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on History and Philosophy of Economics |
| By: | Makovi, Michael |
| Abstract: | In the Discourse on the Origin and Foundations of Inequality, Jean-Jacques Rousseau (1754) sketches a hypothetical illegitimate social contract to explain the origin of socioeconomic inequality. Rousseau himself notes that his illegitimate social contract is not intended to be historically accurate. But this casts doubt on the methodological validity of his argument. According to Ronald Coase's (1981) criticism of Milton Friedman (1953) statements on the methodology of positive economics, theoretical models, to be valid, must possess a certain degree of realism which Rousseau's does not. This same criticism applies to Carole Pateman's adaptation of Rousseau in her Sexual Contract (1988). |
| Keywords: | Rousseau, Coase, Pateman, Sexual Contract, methodology, inequality |
| JEL: | B31 B41 I3 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65790&r=hpe |
| By: | Philippe Bich (Paris School of Economics - Centre d'Economie de la Sorbonne); Rida Laraki (LAMSADE - Université de Dauphine et Département d'Economie - Ecole Polytechnique) |
| Abstract: | Endogenous sharing rules was introduced by Simon and Zame to model payoff indeterminacy in discontinuous games. Their main result concerns the existence of a solution, i.e., a mixed Nash equilibrium and an associated sharing rule. This note extends their result to abstract economies where, by definition, players are restricted to pure strategies, and provide an interpretation of Simon and Zame's model in terms of preference incompleteness |
| Keywords: | abtract economies; endogenous sharing rules; competitive equilibrium; incomplete and discontinuous preferences; better-reply security |
| JEL: | C02 C62 C72 D50 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:15058&r=hpe |
| By: | Tai Young-Taft |
| Abstract: | Marx's theory of money is critiqued relative to the advent of fiat and electronic currencies and the development of financial markets. Specific topics of concern include (1) today's identity of the money commodity, (2) possible heterogeneity of the money commodity, (3) the categories of land and rent as they pertain to the financial economy, (4) valuation of derivative securities, and (5) strategies for modeling, predicting, and controlling production and exchange of the money commodity and their interface with the real economy. |
| Keywords: | Macroeconomics; Marx's Theory of Money; Monetary Theory; Transformation Problem |
| JEL: | B51 E11 G13 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_841&r=hpe |
| By: | Irenaeus Wolff |
| Abstract: | In many social situations, human behaviour differs from the Nash-equilibrium under selfish payoff-maximisation. Numerous social-preference models have been proposed, virtually all of them relying on the Nash-equilibrium concept. This paper determines the Nash-equilibrium sets that result given experiment participants’ elicited preferences, and tests the various aspects of a ‘revealed-preference Nash-equilibrium’ by inducing common knowledge of preferences, using a publicgood situation as an example. The data show that in a three-player public-good situation, multiple equilibria should be expected relatively often (in a third of the cases). Second, most participants’ individual behaviour is in accordance with aspects of Nash equilibrium: most people best-respond to their beliefs, choose equilibrium actions, and consider beliefs that correspond to an equilibrium. However, many participants predict others’ behaviour poorly, which also entails that behaviour rarely is in equilibrium. This points to models like level-k as potential components for better social-preference theories. The experimental findings are obtained using experienced participants and robust to giving participants the option to look up the set of equilibria of their game, and to reducing the number of players to two. |
| Keywords: | Public good, social dilemma, Nash-equilibrium, rational beliefs, conditional cooperation, social preferences |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0097&r=hpe |
| By: | Di Bartolomeo Giovanni; Stefano Papa |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:ter:wpaper:0117&r=hpe |
| By: | Svizzero, Serge; Tisdell, Clem |
| Abstract: | Many economists have recently tried to explain the diverse levels of economic development of countries by studying their trajectories during past eras and in recent history. Special attention has been given to the influences on contemporary societies of relevant developments in prehistory and more particularly, those arising from the Neolithic revolution, i.e. the transition from foraging to farming. This transition from simple to complex hunting and gathering and then to farming is a sequence couched in social evolutionary terms. It suggests a pattern of progressive development resulting in increasing cultural complexity. In this evolutionary scheme, simple hunter-gatherers develop into complex hunters and collectors, whose critical economic decisions are a consequence of climatic changes that inevitably lead them to irreversibly adopt agriculture. Although this pattern of development is widely accepted, we challenge it. Studies of past and recent hunting and gathering societies show an incredible diversity of human social organization through time. Similarly, the various centers where agriculture started during the Neolithic period display great diversity in terms of their genesis, nature and consequences. The nature