nep-hpe 2014-01-10, 9 papers

NEP: New Economics Papers
History and Philosophy of Economics

Edited by: Erik Thomson
University of Manitoba
Issue date: 2014-01-10
Papers: 9

Note: Access to full contents may be restricted.
NEP is sponsored by the School of Economics and Finance of Victoria University of Wellington.
To subscribe/unsubscribe follow this link

In this issue we have:

  1. The Road to Market Serfdom: Why Economics is Not a Science and How to Fix it. Freeman, Alan
  2. John Bates Clark’s Conception of Capital McCain, Roger
  3. Say’s Law: A Rigorous Restatement Kakarot-Handtke, Egmont
  4. Genes, security, tolerance and happiness Ronald Inglehart; Svetlana Borinskaya; Anna Cotter; Jaanus Harro; Ronald C. Inglehart; Eduard Ponarin; Christian Welzel
  5. Reinventing the Kantean Peace: The Emerging Mass Basis of Global Security Ronald Inglehart; Christian Welzel
  6. Culture, Labour, and Resources: Principles of a Practical Alternative Growth Path Freeman, Alan
  7. “OLD TESTAMENT” MORALITY AND THE “TRADITIONAL” FAMILY Konstantin Yanovskiy; Sergey Shulgin
  8. Entrepreneurship, Innovation and the Good Life: Reflections on Edmund Phelps’ Mass Flourishing Henrekson, Magnus
  9. De Walras à Vanek. Coopération et politique Alain Alcouffe; Marius Chevallier; J. Prades


