nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2015‒10‒04
twenty papers chosen by
Erik Thomson
University of Manitoba

  1. ALLAIS ET LA CRITIQUE DU MODÈLE WALRASSIEN DE L’ÉCONOMIE DE MARCHÉ By Alain Béraud
  2. Friedrich Hayek and his visits to Chile By Bruce Caldwell; Leonidas Montes
  3. Structural interdependence in monetary economics: theoretical assessment and policy implications By Cavalieri, Duccio
  4. Doing it now, later, or never By Cingiz K.; Flesch J.; Herings P.J.J.; Predtetchinski A.
  5. An Experiment on Lowest Unique Integer Games By Takashi Yamada; Nobuyuki Hanaki
  6. Repeated Games with General Discounting By Ichiro Obara; Jaeok Park
  7. Homo Economicus in XXI Century By Rogozhnikova Varvara
  8. Conformist Preferences in Mixed-Motive Games By Naef, Michael; Sontuoso, Alessandro
  9. A Fine Rule From a Brutish World? An Experiment on Endogenous Punishment Institution and Trust By H. Sun; M. Bigoni
  10. Behavioural, Financial, and Health & Medical Economics: A Connection By Chia-Lin Chang; Michael McAleer; Wing-Keung Wong
  11. Robust Mechanisms: the curvature case By Vinicius Carrasco; Vitor Farinha Luz; Paulo Monteiro; Humberto Moreira
  12. EFFECTS OF IUS GENTIUM ON ROMAN ECONOMIC SYSTEM AND LEGAL PROCESS By Elvan Sütken
  13. Money is more than memory By M. Bigoni; G. Camera; M. Casari
  14. Doing evolution in economic geography By Andy Pike; Andrew Cumbers; Stuart Dawley; Danny MacKinnon; Robert McMaster
  15. Influential Publications in Ecological Economics Revisited By Costanza, Robert; Howarth, Richard B.; Kubiszewski, Ida; Liu, Shuang; Ma, Chunbo; Plumecocq, Gaël; Stern, David I.
  16. A Multidisciplinary-economic Framework of Analysis By P.K. Keizer
  17. Contracts and Trust By Bryan C. McCannon; Colleen Tokar Asaad; Mark Wilson
  18. THE POLITICAL ECONOMY OF LIBERAL DEMOCRACY By Mukand, Sharun; Rodrik, Dani author-workplace-Name: Harvard University
  19. Can growth be green? By Ian Gough
  20. Back to gold: Sterling in 1925 By Gerlach, Stefan; Kugler, Peter

  1. By: Alain Béraud (Université de Cergy-Pontoise, THEMA)
    Abstract: Alors qu’en 1943, Allais se présentait comme un disciple de Walras, il en vint à critiquer, à la fin des années 1960 le modèle moniste de l’économie de marché et à lui opposer le modèle pluraliste de l’économie de marchés. On analyse, ici, les divers aspects de cette critique. En 1943, Allais reprochait déjà à Walras d’avoir conçu un modèle statique et il avançait une modification de ce modèle, l’introduction des prévisions, qui permettait d’y introduire le temps, donc de développer une dynamique. A la fin des années 1960, ce qu’Allais critique c’est, avant tout, le processus d’ajustement. Walras admettait qu’il n’existe pour un bien qu’un seul prix et que les échanges ne sont effectifs qu’aux prix d’équilibre. Allais lui oppose un modèle où les prix utilisés sont spécifiques aux transactions considérées et où les marchandises sont échangées avant même que l’équilibre ne soit atteint. Il conclut que les théories actuelles de l’équilibre qui s’appuient sur les hypothèses du modèle walrassien doivent être reformulées. [Le modèle d’équilibre général de Walras] a été utile en son temps, mais son maintien dogmatique s’oppose aujourd’hui au progrès de la science économique. Allais (1994 : 92, note 21) Allais fut, d’abord, un disciple de Walras. Il lui a dédié son premier ouvrage et, plus tard, il soulignera que « l’oeuvre de Walras a marqué un tournant majeur dans l’histoire de la pensée économique et dans la transformation de l’Économique en une science véritable » (Allais, 1971 : 