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on History and Philosophy of Economics |
| By: | Mankiw, N Gregory; Reis, Ricardo |
| Abstract: | This essay discusses the role of Milton Friedman's presidential address to the American Economic Association, which was given a half century ago and helped set the stage for modern macroeconomics. We discuss where macroeconomics was before the address, what insights Friedman offered, where researchers and central bankers stand today on these issues, and (most speculatively) where we may be heading in the future. |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12442&r=hpe |
| By: | Yoann Verger (ECOSYS - Ecologie fonctionnelle et écotoxicologie des agroécosystèmes - AgroParisTech - INRA - Institut National de la Recherche Agronomique) |
| Abstract: | A rich literature exists about the way to handle non-renewable natural resources in the context of classical theory. This article sums up the different approaches that we could consider when we calculate the revenue of the owner of a non-renewable natural resource in a Sraffian framework. It clarifies the concepts of differential rent, depreciation of wasting assets, Hotelling rent, and rent as a share of the product, and links this last concept with some empirical facts about non-renewable natural resource extraction industries. |
| Abstract: | Une riche littérature existe concernant la façon de considérer les ressources naturelles non-renouvelables dans la théorie classique. Cet article résume les différentes approaches que nous pouvons considérer lorsque l'on calcule le revenu d'un propriétaire d'une ressource naturelle non-renouvelable dans un système Sraffien. Il clarifie les concepts de rente différentielle, dépréciation d'un actif décroissant, rente d'Hotelling, et rente comme partage du produit, et lie ce dernier concept avec quelques faits empiriques concernant les industries extrayant les ressources naturelles non-renouvelables. |
| Keywords: | non-renewable natural resource, rent, extractive industry,Sraffa, Hotelling,ressourcenaturelle non-renouvelable,rente,industrie extractive |
| Date: | 2017–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01596166&r=hpe |
| By: | Drew Fudenberg; Kevin He |
| Abstract: | We define Player-Compatible Equilibrium or "PCE," which imposes cross-player restrictions on magnitudes of the players' "trembles" onto different actions. These restrictions are inspired by the idea that trembles correspond to deliberate experiments by inexperienced agents who are unsure of the prevailing distribution of strategies in opponent populations. We show that PCE selects the "intuitive" equilibria in a number of examples where trembling-hand perfect equilibrium (Selten, 1975) and proper equilibrium (Myerson, 1978) have no bite. We also provide a learning-based microfoundation for PCE in some easy-to-analyze classes of games. Finally, we conduct a lab experiment based on one of our examples and verify PCE leads to better predictions than other equilibrium concepts. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1712.08954&r=hpe |
| By: | Walkowitz, Gari |
| Abstract: | Motivated by methodological concerns, theoretical considerations, and evidence from previous studies, this paper makes a contribution to conducting dictator-game experiments under resource constraints. Using a holistic and strictly controlled approach, we systematically assess the validity of common cost-saving dictator-game variants. We include five common approaches and compare them to a standard dictator game: involving fewer receivers than dictators; paying only some subjects or decisions; role uncertainty at the time of the transfer decision; a combination of random decision payment and role uncertainty. To test the validity of subjects’ dictator-game decisions, we relate them to complementary individual difference measures of generosity: social value orientation, personal values, and a donation to charity. In line with previous evidence, our data show that dictator behavior is quite sensitive to the applied methods. The standard version of the dictator game has the highest validity. Involving fewer receivers than dictators and not paying for all decisions yields comparably valid results. These methods may, therefore, represent feasible alternatives for the conduct of dictator games under contraints. By contrast, in the dictator-game variants where only some subjects are paid or where subjects face uncertainty about their final player role, the expected associations with other measures of generosity are distorted. Under role uncertainty, generosity is also biased upwards. We conclude that these methods are inappropriate when the researchers are interested in valid individual measures of generosity. |