  1. The Road to Market Serfdom: Why Economics is Not a Science and How to Fix it.
    Date: 2013-05-01
    By: Freeman, Alan
    This paper was presented to the May 2013 conference of the Postglobalization Initiative in Moscow, and deals with the function of economics in the modern world order. It seeks to explain why, as a profession (notwithstanding individual exceptions) economics failed to predict the crisis that opened in 2007; why it then failed to foresee its length and depth; and why it proposes no solutions that could bring it to an end. The paper challenges economics’ most fundamental claim, that it conducts itself as a science, arguing that it instead behaves as a religious system for making and justifying political decisions whose core belief is market perfection: the notion that the combination of private property in production with universal commodification is not only optimal, but cannot fail. The paper proposes a radical new conception of the ethical duty of economists as resisting untruth, which it can do by conducting itself as a pluralist science. To this end, the paper introduces a distinction between two functions of knowledge: its exoteric function through which society arranges to control nature, and its esoteric function which organises, within a rational structure, systems of law, ethics, morality, and their relations to each other. In science, the exoteric predominates over the esoteric. In religion, the reverse is the case. This explains the real function of economics, which is a disguised normative system rooted in the primary principle of market perfection. Its prescriptions are derived not by the normal scientific method of testing a variety of theories against the evidence, but by the elevation of this supposition into an unchallengeable dogma. It operates as a monotheoretic body of knowledge in which, at any given time and facing any given problem, only one unique answer is offered, denying the users of economics the basic democratic and scientific right to choose between a variety of answers on the basis of their own independent assessment of both the evidence and the presuppositions of the theories from which the prospective answers are deduced. The primary mechanism of its religious function lie therefore in its methods of theoretical selection: it permits the promulgation and indeed, development, only of those theories which yield predictions consistent with the dogma of market perfection. It is constructed to suppress any body of theory which leads to conclusions inconsistent with the assumption of market perfection, most notably those, such as the theories of Marx and Keynes, which demonstrate that the market system is self-contradictory – that is to say, that it acts so as to undermine the basis for its own existence. The more likely it is that a given theory may lead to such conclusions, the more thoroughly it is suppressed. In consequence, those theories that escape the suppressive net of economics are precisely those in which the present social order is presented as not merely optimal but natural, inevitable and eternal. Interference with this market then becomes a crime against nature. All private benefits of the property-owners become the result of natural forces: they are rich because nature intended them to be. Take their riches from them, and things can only get worse. Poverty, destitution, famine: these are sad but inevitable consequences of nature. Any policy designed to offset or overcome them is misguided. Nature, in a word, has been enthroned as a God, by excluding humans from Nature. I employ the term market serfdom to characterise such a system, because it removes choice from the field. Human agency is itself designated a crime against nature. Hayek and his followers, the paper, have erred in making an issue of the claim that ‘serfdom’ comes from interfering with the market: Actually they propose that they only course open to humanity is to submit to the market. His is the freedom of the slave who accepts his destiny. We have no choice but what the market ordains. Economics, as we now know it, is the theoretically perfected manifestation of this doctrine, just as late mediaeval Catholicism was the perfected manifestation of the doctrine of submission to the established aristocratic and monarchic order. The paper then analyzes the two principal mechanisms by which the profession of economics has arrived at this point: selection for conformity and institutional delegitimation, and briefly outlines how ‘assertive pluralism’ could, if applied systematically, restore the study of political economy to the status of a science. Slides, and a video of the presentation and discussion, will be made available through the link to this paper at
    Keywords: Value, Price, Money, Labour, Marx, MELT, Okishio, TSSI, temporalism, rate of profit
    JEL: B1 B4 B5
  2. John Bates Clark’s Conception of Capital
    Date: 2013-12-01
    By: McCain, Roger (School of Economics LeBow College of Business Drexel University)
    This paper revisits the economic theory of John Bates Clark, with specific reference to his concept of capital, which seems very little remembered. For Clark, capital is to be distinguished from capital goods and is a resource that is at once immaterial and, in routine circumstances, permanent. Drawing on the original definition of holism in the writings of General the Right Honorable Jan Christiaan Smuts, it is argued that Clark’s conception is holist rather than (as in the case of other concepts of capital and most other economic theory) reductionist. That is, for Clark capital is an emergent property of a market equilibrium in or near equilibrium. This poses questions as to whether the concept can be extended to other economic forms, such as central planning, or indeed can be applicable to a capitalist economy constantly in the process of self-transformative flux.
    Keywords: Capital; general equilibrium; holism; reductionism
    JEL: B13
  3. Say’s Law: A Rigorous Restatement
    Date: 2013-12-28
    By: Kakarot-Handtke, Egmont
    Say’s Law has passed through various conceptual frameworks. As the next logical step, this paper provides a rigorous restatement in structural axiomatic terms. The main reason is that previous attempts have been methodologically unsatisfactory. Standard economics rests on behavioral assumptions that are expressed as axioms. Axioms are indispensable to build up a theory that epitomizes formal and material consistency. The crucial flaw of the standard approach is that human behavior does not lend itself to axiomatization. Small wonder that the accustomed attempt to explain how the economy works met with scant success. This battered also the discussion about Say’s Law.
    Keywords: new framework of concepts; structure-centric; axiom set; consumption economy; Profit Law; simulation; market clearing; budget balancing
    JEL: B59 C63 E10
  4. Genes, security, tolerance and happiness
    Date: 2013
    By: Ronald Inglehart (Higher School of Economics)
    Svetlana Borinskaya (Institute of General Genetics, Moscow, Russia)
    Anna Cotter (University of Michigan)
    Jaanus Harro (Department of Psychology, University of Tartu, Estonian Centre of Behavioral and Health Sciences)
    Ronald C. Inglehart (University of Michigan)
    Eduard Ponarin (Higher School of Economics)
    Christian Welzel (Center for the Study of Democracy, Leuphana University, Scharnhorststr.)
    This paper discusses correlations between certain genetic characterestics of the human populations and their aggregate levels of tolerance and happiness. We argue that a major cause of the systematic clustering of genetic characteristics may be climatic conditions linked with relatively high or low levels of parasite. This may lead certain populations to develop gene pools linked with different levels of avoidance of strangers, which helped shape different cultures, both of which eventually helped shape economic development. Still more recently, this combination of distinctive cultural and economic and perhaps genetic factors has led some societies to more readily adopt gender equality and high levels of social tolerance, than others. More tolerant societies tend to be happier because they create a more relaxed environment conducive to happiness.
    Keywords: genetic research, World Values Survey, happiness, tolerance.
    JEL: E11
  5. Reinventing the Kantean Peace: The Emerging Mass Basis of Global Security
    Date: 2013
    By: Ronald Inglehart (Higher School of Economics)
    Christian Welzel (Center for the Study of Democracy, Leuphana University, Scharnhorststr.)