332). Mais, dès 1943, s’il s’appuie sur Walras, c’est pour aller plus loin. Quand il développe un modèle qu’il qualifie lui-même de walrassien, c’est pour établir un résultat dont Walras a, en vain, chercher la démonstration : sous quelles hypothèses peut-on affirmer que l’équilibre général est stable ? Quand il définit le cadre théorique dans lequel il raisonne, il soutient que l’économie politique pure s’est jusqu’alors limitée à l’étude de l’équilibre en un instant donné du temps. Il entend aller plus loin, établir la théorie de l’équilibre général à travers le temps. Il est ainsi conduit à introduire dans son analyse une hypothèse de prévision parfaite qui lui permet, en éliminant la notion de risque, de proposer une représentation simple des lois économiques et de rendre possible une analyse de la formation de l’intérêt dont, à son sens, ses prédécesseurs n’avaient pas pu rendre compte (Allais, 1994 [1943] : 33). Progressivement, après la publication du Traité, Allais réorienta ses recherches vers des thèmes qui ne faisaient guère référence à la théorie de l’équilibre général. Ce ne fut qu’une étape. À la fin des années 1960, il revint sur les questions qui avaient d’abord retenu son attention. Sa position a, cependant, profondément évolué. Il reste convaincu de la fécondité du concept d’équilibre général mais il est persuadé que les théories « qui ont été développées dans le sillage de Walras… présentent, malgré leur rigueur mathématique, de grandes faiblesses d’ordre économique et [pour celles qui utilisent la théorie des ensembles] une incompatibilité radicale avec les enseignements de l’observation » (Id., 1971 : 332). Elles se heurtent pour démontrer des propositions essentielles — la stabilité de l’équilibre et son optimalité — à des difficultés. Mais ces difficultés sont artificielles et tiennent simplement au modèle employé. Il faut donc abandonner le modèle d’économie de marché que Walras avait développé. La théorie de l’équilibre général doit être reformulée. Pour ce faire, Allais propose de s’appuyer sur la notion de surplus distribuable à partir de laquelle il élabore un modèle d’économie de marchés qu’il oppose au modèle walrassien. Il apparaît donc qu’il convient d’opposer les deux phases de l’oeuvre d’Allais. Dans un premier temps, il se présente comme un disciple dont l’objectif est de poursuivre les recherches de son maître en résolvant une série de questions auquel celui-ci n’a pu apporter de réponse. Dans un second temps, la critique devient radicale. Certes, Allais s’appuie toujours sur la notion fondamentale qu’avait avancée Walras, la notion d’équilibre général ; mais, il s’agit maintenant non de poursuivre l’oeuvre du maître mais de lui substituer une nouvelle approche, un nouveau modèle.
    Keywords: Development ;
    Date: 2015
    URL: http://d.repec.org/n?u=RePEc:ema:worpap:2015-10&r=all
  2. By: Bruce Caldwell; Leonidas Montes
    Abstract: F. A. Hayek took two trips to Chile, the first in 1977, the second in 1981. The visits were controversial. On the first trip he met with General Augusto Pinochet, who had led a coup that overthrew Salvador Allende in 1973. During his 1981 visit, Hayek gave interviews that were published in the Chilean newspaper El Mercurio and in which he discussed authoritarian regimes and the problem of unlimited democracy. After each trip, he complained that the western press had painted an unfair picture of the economic situation under the Pinochet regime. Drawing on archival material, interviews, and past research, we provide a full account of this controversial episode in Hayek’s life.