| Keywords: | Dictator Game, Costs, Incentives, Unbalanced Matching, Random Payment, Role Uncertainty, Social Value Orientation, Personal Values, Donation, Methodology, Experiment |
| JEL: | C72 C91 D3 |
| Date: | 2017–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83309&r=hpe |
| By: | Schilirò, Daniele |
| Abstract: | The present contribution examines the emergence of expected utility theory by John von Neumann and Oskar Morgenstern, the subjective the expected utility theory by Savage, and the problem of choice under risk and uncertainty, focusing in particular on the seminal work “The Utility Analysis of Choices involving Risk" (1948) by Milton Friedman and Leonard Savage to show how the evolution of the theory of choice has determined a separation of economics from psychology. |
| Keywords: | Rational Choice; Risk; Uncertainty; Expected Utility Theory |
| JEL: | C70 D80 D81 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83366&r=hpe |
| By: | Timo Henckel; Gordon D. Menzies; Peter G. Moffatt; Daniel J. Zizzo |
| Abstract: | We present an experiment where subjects sequentially receive signals about the true state of the world and need to form beliefs about which one is true, with payoffs related to reported beliefs. We control for risk aversion using the Offerman et al. (2009) technique. Against the baseline of Bayesian updating, we test for belief adjustment under-reaction and over-reaction and model the decision making process of the agent as a double hurdle model where agents first decide whether to adjust their beliefs and then, if so, decide by how much. We find evidence for periods of belief inertia interspersed with belief adjustment. This is due to a combination of: random belief adjustment; state dependent belief adjustment, with many subjects requiring considerable evidence to change their beliefs; and Quasi-Bayesian belief adjustment, with insufficient belief adjustment when a belief change does occur. |
| Keywords: | belief revision, double hurdle model, expectations, overreaction, under re-action |
| JEL: | C34 C91 D03 D84 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2018-01&r=hpe |
| By: | Vincent Boucher |
| Abstract: | I present a behavioural model of network formation with positive network externalities in which individuals have preferences for being part of a clique. The behavioural model leads to an associated supermodular (Topkis, 1979) normalform game. I show that the behavioural model converges to the greatest Nash equilibrium of the associated normal-form game. I propose an approximate Bayesian computation (ABC) framework, using original summary statistics, to make inferences about individuals' preferences, and provide an illustration using data on high school friendships. |
| Keywords: | Network formation, Supermodular Games, Approximate Bayesian Computation |
| JEL: | D85 C11 C15 C72 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:crrecr:1710&r=hpe |
| By: | Gotoh, Reiko |
| Abstract: | This article is a revised version of the paper "From Liberal Paradox to Capability Approach: Amartya Sen's evolving concept of rights" presented at a special session 'Amartya Sen's Philosophy and its Policy Implications' in the 72nd conference of the Japan Economic Policy Association held at Kokushikan University in Tokyo on May 30-31, 2015. Hitotsubashi University Policy Forum and the 2nd Symposium on Normative Economics 'Illusion of the Self, Absence Others: Methodological Reflection on Economics' held at Hitotsubashi Hall on November 18th, 2015.) I sincerely thank its organizers and participants. I also benefited greatly from discussants at the research seminar |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rcnedp:1&r=hpe |
| By: | Hetzel, Robert L. (Federal Reserve Bank of Richmond) |
| Abstract: | In his great work A History of the Federal Reserve System, vol. 1, Allan Meltzer contended that monetary policymakers in the Depression simply ignored the quantity theoretic prescriptions that would have prevented contractionary monetary policy. Practically, he was arguing that the Fed should have accepted the responsibilities for economic stabilization now taken for granted with the modern concept of a central bank. In reality, decades of monetarist criticism had to pass before the Fed accepted both responsibility for the behavior of the price level and economic stabilization. In effect, Meltzer’s contention about the self-evident truth of quantity theory ideas ignored the monumental task that lay ahead for the monetarists. |
| Keywords: | federal reserve system; central bank; monetary policy |
| JEL: | E5 N2 |
| Date: | 2018–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:18-02&r=hpe |
| By: | Hetzel, Robert L. (Federal Reserve Bank of Richmond) |