    This article demonstrates that inter-state peace is underpinned by an increasingly solid mass basis: representative survey data from around the world evidence a massive decline in people’s willingness to sacrifice their lives in war. To explain this finding, we test and confirm Welzel’s Evolutionary Emancipation Theory (EET). When improving existential conditions in a society turn most people’s lives from a source of threats to suffer into a source of opportunities to thrive, people adopt ‘emancipative values’: to allow themselves and others to take advantage of life’s widened opportunities, people increasingly support and tolerate universal freedoms. This emancipatory trend is most significant in a field in which the fixation of traditional survival norms on high fertility erected the strongest resistance against emancipation: reproductive freedoms. As a direct consequence of the emancipatory trend, people’s willingness to sacrifice their own and other people’s lives in war has dramatically declined. Hence, the emancipatory trend is a pacifist force that makes it increasingly difficult for government—especially in democracies—to find public support for waging wars
    Keywords: Evolutionary Emancipation Theory, World Values Survey, war and peace
    JEL: E11
  6. Culture, Labour, and Resources: Principles of a Practical Alternative Growth Path
    Date: 2013-04-02
    By: Freeman, Alan
    This paper was due to be presented to the 2013 conference of the World Association for Political Economy, in Florianopolis, Brasil. In the event, the author was unable to attend. The paper summarises the main conclusions of ten years of research into the Creative Industries in London and the UK, culminating in a report for the English-based research foundation NESTA. The author was responsible for this research. I try to draw out the policy conclusions for economic and human development addressing three fundamental structural problems: (1) In what technologies should a modernising, developmental strategy focus? (2) What is the relation between economic and human development and how can the latter be assured by the course of the first? (3) What technological and social choices will make it possible both to expand economic activity and to reduce the consumption of resources, with all the attendant risks that beset modern development strategies including dependency on resource exploitation and the sustainability of the chosen growth path With few notable exceptions, social theory has failed to grasp the significance of the Creative Industries, consigning to a backwater a development which offers answers to the economic crisis, the social problems of a deeply unequal world, and to resource depletion and rape. Culture has become a ‘non-economic’ opposite to political economy; neither economists nor cultural theorists grasp the theoretical instruments needed to understand that culture is in fact the most economically important human activity, once the economy is grasped, in a rounded way, to include the whole of social reproduction. The principal obstacle to theoretical and practical advance is the inheritance, both material and spiritual, of a fading epoch dominated by mechanisation. The primary course of present-day accumulation is to reduce labour to a simple mechanical form, and then replace humans by machines. The primary drive of culture is the opposite. The creative industries show that the present course of economic development is bumping up against absolute limits. This is because the resource that they require to grow is non-mechanical labour, which cannot be replaced by machinery. The normal mechanism of accumulation – the acquisition of material and hence excludable ‘things’ no longer works. They also illustrate a fundamental limit in the structure of demand. The source of demand for cultural products is a mix of the luxury consumption of the capitalists, and the ‘moral’ or socially-defined component of the wage, both of which are primarily non-material. As the world passes material satiety and lurches into material overconsumption, even as it consigns three quarters of its population to absolute deprivation, new material sources of demand are impossible to find, and new private demand is increasingly confined to the cultural and spiritual domain, where it takes the morbid forms of lust to possess, dominate and outdo. These trends between them offer a sustainable path forward for humanity in the shape of growth in demand for labour services, which would be, in Mark Swilling’s terminology, ‘resource-decoupled’, decreasing the consumption of resources whilst growing the use and emancipatory nature of human labour. The paper will address the fundamental obstacles to realising this , including those created by a mode of production so far unable to transition from investing in things to invest in humans. This poses an especial challenge for policy, since the growth of the creative industry sector manifests itself in a new and vibrant commercial sector, yet depends on long-term investment in both in the artistic and cultural formation of performers and producers, and in the general cultural level of society, including careful attention to the changed role of urban spaces and the interaction between cultural activity and new technology. This paper is based on a lecture given to the Chinese Academy of Social Sciences in November 2012. It builds on a substantial and scientifically well-grounded body of international research, which is now beginning to receive some serious attention in policy circles, by drawing out the above vital conclusions, and demonstrating their scientific validity. JEL codes: O10; N0; Z1
    Keywords: Crisis; Development; Growth; Inequality; State; Culture; Environment; Technology; Creativity; investment’ BRICS
    JEL: N0 O10 Z1
    Date: 2013
    By: Konstantin Yanovskiy (Gaidar Institute for Economic Policy)
    Sergey Shulgin (Russian Presidential Academy of National Economy and Public Administration)
    In this paper we consider questions of morality as a factor impacting trust in society, as an important element of the “soft” infrastructure. Morality is the institution which, if it is maintained in an appropriate condition, is capable of significantly raising the efficacy level of the basal institutions, including the institution of private property. Morality is often gestured toward in political and research discussions, for instance, for purposes of eliminating or establishing artificial borders and constraints upon freedom of discussion. Morality raises the level of trust among market agents, both among those directly acquainted with each other and among those who have never met each other before but hold the same moral views in common. Besides, morality lowers the costs of constructing and implementation of formal institutions which protect private property, as well as institutions friendly to the market. The Government’s pushing out the institution of the family and societal morality is largely bound up with the common mechanism for transferring individual responsibility to society, and the responsibility of society to the Government. The Government is interested in maximum resource use and maximal control. Bringing Government controls to a maximum possible level runs counter to the existence of any limitations, among which morality is the most powerful and most stable one. The foundation of the “liberation” of the individual from responsibility and from morality hails from the stimuli spawned by the institution of universal suffrage.
    Keywords: soft infrastructure, universal moral values, to support private property, to deter redistribution; moral arguments vs. economic efficiency.
    JEL: B41 B52 J12 K36 H56 Z12
  8. Entrepreneurship, Innovation and the Good Life: Reflections on Edmund Phelps’ Mass Flourishing
    Date: 2014-01-02
    By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN))
    Edmund Phelps, the 2006 Nobel Laureate in Economics, has written a thought-provoking and ambitious book: Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change (Princeton University Press, 2013). The book is laudable for its emphasis on innovation, for its discussion of what constitutes a good life, and Phelps’ realization that true life satisfaction cannot be achieved through a mindless quest for money and the goods it can buy. But the overly glossy characterization of the period before WW II as opposed to the post-1980 period, the niggardly evaluation of the European economies, and the lack of empirical indicators actually showing that the rate of innovation has dropped are significant weaknesses. These objections are especially regrettable given the importance of the book´s main message: Creative entrepreneurship is not merely the key to economic growth, but to life satisfaction as well.
    Keywords: Innovation; Entrepreneurship; Modernism; Postmodernism; Values
    JEL: L26 M14 P47 Z13
  9. De Walras à Vanek. Coopération et politique
    Date: 2013-01-02
    By: Alain Alcouffe (LIRHE – Laboratoire Interdisciplinaire de recherche sur les Ressources Humaines et l’Emploi – CNRS : UMR5066 – Université des Sciences Sociales – Toulouse I)
    Marius Chevallier (GEOLAB – Laboratoire de Géographie physique et environnementale – CNRS : UMR6042 – Université Blaise Pascal – Clermont-Ferrand II – Université de Limoges – Institut Sciences de l’Homme et de la Société)