    Keywords: F. A. Hayek; Chile; Chicago boys; Augusto Pinochet; Salvador Allende; Milton Friedman; Centro de Estudios Publicos (CEP); El Mercurio
    JEL: B1 B2 B21 B25 B3 B4
    Date: 2015–09
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:63318&r=all
  3. By: Cavalieri, Duccio
    Abstract: This is a theoretical analysis of structural interdependence in monetary economics. Some recent attempts to integrate money and finance in the theory of income and expenditure are initially examined. The Sraffian dichotomic interpretation of classical political economy is refused. A version of the classical surplus approach devoid of separating connotations is sketched, where flows and stocks are consistently reconciled and net financial wealth vanishes in the aggregate. Marx’s law of value is considered and set aside, as historically outdated by the advent of cognitive capitalism. New Consensus and New Neoclassical Synthesis macroeconomic models are criticized from an orthodox Keynesian point of view. Two further results emerge from the analysis: the illegitimacy of Marx’s asymmetrical treatment of constant and variable capital in the theory of value and the suggestion of a correct method for measuring the unit cost of real capital. Some reasons for reconsidering in this perspective the traditional approaches to monetary theory and policy are indicated.
    Keywords: monetary theory; monetary policy; fiscal policy; structural interdependence; Sraffian dichotomy; post-Keynesian economics; SFCA; MMT; MEV
    JEL: B22 E12 E44 E5 E52 M41
    Date: 2015–07–09
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:65526&r=all
  4. By: Cingiz K.; Flesch J.; Herings P.J.J.; Predtetchinski A. (GSBE)
    Abstract: We study centipede games played by an infinite sequence of players. Following the literature on time-inconsistent preferences, we distinguish two types of decision makers, naive and sophisticated, and the corresponding solution concepts, nave -equilibrium and sophisticated -equilibrium. We show the existence of both naive and sophisticated -equilibria for each positive . Under the assumption that the payoff functions are upper semicontinuous, we furthermore show that there exist both naive and sophisticated 0-equilibria in pure strategies. We also compare the probability to stop of a naive versus a sophisticated decision maker and show that a sophisticated decision maker stops earlier.
    Keywords: Game Theory and Bargaining Theory: General; Consumer Economics: Theory; Welfare Economics: General; Conflict; Conflict Resolution; Alliances; Intertemporal Consumer Choice; Life Cycle Models and Saving;
    JEL: C70 D11 D60 D74 D91
    Date: 2015
    URL: http://d.repec.org/n?u=RePEc:unm:umagsb:2015022&r=all
  5. By: Takashi Yamada (Faculty of Global and Science Studies, Yamaguchi University, Japan); Nobuyuki Hanaki (Université Nice Sophia Antipolis; GREDEG-CNRS; IUF)
    Abstract: We experimentally study Lowest Unique Integer Games (LUIGs). In a LUIG, N (>3) players submit a positive integer up to M and the player choosing the smallest number not chosen by anyone else wins. LUIGs are simplified versions of real systems such as lottery games and Lowest/Highest Unique Bid Auctions that have been attracting attention from scholars, yet experimental studies are still scarce. Here, we consider four LUIGs with N = {3; 4} and M = {3; 4}. We find that (a) choices made by a majority of subjects over 50 rounds of a LUIG were not significantly different from that in the symmetric mixed-strategy Nash equilibrium (MSE) of the LUIG; however, (b) those subjects who behaved significantly differently from what the MSE predicts won the game more frequently than those who behaved similarly to what the MSE predicts.