| Abstract: | Since the establishment of the Federal Reserve System in 1913, policymakers have always pursued the goal of economic stability. At the same time, their understanding of the world and of the role of monetary policy has changed dramatically. This evolution of views provides a laboratory for understanding what kinds of monetary policy stabilize the economy and what kinds destabilize it. |
| Keywords: | federal reserve; monetary policy |
| JEL: | E52 E58 |
| Date: | 2018–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:18-01&r=hpe |
| By: | Epstein, Gil S. (Bar-Ilan University); Gang, Ira N. (Rutgers University) |
| Abstract: | Can a society suffering contests between rich and poor achieve good governance in the face of endemic corruption? We examine a stylized poor state with weak institutions in which a "culture of evasion" damages state authority. Many evade tax payments, limiting the state's economic development capability. In the face of extensive corruption, it is challenging for the state to establish and implement policies reflecting good governance; for example, a government that is accountable and transparent, efficient and effective, and follows the rule of law. The rich and poor possess different views on what is the appropriate level of enforcing proper payments of taxes due. The government needs to design an effective tax administration policy that minimizes corruption and is sensitive to the present and future needs of society. To do this it must understand what drives such widespread corruption. |
| Keywords: | governance, tax administration, corruption, rent-seeking |
| JEL: | O12 O15 D82 G38 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11149&r=hpe |
| By: | Anwar Shaikh (Department of Economics, New School for Social Research) |
| Abstract: | The treatment of skills has always been a problem within the classical tradition. Smith, Ricardo and Marx explicitly note that labor of different qualities must be reduced to a common standard. On the argument that relative wages largely reflect the qualitative differences among types of labor, they all propose to use relative wages as proxies for qualities. Smith identifies two sets of factors underlying relative wages: those specific to the type of employment itself, and those arising from political interventions. The former case in turn contains compensation for the pleasantness or unpleasantness of the type of work, its risk and volatility, its required degree of trust, and the difficulty and cost of acquiring the necessary skills. This paper focuses on the skill issue alone in order to compare it to the orthodox notion of human capital as a principal factor in the determination of relative wages. |
| Keywords: | Skilled labor, Classical economics |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1801&r=hpe |
| By: | Boyer, Marcel; Ross, Thomas W.; Winter, Ralph |
| Abstract: | Competition policy in Canada and elsewhere has changed remarkably over the last fifty years – in large measure due to advances in economics. In this article we trace the impact of developments in industrial organization on the three central areas of competition policy: cartels, single firm conduct and mergers. We focus on Canadian competition policy, but draw comparisons with developments in the United States and Europe. |
| JEL: | K21 L40 L41 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:32260&r=hpe |
| By: | Yoshiro Tsutsui (Faculty of Economics, Konan University) |
| Abstract: | This paper explores studies concerning the effect of marriage on happiness and reports the followings. Those who marry are happier than those who don ft. There exists bilateral causality between marriage and happiness. Happiness rises with marriage, but thereafter begins to decline shortly. Whether the adaptation is perfect or not is still undetermined. Why people get married? What kind of couple get married and become happy? Becker (1973) proposed the model of household production, and demonstrated that while the division of labor in a household is efficient, husband and wife who have similar traits are often efficient. The latter statement is known as assortative mating hypothesis in psychology and sociology and many studies have reported that couples who have similar values and/or personality get married and become happy |
| Keywords: | subjective happiness; marriage; adaptation; assortative mating hypothesis |
| JEL: | I31 J12 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1801&r=hpe |
| By: | Denis Cogneau (Institut de Recherche pour le Développement (IRD), PSE - Paris School of Economics); Yannick Dupraz (PSE - Paris School of Economics) |