    J. Prades (Dynamiques Rurales – Université Toulouse le Mirail – Toulouse II – Institut National Polytechnique de Toulouse – INPT – ENSAT. Ecole Nationale Supérieure agronomique de Toulouse – ENFA. Ecole Nationale de Formation Agronomique)

    Alors que l’idée coopérative était très présente dans les débats politiques jusqu’au début du 20ème siècle, son étude a rapidement été écartée de la science économique, malgré l’intérêt que les pionniers lui ont consacré. Ce n’est qu’au terme d’un processus de dépolitisation (ou de séparation des dimensions économiques et politiques) que l’analyse des coopératives, tour à tour focalisée sur les coopératives de consommateurs, puis d’entreprises puis de travailleurs, est redevenue une thématique présente dans la science économique. La conscience de la dimension politique de l’idée coopérative continue de se renouveler, mais en marge de la science économique.
    Keywords: coopérative, histoire des idées, politique, histoire de la pensée économique

NEP-HPE 2013-12-20, 8 papers

NEP: New Economics Papers
History and Philosophy of Economics

Edited by: Erik Thomson
University of Manitoba
Issue date: 2013-12-20
Papers: 8

Note: Access to full contents may be restricted.
NEP is sponsored by the School of Economics and Finance of Victoria University of Wellington.
To subscribe/unsubscribe follow this link

In this issue we have:

  1. The theory of reflexivity: A non-stochastic randomness theory for business schools only? Ehnts, Dirk; Carrión Álvarez, Miguel
  2. Causality and interdependence in Pasinetti’s works and in the modern classical approach Bellino, Enrico; Nerozzi, Sebastiano
  3. An effective replicator equation for games with a continuous strategy set Ruijgrok, Matthijs; Ruijgrok, Theo
  4. Robust Multiplicity with a Grain of Naiveté Aviad Heifetz; Willemien Kets
  5. On the Structure of Cooperative and Competitive Solutions for a Generalized Assignment Game Pablo Arribillaga; Jordi Massó; Alejandro Neme
  6. Subjective Bayesian Beliefs : Constantinos Antoniou; : Glenn W. Harrison; : Morten I. Lau; : Daniel Read
  7. Revealed Preference and the Strength/Weight Hypothesis : Constantinos Antoniou; : Glenn W. Harrison; : Morten I. Lau; : Daniel Read
  8. Stable Partitions in Many Division Problems: The Proportional and the Sequential Dictator Solutions Gustavo Bergantiños; Jordi Massó; Inés Moreno de Barreda; Alejandro Neme