    Keywords: Lowest Unique Integer Game, Laboratory Experiment
    JEL: C72 C92
    Date: 2015–09
    URL: http://d.repec.org/n?u=RePEc:gre:wpaper:2015-34&r=all
  6. By: Ichiro Obara (University of California); Jaeok Park (Yonsei University)
    Abstract: We introduce a general class of time discounting, which includes time-inconsistent ones, into repeated games with perfect monitoring. A strategy prole is called an agent subgame perfect equilibrium if there is no protable one-shot deviation at any history. We characterize strongly symmetric agent subgame perfect equilibria for repeated games with symmetric stage game. We nd that the harshest punishment takes different forms given different biases. When players are future biased, the harshest punishment is supported by a version of stick-and-carrot strategy. When players are present biased, the harshest punishment may take a more complex form. In particular, the worst punishment path may need to be cyclical. We also nd that the worst punishment payoff is different from the stage game minmax payoff even when players are patient. For some class of discounting, we show that the worst punishment payoff is larger than the stage game minmax payoff with present bias and smaller than the stage game minmax payo with future bias. We also characterize the set of limit equilibrium payoffs as the length of periods converges to 0, without changing the intertemporal structure of biases.
    Keywords: Hyperbolic Discounting, Present Bias, Repeated Game, Time Inconsistency
    JEL: C73 D03
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:yon:wpaper:2015rwp-84&r=all
  7. By: Rogozhnikova Varvara (Department of Economics, Lomonosov Moscow State University)
    Abstract: The article deals with the thesis, that the modern neoclassical model of «homo economicus» corresponds to the real human type, acting in all the spheres of Western and Russian social life today. In support to this hypothesis author comes up with two arguments: social-anthropological and ideological. The first one touches on the transformation in the mode of life of an individual and the whole societies of Western Europe and USA. As the result of this transformation it became possible to speak about the supremacy of the “capitalistic spirit” in the West to the middle of XIX century. The second argument addresses to the ideological basis of such a transformation, and present some evidences of the existence of the «homo economicus» in the Russian social-cultural area.
    Keywords: homo economicus, neoclassical economic theory, philosophy of economics, methodology of economics, neoliberalism.
    JEL: B40 B41 B5
    Date: 2015–09
    URL: http://d.repec.org/n?u=RePEc:upa:wpaper:0023&r=all
  8. By: Naef, Michael; Sontuoso, Alessandro
    Abstract: We examine a novel class of conformist preferences which falls within the realm of belief-dependent motivations in that the peers’ expectations about others’ behavior may affect every group-member’s welfare. Similar other-regarding motivations, like guilt-aversion, have been inferred from evidence of a belief-behavior correlation but the issue of causality has been disputed. In examining conformism we propose a design that verifies the presence of the relevant causality direction while ruling out alternative other-regarding motivations. Our data reveal “self-servingly conformist” behavior in that subjects choose to match their strategy to the peers’ expectations when it is in their interest to do so.
    Keywords: conformist preferences, consensus effects, belief-dependent utility, guilt aversion, social norms, trust
    JEL: C72 C91
    Date: 2015–09–13
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:66965&r=all
  9. By: H. Sun; M. Bigoni
    Abstract: By means of a laboratory experiment, we study the impact of the endogenous adoption of a collective punishment mechanism within a one-shot binary trust game. The experiment comprises three games. In the first one, the only equilibrium strategy is not to trust, and not to reciprocate. In the second we exogenously introduce a sanctioning rule that imposes on untrustworthy second-movers a penalty proportional to the number of those who reciprocate trust. This generates a second equilibrium where everybody trusts and reciprocates. In the third game, the collective punishment mechanism is adopted through majority-voting. In line with the theory, we find that the exogenous introduction of the punishment mechanism significantly increases trustworthiness, and to a lesser extent also trust. However, in the third game the majority of subjects vote against it: subjects seem to be unable to endogenously adopt an institution which, when exogenously imposed, proves to be efficiency enhancing.
    JEL: C72 C92 D72
    Date: 2015–09
    URL: http://d.repec.org/n?u=RePEc:bol:bodewp:wp1031&r=all
  10. By: Chia-Lin Chang (Department of Applied Economics Department of Finance National Chung Hsing University Taichung, Taiwan.); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan); Wing-Keung Wong (Department of Economics Hong Kong Baptist University Hong Kong, China)
    Abstract: This Opinion article briefly reviews some of the literature in behavioural and financial economics that are related to health & medical economics. We then discuss some of the research on behavioural and financial economics that could be extended to health & medical economics beyond the existing areas in theory, statistics and econometrics.
