a government, endogenously in power, that can allow such innovations to spread or instead censor them; (iii) a religious organization or sector that may invest in adapting the doctrine to new knowledge. Three long-term outcomes emerge. First, a "Secularization" or "Western-European" regime with declining religiosity, unimpeded science, a passive Church and high levels of taxes and transfers. Second, a "Theocratic" regime with knowledge stagnation, extreme religiosity with no modernization effort, and high public spending on religious public goods. In-between is a third, "American" regime that generally (not always) combines scientific progress and stable religiosity within a range where religious institutions engage in doctrinal adaptation. It features low overall taxes, together with fiscal advantages or societal laws benefiting religious citizens. Rising income inequality can, however, lead some of the rich to form a successful Religious-Right alliance with the religious poor and start blocking belief-eroding discoveries and ideas. |
| JEL: | E02 H11 H41 N0 O3 O43 P16 Z1 Z12 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21105&r=hpe |
| By: | Nalan Basturk (Erasmus University Rotterdam); Cem Cakmakli (Koc University, Turkey); S. Pinar Ceyhan (Erasmus University Rotterdam); Herman K. van Dijk (Erasmus University Rotterdam, the Netherlands) |
| Abstract: | This paper starts with a brief description of the introduction of the likelihood approach in econometrics as presented in Cowles Foundation Monographs 10 and 14. A sketch is given of the criticisms on this approach mainly from the first group of Bayesian econometricians. Publication and citation patterns of Bayesian econometric papers are analyzed in ten major econometric journals from the late 1970s until the first few months of 2014. Results indicate a cluster of journals with theoretical and applied papers, mainly consisting of <I>Journal of Econometrics</I>, <I>Journal of Business and Economic Statistics</I> and <I>Journal of Applied Econometrics</I> which contains the large majority of high quality Bayesian econometric papers. A second cluster of theoretical journals, mainly consisting of <I>Econometrica</I> and <I>Review of Economic Studies</I> contains few Bayesian econometric papers. The scientific impact, however, of these few papers on Bayesian econometric research is substantial. Special issues from the journals <I>Econometric Reviews</I>, <I>Journal of Econometrics</I> and <I>Econometric Theory</I> received wide attention. <I>Marketing Science</I> shows an ever increasing number of Bayesian papers since the middle nineties. The <I>International Economic Review</I> and the <I>Review of Economics and Statistics</I> show a moderate time varying increase. An upward movement in publication patterns in most journals occurs in the early 1990s due to the effect of the 'Computational Revolution'. … More abstract in the paper. |
| Keywords: | History, Bayesian Econometrics |
| JEL: | C01 |
| Date: | 2014–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20140085&r=hpe |
| By: | Ines Lindner (VU University Amsterdam, the Netherlands); Holger Strulik (Georg-August-Universität Göttingen, Germany) |
| Abstract: | We present a multi-country theory of economic growth in which countries are connected by a network of mutual knowledge exchange. Growth is generated through human capital accumulation and knowledge externalities. The available knowledge in any country depends on its connections to the rest of the world and on the human capital of the countries it is exchanging knowledge with. We show how the diffusion of knowledge through the world explains the evolution of global income inequality. It generates a "Great Divergence", that is increasing world inequality after the take-off of the forerunners of the industrial revolution, followed by a "Great Convergence", that is decreasing world inequality after the take-off of the latecomers of the industrial revolution. Knowledge diffusion through a Small World network produces an extraordinary diversity of individual growth e xperiences of initially identical countries including differentiated take-offs to growth as well as overtaking and falling behind in the course of world development. |
| Keywords: | networks, knowledge diffusion, economic growth, world income distribution |
| JEL: | O10 O40 D62 D85 F41 |
| Date: | 2014–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20140033&r=hpe |
| By: | Metin M. Cosgel (University of Connecticut); Thomas J. Miceli (University of Connecticut); Sadullah Yıldırım (University of Connecticut); Matthew Histen (University of Connecticut) |
| Abstract: | State and religion, two of the oldest institutions known to mankind, have historically had a close relationship with each other, often joining forces to rule populations. Although the tendency towards secularization has hampered this relationship in recent centuries, the state-religion alliance remains strong in some societies. We use a political economy approach and a unique dataset to examine the relationship between state and religion since the year 1000. We constructed the data in two steps. We first gathered information on the political and religious characteristics of over five hundred polities observed throughout history. Then, using today’s nations as units of analysis, we tracked in 50-100 year intervals which polities have ruled in these lands since 1000. Combining the information from the two files, we built a cross-national panel dataset with three objectives. First, we examine the evolution of state religion over time and its variation across geographic regions and religious traditions. Second, we use regression analysis to examine the forces affecting the adoption of state religion during the period between 1000 and 2000. Finally, we narrow the focus to the continuing presence of official monopolies in the religion market and examine the historical roots of why state religions have survived in some societies while disappearing in others at the end of the twentieth century. |
| Keywords: | state, religion, legitimacy, political economy |
| JEL: | H10 P5 N4 Z12 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2015-07&r=hpe |