  1. The theory of reflexivity: A non-stochastic randomness theory for business schools only?
    Date: 2013
    By: Ehnts, Dirk
    Carrión Álvarez, Miguel
    The Alchemy of Finance, a book written by George Soros (1987) on the workings of financial markets, ‘has found a place in the reading lists of business schools as distinct from economics departments’, according to the author (2003, 4). His theory of reflexivity, which is at the center of the book, states that interdependence exists between the cognitive and manipulative functions of market participants. While Soros claims that imperfect knowledge rules on financial markets, academic orthodoxy assumes perfect knowledge and hence displays – in the absence of external shocks – financial markets as efficient. We review the work of Soros on reflexivity and follow up his claim that it can be used to attack the efficient market hypothesis. Both are discussed and then the ideas of Soros are compared to those of Post-Keynesian economics. We argue that Soros’ book is mainly ignored by neo-classical economists because they disagree with his axioms, and by heterodox economists because his ideas are not new. —
    Keywords: efficient market hypothesis,theory of reflexivity,George Soros
    JEL: B26 D8
  2. Causality and interdependence in Pasinetti’s works and in the modern classical approach
    Date: 2013-12-12
    By: Bellino, Enrico
    Nerozzi, Sebastiano
    The formal representation of economic theories normally takes the form of a model, that is, a system of equations which connect the endogenous variables with the values of the parameters which are taken as given. Sometimes, it is possible to identify one or more equations which are able to determine a subset of endogenous variables priorly and independently of the other equations and of the value taken by the remaining variables of the system. The first group of equations and variables are thus said to determine causally the remaining variables. In Pasinetti’s works this notion of causality has often been emphasized as a formal property having the burden to convey some deep economic meaning. In this work, we will go through those Pasinetti’s works where this notion of causality plays a central role, with the purpose to contextualize it within the econometric debate of the Sixties, to enucleate its economic meaning and to show its connections with other fields of the modern classical approach.
    Keywords: causality, interdependence, modern classical approach, Ricardo theory distribution, Keynes’ analysis, ‘given quantities’, surplus approach, structural dynamics, vertical integration
    JEL: B00 B24 B51 C50 E12
  3. An effective replicator equation for games with a continuous strategy set
    Date: 2013-12-13
    By: Ruijgrok, Matthijs
    Ruijgrok, Theo
    The replicator equation for a two person symmetric game, which has an interval of the real line as strategy space, is extended with a mutation term. Assuming that the distribution of the strategies has a continuous density, a partial differential equation for this density is derived. The equation is analysed for two examples. A connection is made with Adaptive Dynamics.
    Keywords: Evolutionary games; Replicator equation; Mutation; Dynamic stability; Partial differential equations
    JEL: C72 C73
  4. Robust Multiplicity with a Grain of Naiveté
    Date: 2013-12-11
    By: Aviad Heifetz
    Willemien Kets
    In an important paper, Weinstein and Yildiz (2007) show that if players have an innite depth of reasoning and this is commonly believed, types generically have a unique rationalizable action in games that satisfy a richness condition. We show that this result does not extend to environments where players may have a finite depth of reasoning, or think it is possible that the other player has a finite depth of reasoning, or think that the other player may think that is possible, and so on, even if this so-called "grain of naivete" is arbitrarily small. More precisely, we show that even if there is almost common belief in the event that players have an infinite depth of reasoning, there are types with multiple rationalizable actions, and the same is true for "nearby" types. Our results demonstrate that both uniqueness and multiplicity are robust phenomena when we relax the assumption that it is common belief that players have an infinite depth, if only slightly.
    Keywords: Bounded rationality, finite depth of reasoning, global games, higher-order beliefs, generic uniqueness, robust multiplicity JEL Classification: C700, C720, D800, D830
  5. On the Structure of Cooperative and Competitive Solutions for a Generalized Assignment Game
    Date: 2013-10
    By: Pablo Arribillaga
    Jordi Massó
    Alejandro Neme
    We study cooperative and competitive solutions for a many- to-many generalization of Shapley and Shubik (1972)�s assignment game. We consider the Core, three other notions of group stability and two alternative definitions of competitive equilibrium. We show that (i) each group stable set is closely related with the Core of certain games defined using a proper notion of blocking and (ii) each group stable set contains the set of payoff vectors associated to the two definitions of competitive equilibrium. We also show that all six solutions maintain a strictly nested structure. Moreover, each solution can be identified with a set of matrices of (discriminated) prices which indicate how gains from trade are distributed among buyers and sellers. In all cases such matrices arise as solutions of a system of linear inequalities. Hence, all six solutions have the same properties from a structural and computational point of view.
    Keywords: assignment game, competitive equilibrium, core, group stability
    JEL: C78 D78
  6. Subjective Bayesian Beliefs
    Date: 2013
    By: : Constantinos Antoniou
    : Glenn W. Harrison
    : Morten I. Lau
    : Daniel Read
  7. Revealed Preference and the Strength/Weight Hypothesis
    Date: 2013
    By: : Constantinos Antoniou
    : Glenn W. Harrison
    : Morten I. Lau
    : Daniel Read
  8. Stable Partitions in Many Division Problems: The Proportional and the Sequential Dictator Solutions
    Date: 2013-10
    By: Gustavo Bergantiños
    Jordi Massó
    Inés Moreno de Barreda
    Alejandro Neme
    We study how to partition a set of agents in a stable way when each coalition in the partition has to share a unit of a perfectly divisible good, and each agent has symmetric single-peaked preferences on the unit interval of his potential shares. A rule on the set of preference profiles consists of a partition function and a solution. Given a preference profile, a partition is selected and as many units of the good as the number of coalitions in the partition are allocated, where each unit is shared among all agents belonging to the same coalition according to the solution. A rule is stable at a preference profile if no agent strictly prefers to leave his coalition to join another coalition and all members of the receiving coalition want to admit him. We show that the proportional solution and all sequential dictator solutions admit stable partition functions. We also show that stability is a strong requirement that becomes easily incompatible with other desirable properties like efficiency, strategy-proofness, anonymity, and non-envyness.
    Keywords: division problem, symmetric single-peaked preferences, stable partition
    JEL: D71

nep-hpe 2013-12-29, 31 papers

NEP: New Economics Papers
History and Philosophy of Economics

Edited by: Erik Thomson
University of Manitoba
Issue date: 2013-12-29
Papers: 31

Note: Access to full contents may be restricted.
NEP is sponsored by the School of Economics and Finance of Victoria University of Wellington.
To subscribe/unsubscribe follow this link

In this issue we have:

  1. O.M.W. Sprague (the Man who “Wrote the Book” on Financial Crises) and the Founding of the Federal Reserve Hugh Rockoff
  2. Did Keynes in the General Theory significantly misrepresent J S Mill? Grieve, Roy H
  3. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (2): Chapter 2, “The Postulates of the Classical Economics” Brian S. Ferguson
  4. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (3): Chapter 3, “The Principle of Effective Demand” Brian S. Ferguson
  5. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (4): Chapter 4, "The Choice of Units"; Chapter 5, "Expectations as Determining Output and Employment" Brian S. Ferguson
  6. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (5): Chapter 6, The Definition of Income, Saving and Investment; Appendix to Chapter 6, Appendix on User Cost; Chapter 7, The Meaning of Saving and Investment Further Considered Brian S. Ferguson
  7. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (6): Chapters 8, 9 and 10: Keynes’ Theory of Consumer Behaviour Brian S. Ferguson
  8. Intentional Apple-choice Behaviors: When Amartya Sen Meets John Searle Dorian Jullien
  9. An issue with own-rates: Keynes borrows from Sraffa , Sraffa criticises Keynes, and present-day commentators get hold of the wrong end of the stick Grieve, Roy H
  10. All but one: How pioneers of linear economics overlooked Perron-Frobenius mathematics PARYS, Wilfried
  11. Evidential equilibria: Heuristics and biases in static games Sanjit Dhami; Ali al-Nowaihi
  12. Le Paradoxe d’Allais: Comment lui rendre sa signification perdue? (Allais’s Paradox: How to Give It Back Its Lost Meaning?) Mongin, Philippe
  13. The return of “patrimonial capitalism”: review of Thomas Piketty’s Capital in the 21st century Milanovic, Branko
  14. Inside the capitalist firm: An evolutionary theory of the principal agent-relation Malcolm Dunn
  15. Subgame perfect equilibria in majoritarian bargaining Herings P.J.J.; Meshalkin A.V.; Predtetchinski A.
  16. Nearer to Sraffa than Marx: Adam Smith on Productive and Unproductive Labour Rob H., Grieve
  17. The Future of Evolutionary Economics: Why Modalities Matter Ulrich Witt
  18. Evolutionary Economics Kurt Dopfer
  19. Institutions and prosperity Colin, Jennings
  20. Learning from the makers of history: Bolshevism, Bolivarianism, and the Legacy of Hugo Chavez Freeman, Alan
  21. Rational Expectations Dynamics: A Methodological Critique Donald A. R., George; Les, Oxley
  22. Friedman and Divisia Monetary Measures William Barnett
  23. No-regret Dynamics and Fictitious Play Yannick Viossat; Andriy Zapechelnyuk
  24. No Good Deals – No Bad Models Nina, Boyarchenko; Mario, Cerrato; John, Crosby; Stewart, Hodges
  25. Second Thoughts on Free Riding Ulrik H. Nielsen; Jean-Robert Tyran; Erik Wengström
  26. Truthful Equilibria in Dynamic Bayesian Games Johannes Horner; Satoru Takahashi; Nicolas Vieille
  27. Development, progress and economic growth Bresser-Pereira, Luiz Carlos
  28. Growth and inequality in public good games Tsakas E.; Gaechter S.; Mengel F.; Vostroknutov A.
  29. Effi cient Formulas and Computational Efficiency for Glove Games Julia Belau
  30. Un essai de définition du concept de gouvernance Darine Bakkour
  31. Moral Hazard with Counterfeit Signals Clausen, Andrew