    Keywords: Behavioural economics; Financial economics; Health & medical economics; Theory, Statistics; Econometrics.
    JEL: G02 I11 O16 P34
    Date: 2015–09
    URL: http://d.repec.org/n?u=RePEc:ucm:doicae:1514&r=all
  11. By: Vinicius Carrasco (Department of Economics PUC-Rio); Vitor Farinha Luz (European University Institute and the Department of Economics, The University of British Columbia); Paulo Monteiro (FGV/EPGE); Humberto Moreira (FGV/EPGE)
    Abstract: This note considers the problem of a principal (she) who faces a privately informed agent (he) and only knows one moment of the distribution from which his types are drawn. Payoffs are non-linear in the allocation and the principal maximizes her worst-case expected profits. We recast the robust design problem as a zero-sum game played by the principal and an adversarial nature who seeks to minimize her expected payoffs. The robust mechanism and the worst case distribution are, then, the Nash equilibrium of such game. A robustness property of the optimal mechanism imposes restrictions on the principal’s ex-post profit function. These restrictions then lead to the optimal mechanism. The robust mechanism entails exclusion of low types and distortions at the intensive margin that (in a precise sense) are larger than what those that prevail in standard Bayesian mechanism design problems.
    Date: 2015–06
    URL: http://d.repec.org/n?u=RePEc:rio:texdis:642&r=all
  12. By: Elvan Sütken (Anadolu University, Faculty of Law)
    Abstract: In the course of time, Roman demographical structure had substantially altered as a result of Roman territorial expansionist policy. During the expansion of the Roman boundaries, at the beginning, law of conquered nations remained unchanged as a result of Roman state policy. Each conquered land’s community was allowed to sustain its own peculiar law system. However by the passage of time, Roman state had required to regulate the commercial and contractual relationships between Roman citizens and conquered lands’ communities. Furthermore, legal unity had to be ensured between different conquered nations which were gathered under Roman sovereignty. Considering the scope of application, Roman law was assorted as Ius Civile and Ius Gentium. Ius Civile was the law of Roman citizens. Ius Civile was the positive law of Romans. Chronologicaly, Ius Civile had priority to Ius Gentium. As the Romans required putting legal principles into practice that could be both enforced for Roman citizens and foreigners, then it was the time for Ius Gentium to arise. Ius Gentium had flexible and informal judicial conception although Ius Civile had strict and formal judicial conception. Coming to mention about the effects of Ius Gentium; in accordance with the movement in the field of law and business relationships, legal principles which had been unique to Roman citizens had to be changed and renovated according to daily needs of both native population and conquered lands’ communities; who were also called as foreigners. Furthermore, new types of legal transactions and contracts as hire (locatio conductio rei), partnership (societas), etc. had been put into practice as a result of flourishing business relationships among Roman citizens and foreigners. The classification in Roman Law as Ius Civile - Ius Gentium is an obscene and noticeable fact of Roman law’s evolution in time according to modifying conditions.
    Keywords: Roman ecomomic system, effects of ius gentium on Roman economy
    JEL: A13 A12 B00
    URL: http://d.repec.org/n?u=RePEc:sek:ibmpro:3005418&r=all
  13. By: M. Bigoni; G. Camera; M. Casari
    Abstract: Impersonal exchange is the hallmark of an advanced society and money is one key institution that supports it. Economic theory regards money as a crude arrangement for monitoring counterparts’ past conduct. If so, then a public record of past actions—or memory—should supersede the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equivalence between money and memory does not translate into an empirical equivalence. Monetary systems perform a richer set of functions than just revealing past behaviors, which are crucial in promoting large-scale cooperation.