of the spread of agriculture from the Levant to Europe displays diversity. Demic diffusion and cultural diffusion were both present, and generated a variety of diffusion processes. This diversity of human societies is not easily accounted for by social evolutionary processes; indeed, people’s understanding of the world directly influences the economic decisions they make. The development of agriculture eventually generated an economic surplus. This (combined with increasing social and economic inequalities), another feature of the Neolithic revolution, led to economic growth and therefore to the long-term dominance of agropastoralists societies. Inequality (the appropriation by dominant classes of the economic surplus generated by agropastoralism and by stemming economic developments) was therefore a necessary early condition for increasing the chances of the survival and development of these societies; otherwise they would all have been caught in the Malthusian trap. |
| Keywords: | hunter-gatherers, agriculture, Neolithic transition, demic diffusion, imitation, economic surplus, social and economic inequalities, social evolutionary theory., Community/Rural/Urban Development, Crop Production/Industries, Land Economics/Use, N00, N5, O10, Q10, |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseee:168375&r=hpe |
| By: | Svizzero, Serge; Tisdell, Clem |
| Abstract: | The commencement of agriculture in the Holocene era is usually seen as heralding the beginning of a chain of events that eventually resulted in the Industrial Revolution and in modern economic development. The purpose of this paper is to outline and critically review theories about why and how agriculture first began. It also classifies these theories according to whether they are based on agriculture’s development as a response to food deprivation, to a food surplus, or neither of these factors. Because agriculture began independently in several different geographical centres, it seems unlikely that the switch of early societies from hunting and gathering to agriculture was the result of the same cause in all of these locations. Moreover, the paper provides some new suggestions as to why hunters and gatherers were motivated to commence or increase their dependence on agriculture in some locations. Views about the role of natural resources and institutions in the development of agriculture are also discussed. |
| Keywords: | Agricultural commencement, Domestication, Institutions, Natural endowments, Neolithic transition., Community/Rural/Urban Development, Crop Production/Industries, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies, O1, N00, P00, P52, Z13., |
| Date: | 2014–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseet:183284&r=hpe |
| By: | Mark Setterfield (Department of Economics, New School for Social Research) |
| Abstract: | The question addressed in this paper is: can monetary policy succeed in stabilizing the economy even when the policy model on which it is predicated is mis-specified? Using variants of the 3-equation New Consensus Macroeconomics model, it is shown that this question can be answered in the affirmative. The purpose of the paper is not to encourage indifference towards model uncertainty, however, but rather to warn against the perils of “policy model complacency”. This arises if the success of policy is misinterpreted as successful understanding of the workings of the economy, which makes the policy maker vulnerable to surprises: events with systematic origins in the “true” model of the economy that are not anticipated by the (mis-specified) policy model. To safeguard against this problem, policy makers should always entertain eclectic views of the workings of the economy – a task that is easily accomplished by paying more attention to “outside the mainstream” macroeconomic thinking that frequently makes predictions that are at odds with those of the dominant policy model. |
| Keywords: | Monetary policy, central banking, model uncertainty, Lucas critique, Tinbergen principle |
| JEL: | E12 E13 E52 E58 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1516&r=hpe |
| By: | Di Bartolomeo Giovanni; Papa Stefano |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ter:wpaper:0111&r=hpe |
| By: | Tisdell, Clem; Svizzero, Serge |
| Abstract: | The literature explaining social collapse mainly focuses on factors such as wars, climate change or disease, as exemplified by numerous examples of collapses which have occurred during the Late Bronze Age in the Near East and in the South-eastern Mediterranean region. This paper aims at demonstrating that collapse can also have economic reasons. Indeed, collapse may be the outcome of an economic growth process which is inherently unsustainable. More precisely, we claim that several ancient societies collapsed because the form of economic development which they relied on eventually proved to be unable to sustain their standard of living. It is believed that the Únĕtice societies – central European Early Bronze Age - were among those that collapsed for that reason. A simple model is presented to demonstrate that, in this agricultural economy, the introduction of bronze mining and metallurgy led to unsustainable development and its subsequent collapse. |
| Keywords: | unsustainable development, Bronze Age, elite, economic surplus, mining productivity., Community/Rural/Urban Development, Research and Development/Tech Change/Emerging Technologies, N53, Q33, O13, E30, |
| Date: | 2015–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseet:202543&r=hpe |