  1. O.M.W. Sprague (the Man who “Wrote the Book” on Financial Crises) and the Founding of the Federal Reserve
    Date: 2013-12
    By: Hugh Rockoff
    O.M.W. Sprague was America’s leading expert on financial crises when America was debating establishing the Federal Reserve. His History of Crises under the National Banking Act is one of the most enduring legacies of the National Monetary Commission; a still frequently cited classic. Since the Commission recommended a central bank, and its recommendation after some modifications became the Federal Reserve System, it might be assumed that Sprague was a strong supporter of establishing a central bank. But he was not. Initially, Sprague favored more limited reforms, a position that he did not abandon until the Federal Reserve became a fait accompli. Here I discuss the sources of Sprague’s opposition to a central bank and the relationship of that opposition to his understanding of the history and structure of the American banking system at the turn of the nineteenth century.
    JEL: B26 N1
  2. Did Keynes in the General Theory significantly misrepresent J S Mill?
    Date: 2013
    By: Grieve, Roy H
    It has been alleged that J M Keynes, quoting in the General Theory a passage from J S Mill’s Principles, misunderstood the passage in question and was therefore wrong to cite Mill as an upholder of the ‘classical’ proposition that ‘supply creates its own demand’. We believe that, although Keynes was admittedly in error with respect to, so-to-say, the ‘letter’ of Mill’s exposition, he did not mislead readers as to the ‘substance’ of Mill’s conception. The purpose of this paper is to demonstrate that J S Mill did indeed stand for a ‘classical’ position, vulnerable to Keynes’s critique as developed in the General Theory. [This is a revised version of an earlier working paper: 'Keynes, Mill and Say's Law', Strathclyde Papers in Economics, 2000/11]
    Keywords: Keynes and the ‘classics’, John Stuart Mill, Say’s Law,
  3. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (2): Chapter 2, “The Postulates of the Classical Economics”
    Date: 2013
    By: Brian S. Ferguson (Department of Economics and Finance, University of Guelph)
    Chapter 2 is one of the most important chapters in the General Theory. Not only does it set out Keynes’ disagreements with key elements of the classical model, it lays out his own model of the working of the labour market, which underlies the analysis in the remainder of the General Theory. The issue of how labour’s response to a change in its real wage differs depending on whether the change is driven by a change in the nominal wage or in the price of consumer goods plays a key part in the way Keynes’ theoretical model is developed here. This chapter introduces Keynes’ concept of involuntary unemployment and sets out his argument about the causal relation between the real wage and the level of unemployment, and about the consequent cyclicality of the real wage. Chapter 2 also includes Keynes’ discussion of Say’s Law.
    Keywords: Keynes, General Theory, Keynesian Economics, Classical Economics, Involuntary Unemployment, Real Wages, Labour Market Adjustment, Say’s Law.
    JEL: B10 B12 B13 B22 B31 E12 N12 N14
  4. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (3): Chapter 3, “The Principle of Effective Demand”
    Date: 2013
    By: Brian S. Ferguson (Department of Economics and Finance, University of Guelph)
    In Chapter 3 of the General Theory, Keynes sketches out what he calls the essence of the General Theory of Employment. He introduces the Keynesian expenditure-based model, his aggregate demand function and also his aggregate supply function, a concept which spawned much debate among Post-Keynesian economists but which was, for a long time, virtually ignored in mainstream macroeconomics. He sets out the Savings = Investment version of Say’s Law and outlines how an economy can settle into an equilibrium at less than full employment.
    Keywords: Keynes, General Theory, Keynesian Economics, Classical Economics, Aggregate Demand, Aggregate Supply, Unemployment Equilibrium, Say’s Law.
    JEL: B10 B12 B13 B22 B31 E12 N12 N14
  5. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (4): Chapter 4, "The Choice of Units"; Chapter 5, "Expectations as Determining Output and Employment"
    Date: 2013
    By: Brian S. Ferguson (Department of Economics and Finance, University of Guelph)
    In Chapter 4 of the General Theory, Keynes discusses the units of measurement he will be using in the remainder of the book, in particular his reason for measuring in nominal rather than real terms, objection to aggregate measures of real output and physical capital stock, and his concept of wage units, which is a source of difficulty in following bits of the later exposition. Chapter 5 introduces expectations and discusses the role of short run expectations in determining the behavior of firms and of economic aggregates.
    Keywords: Keynes, General Theory, Keynesian Economics, Classical Economics, Wage Units, Labour Units, Short Run Expectations, Long Run Expectations, Economic Dynamics
    JEL: B10 B12 B13 B22 B31 E12 N12 N14
  6. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (5): Chapter 6, The Definition of Income, Saving and Investment; Appendix to Chapter 6, Appendix on User Cost; Chapter 7, The Meaning of Saving and Investment Further Considered
    Date: 2013
    By: Brian S. Ferguson (Department of Economics and Finance, University of Guelph)
    Chapter Six and its Appendix deal in some detail with the way Keynes is defining income, savings and investment in the General Theory while the appendix to Chapter 6 goes into detail on user cost. His concept of user cost at one point sparked a certain amount of controversy among Keynesians but has since virtually been forgotten. It is of interest to us because user cost is the place where Keynes sees firms taking account of the future consequences of their current production decisions. The General Theory is a theory of the short run, but firms’ cost curves, which are key to many short run decisions, contain a forward looking element. Chapter 7 returns to the concepts of saving and investment, relates Keynes’ definitions to those used by others (including his own from the Treatise) and relates aggregate investment, which refers to additions to physical capital stock, to the way the term is often used at the micro level, in the sense of investment in financial assets.
    Keywords: Keynes, General Theory, Keynesian Economics, Savings, Investment, User Cost, Prime Costs, Keynes’ Abominable Footnote, Keynes’ Slip of the Pen.
    JEL: B10 B12 B13 B22 B31 E12 N12 N14
  7. Lectures on John Maynard Keynes’ General Theory of Employment, Interest and Money (6): Chapters 8, 9 and 10: Keynes’ Theory of Consumer Behaviour
    Date: 2013
    By: Brian S. Ferguson (Department of Economics and Finance, University of Guelph)
    Chapters 8, 9 and 10 set out Keynes’ theory of consumer behavior. Chapter 8 is entitled The Propensity to Consume: I. The Objective Factors, Chapter 9 is The Propensity to Consume: II. The Subjective Factors, and Chapter 10 is The Marginal Propensity to Consume and the Multiplier. Contrary to the widely held belief, Keynes saw the consumer as an intertemporally optimizing agent, in a manner which is quite consistent with Frank Ramsey’s model of intertemporal saving behavior and with modern theories of the behavior of the optimizing consumer. While he did conclude that in the short run income would be the dominant factor underlying consumer behavior, this was an empirical judgement, not simply an assumption about fundamental psychological propensities. Chapter 10 formally introduces the marginal propensity to consume and the multiplier.