    JEL: C70 C90 D03 E02
    Date: 2015–09
    URL: http://d.repec.org/n?u=RePEc:bol:bodewp:wp1030&r=all
  14. By: Andy Pike; Andrew Cumbers; Stuart Dawley; Danny MacKinnon; Robert McMaster
    Abstract: Evolutionary approaches in economic geography face questions about the relationships between their concepts, theories, methods, politics and policy implications. Amidst the growing but unsettled consensus that evolutionary approaches should employ plural methodologies, the aims here are, first, to identify some of the difficult issues confronting those working with different frameworks. The concerns comprise: specifying and connecting research objects, subjects and levels; handling agency and context; engaging and integrating the quantitative and the qualitative; comparing cases; and, considering politics, policy and praxis. Second, the purpose is to articulate a distinctive geographical political economy approach, methods and illustrative examples in addressing these issues. Bringing different views of evolution in economic geography into dialogue and disagreement renders methodological pluralism a means towards improved understanding and explanation rather than an end in itself. Confronting such thorny matters needs to be embedded in our research practices and supported by greater openness, more and better substantiation of our conceptual, theoretical and empirical claims, enhanced critical reflection, and deeper engagement with politics, policy and praxis.
    Date: 2015–09
    URL: http://d.repec.org/n?u=RePEc:egu:wpaper:1532&r=all
  15. By: Costanza, Robert; Howarth, Richard B.; Kubiszewski, Ida; Liu, Shuang; Ma, Chunbo; Plumecocq, Gaël; Stern, David I.
    Abstract: We revisit the analysis of Costanza et al. (2004, Ecological Economics) of influential publications in ecological economics to discover what has changed a decade on. We examine which sources have been influential on the field of ecological economics in the past decade, which articles in the journal Ecological Economics have had the most influence on the field and on the rest of science, and on which areas of science the journal is having the most influence. We find that the field has matured over this period, with articles published in the journal having a greater influence than before, an increase in citation links to environmental studies journals and a reduction in citation links to mainstream economics journals, and possibly a shift in themes to a more applied and empirical direction.
    Keywords: Bibliometrics, ecological economics
    JEL: A12 A14 Q57
    Date: 2015–09–27
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:66933&r=all
  16. By: P.K. Keizer
    Abstract: Human motivation offers energy, and circumstances offer possibilities. Only in combination does human motivation and circumstance yield action. Over time, desires and opportunities to satisfy them closely interact with one another. Orthodox economics analyzes economic motivation in interaction with scarce natural resources. It assumes that perfect rationality and non-sociality create a so-called economic world and analyzes the economic mechanism of allocation of scarce resources. Neoclassical economists use this world as a theoretical foundation for their empirical research. Heterodox economics rejects this strategy of isolating one motivation, a strategy that ignores the psychic and the social problem. However, the heterodox idea of human motivation, being variable and endogenous, is badly analyzed. This leads the author to construct a psychic and a social world that is completely comparable with the agent-structure model of the economic world. The three isolated worlds are integrated by analyzing the interactions between the three worlds. In the integrated world, the economic structure, the psychic structure and the social structure are one another’s foundations. This human world gives familiar economic concepts such as utility, efficiency, rationality, price, value, cost and benefit a different meaning. Similarly, psychic concepts such as Self, willpower and personality and social concepts such as status, power, culture and morality are given different meanings. To make the model more realistic, it should be made dynamic and historical and be placed in the context of the world as an open system.
    Keywords: orthodox economics, neoclassical economics, rationality, morality, multidisciplinary economics, us versus them, cognitive closure
    Date: 2015
    URL: http://d.repec.org/n?u=RePEc:use:tkiwps:1506&r=all
  17. By: Bryan C. McCannon (West Virginia University, College of Business and Economics); Colleen Tokar Asaad (Baldwin-Wallace University); Mark Wilson (Saint Bonaventure University)
    Abstract: Social preferences and third-party enforcement of formal contracts are two mechanisms that facilitate performance of an agreement. The standard argument is that formal contracting substitutes when social preferences are lacking. We explore the hypothesis that social preferences and contract enforcement are complements. We measure social preferences from a Trust Game and use it is an explanatory variable in a contract game. We find that both increased contract enforcement and high trusting preferences lead to enhanced rates of contract formation and larger investments. There is an interaction effect where trusting individuals make larger investment agreements, specifically when enforcement is greater. Thus, contracts and social preferences complement one another.