| Abstract: | This paper makes a selective review of the recent economic literature studying the effect of historical institutions on economic development in Africa. We first discuss a few conceptual issues implied by the measurement of institutions, then present the data gathered by anthropologist G. P. Murdock and their main critiques. A growing number of works make a new use of these data while trying to show that some "ethnic" precolonial institutions are fundamental determinants of present-day differences in development. We comment upon these works and contrast them with others which rather relativize the institutional differences inherited from the colonial period. We finally argue that comparisons of case studies are more promising than cross-sectional studies based on ill-controlled variations |
| Abstract: | Cet article effectue une revue sélective de travaux récents d’économistes étudiant l’impact des institutions historiques sur le développement économique en Afrique. Nous discutons d'abord quelques questions conceptuelles impliquées par la mesure des institutions, puis présentons les données rassemblées par l’anthropologue G. P. Murdock et leurs principales critiques. Plusieurs travaux mobilisent à nouveau ces données pour montrer que certaines institutions "ethniques" précoloniales constituent des déterminants fondamentaux des différences de développement contemporaines. Nous commentons ces travaux puis les comparons avec d'autres qui relativisent plutôt les différences institutionnelles héritées de la période coloniale. Nous défendons en conclusion que des comparaisons d'études de cas sont plus fructueuses que des études transversales reposant sur des variations mal contrôlées. |
| Keywords: | Development,Colonization,Ethnicity,Africa,Institutions,Afrique,Colonisation,Développement,Ethnicité |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01517144&r=hpe |
| By: | Roger Koenker (Institute for Fiscal Studies and University of Illinois) |
| Abstract: | Since Quetelet's work in the 19th century social science has iconi fied "the average man", that hypothetical man without qualities who is comfortable with his head in the oven, and his feet in a bucket of ice. Conventional statistical methods, since Quetelet, have sought to estimate the effects of policy treatments for this average man. But such effects are often quite heterogenous: medical treatments may improve life expectancy, but also impose serious short term risks; reducing class sizes may improve performance of good students, but not help weaker ones or vice versa. Quantile regression methods can help to explore these heterogeneous effects. Some recent developments in quantile regression methods are surveyed below. |
| Keywords: | quantile regression, treatment effects, heterogeneity, causal inference |
| Date: | 2017–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:36/17&r=hpe |
| By: | Andres Rodriguez-Pose |
| Abstract: | Persistent poverty, economic decay, and lack of opportunities are at the root of considerable discontent in declining and lagging-behind areas the world over. Poor development prospects and an increasing belief that these places have 'no future' - as economic dynamism has been posited to be increasingly dependent on agglomeration economies - have led many of these so-called 'places that don't matter' to revolt against the status quo. The revolt has come via an unexpected source: the ballot-box in a wave of political populism with strong territorial, rather than social foundations. I will argue that the populist wave is challenging the sources of existing well-being in both the less-dynamic and the more prosperous areas and that better, rather than more, place-sensitive territorial development policies are needed in order to find a solution to the problem. Place-sensitive development policies need, however, to stay clear of the welfare, income-support, and big investment projects of past development strategies if they are to be successful and focus on tapping into untapped potential and on providing opportunities to those people living in the places that 'don't matter'. |
| Keywords: | Economic development, territorial inequality, regions, cities, populism, place-sensitive policies |
| JEL: | R11 O3 O43 D02 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1802&r=hpe |
| By: | Allen, Lindsay; Barkowski, Scott; Harris, Matthew; McLaughlin, Joanne Song; Pohl, R. Vincent; Skira, Meghan; Waldron, James |
| Abstract: | We describe a bingo-style game intended to be played at economics conferences. Early results from implementation of the game by economists at conferences suggest that fun increases more than a full standard deviation. Further study of the effects of the game are ongoing. |
| Keywords: | Bingo; Conferences; Fun |
| JEL: | Y90 |
| Date: | 2017–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83074&r=hpe |