    Keywords: contract, experiment, risk, social preference, trust
    JEL: D86 K12 C91
    Date: 2015–05
    URL: http://d.repec.org/n?u=RePEc:wvu:wpaper:15-15&r=all
  18. By: Mukand, Sharun (University of Warwick); Rodrik, Dani author-workplace-Name: Harvard University
    Abstract: We distinguish between three sets of rights – property rights, political rights, and civil rights – and provide a taxonomy of political regimes. The distinctive nature of liberal democracy is that it protects civil rights (equality before the law for minorities) in addition to the other two. Democratic transitions are typically the product of a settlement between the elite (who care mostly about property rights) and the majority (who care mostly about political rights). Such settlements rarely produce liberal democracy, as the minority has neither the resources nor the numbers to make a contribution at the bargaining table. We develop a formal model to sharpen the contrast between electoral and liberal democracies and highlight circumstances under which liberal democracy can emerge. We discuss informally the difference between social mobilizations sparked by industrialization and decolonization. Since the latter revolve around identity cleavages rather than class cleavages, they are less conducive to liberal politics.
    Keywords: civil rights, political rights
    Date: 2015
    URL: http://d.repec.org/n?u=RePEc:cge:wacage:240&r=all
  19. By: Ian Gough
    Abstract: This short article, based on a presentation at the London School of Economics, criticizes the common opinion that “green growth” offers a relatively painless – some even say pain-free – transition path for capitalist economies. After a brief summary of the daunting arithmetic entailed in combining fast decarbonization with continuing growth, the article advances 3 propositions. First, market-based carbon mitigation programs, such as carbon trading, cannot be sufficient and must be coupled with other policy pillars that foster transformative investment and widespread regulation. Second, a political economy of climate policy needs to draw on the lessons of comparative social policy research, which emphasizes the role of international pressures, interests, institutions, and ideas. Taking these into account gives a more realistic perspective on climate policy making in today’s neoliberal world. Third, more radical policies on both consumption and production are called for, to ensure that carbon mitigation is not pursued at the expense of equity and social welfare. These include policies to restrain high-carbon luxury consumption and a transition toward shorter paid working time. The conclusion is that a realistic program of green growth will be immensely difficult and entail radical political change.
    Keywords: climate change; green growth; social policy; political economy
    JEL: N0
    Date: 2015–07
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:63781&r=all
  20. By: Gerlach, Stefan; Kugler, Peter
    Abstract: Expectations of Sterling returning to Gold have been disregarded in empirical work on the US dollar - Sterling exchange rate in the early 1920s. We incorporate such considerations in a PPP model of the exchange rate, letting the probability of a return to gold follow a logistic function. We draw several conclusions: (i) the PPP model works well from spring 1919 to spring 1925; (ii) wholesale prices outperform consumer prices; (iii) allowing for a return to gold leads to a higher speed of adjustment of the exchange rate to PPP; (iv) interest rate differentials and the relative monetary base are crucial determinants of the expected return to gold; (v) the probability of a return to Gold peaked at about 72% in late 1924 and but fell to about 60% in early 1925; and (vi) our preferred model does not support the Keynes' view that Sterling was overvalued after the return to gold.
    Keywords: Gold Standard,Sterling,exchange rate,PPP,expectations
    JEL: E5 F31 N1
    Date: 2015
    URL: http://d.repec.org/n?u=RePEc:zbw:cfswop:515&r=all

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