    Keywords: Keynes, General Theory, Keynesian Economics, Classical Economics, Propensity to Consume, Time Preference, Interest Rate, Bequest Motive, Multiplier, Burying bottles of Banknotes.
    JEL: B10 B12 B13 B22 B31 E12 N12 N14
  8. Intentional Apple-choice Behaviors: When Amartya Sen Meets John Searle
    Date: 2013-12
    By: Dorian Jullien (University of Nice Sophia Antipolis)
    This paper suggests that Amartya Sen’s conception of rationality could benefit from insights borrowed to John Searle’s philosophy of mind. More precisely, I argue that the work of Searle on intentionality provides a relevant conceptual apparatus to strengthen Sen’s conceptualization of context-dependent preferences in a way that suggests further analytical contributions to the latter’s line of research. The arguments developed in the paper are relevant for three interrelated issues on economic rationality that are currently discussed in economic methodology: (1) methodological dualism and intentionalitic explanations in economics, (2) the relationships between economics and philosophy, and (3) the recent rise of behavioral economics within the mainstream of economic theory.
    Keywords: rationality, intentionality, preferences, context-dependency, Amartya Sen, John Searle
    JEL: B00 B40 B41 B49
  9. An issue with own-rates: Keynes borrows from Sraffa , Sraffa criticises Keynes, and present-day commentators get hold of the wrong end of the stick
    Date: 2013
    By: Grieve, Roy H
    Scholars who in recent years have studied the Sraffa papers held in the Wren Library of Trinity College, Cambridge, have concluded from Sraffa’s critical (but unpublished) observations on Chapter 17 of Keynes’s General Theory that he rejected Keynes’s central proposition that the rate of interest on money may come to ‘rule the roost’, thus dragging the economy into recession. While Sraffa does indeed express dissatisfaction with Chapter 17, the commentators have, we believe, misunderstood his concern: we suggest that he was unhappy with the ‘own-rates’ terminology employed by Keynes rather than with the substance of the theory developed in Chapter 17.
    Keywords: Chapter 17 of Keynes’s General Theory, commodity-rates, own-rates of interest,
  10. All but one: How pioneers of linear economics overlooked Perron-Frobenius mathematics
    Date: 2013-12
    By: PARYS, Wilfried
    In the period 1907-1912 the German ‘pure mathematicians’ Oskar Perron and Georg Frobenius developed the fundamental results of the theory of nonnegative matrices. Today Perron-Frobenius mathematics enjoys wide applications in many fields, for example in economics, probability theory, demography and even in Google’s ranking algorithm. In linear economic models of the Leontief-Sraffa type it is often the crucial tool to solve many mathematical economic problems. My paper concentrates on the history of Perron-Frobenius in linear economics, and some related stories. In the 1910s and 1920s, several pioneering publications in linear economics could have benefited from applying Perron-Frobenius results, but failed to do so, even the economic publications authored by the mathematicians Georg Charasoff, Hubert Bray and Robert Remak. Either they didn’t know Perron-Frobenius, or they didn’t realize its usefulness. The only exception was the French Jesuit mathematician Maurice Potron, who used Perron-Frobenius mathematics in the core of his economic model, in many of his writings, as early as 1911. He constructed a sort of disaggregated open input-output system, formulated duality theorems between his quantity system and his price system, and anticipated the Hawkins-Simon conditions. Potron’s economic or mathematical contemporaries didn’t recognize his originality. A general treatment of Charasoff’s economic system needs Perron-Frobenius mathematics, especially Perron’s Limit Lemma. Although some of Charasoff’s mathematical interests (irreducibility, continued fractions) were close to those of Perron or Frobenius, the theory of nonnegative matrices is never explicitly used in Charasoff’s work. It is doubtful whether Charasoff knew the relevant matrix theorems. Probably he just assumed that the properties of his numerical examples with three commodities also hold in the general case with n commodities. Frobenius had been Remak’s doctoral supervisor in 1911. After a forgotten non-mathematical paper in 1918, on the repayment of the national debt, Remak presented his mathematical system of ‘superposed prices’ in 1929, twelve years after Frobenius’ death. With suitable units of measurement, Remak’s system can be handled by Perron-Frobenius tools. However, Remak failed to normalize his units, and provided lengthy proofs of his own. Moreover, he spent most of his mathematical efforts on freak systems in which the most important commodities have zero prices. A few years earlier, in 1922, Bray also had overlooked Perron-Frobenius in a mathematically similar model that studied Cournot’s equations of currency exchange. Contrary to Dorfman’s well-known article on Leontief’s Nobel Prize in 1973, I provide archival evidence that Leontief knew Remak’s results already in the early 1930s, before he submitted a paper containing ideas of input-output theory to Keynes for the Economic Journal in 1933. Keynes quickly rejected Leontief’s paper; a few months later Leontief submitted it to Frisch for Econometrica. Frisch formulated a lot of critical remarks on Leontief’s first and revised version in 1933-34. In the light of this criticism, it is highly probable that Leontief simplified and linearized his mathematics, and a few years later he finally started publishing his Nobel Prize winning empirical and theoretical results in American journals. Just like Leontief, Sraffa started related research in the late 1920s. He didn’t discuss his mathematical problems with competent economic colleagues in Cambridge, nor with the specialists of the Econometric Society, but preferred mathematical help from three non-economists: Ramsey, Watson and especially Besicovitch. I suggest that Besicovitch in his early mathematical research in Russia ‘came close’ to Perron-Frobenius results, but it is well-known that he didn’t know Perron-Frobenius, and tried to invent his own proofs for Sraffa in the 1940s. In the first half of the twentieth century, abstract algebra started to flourish and became a more prestigious and widely researched subject than the ‘old-fashioned’ Perron-Frobenius matrices. In this context, it is less surprising that for many decades even the mathematicians (except Potron) overlooked the usefulness of Perron-Frobenius in linear economics. Results, connections or applications that seem evident after the fact, were not obvious to the original pioneers.
    Keywords: Perron-Frobenius, Charasoff, Potron, Bray, Remak, Leontief, Sraffa, Nonnegative matrices, Input-output analysis
  11. Evidential equilibria: Heuristics and biases in static games
    Date: 2013-11
    By: Sanjit Dhami
    Ali al-Nowaihi
    Standard equilibrium concepts in game theory find it difficult to explain the empirical evidence in a large number of static games such as prisoners’ dilemma, voting, public goods, oligopoly, etc. Under uncertainty about what others will do in one-shot games of complete and incomplete information, evidence suggests that people often use evidential reasoning (ER), i.e., they assign diagnostic significance to their own actions in forming beliefs about the actions of other like- minded players. This is best viewed as a heuristic or bias relative to the standard approach. We provide a formal theoretical framework that incorporates ER into static games by proposing evidential games and the relevant solution concept- evidential equilibrium (EE). We derive the relation between a Nash equilibrium and an EE. We also apply EE to several common games including the prisoners’ dilemma and oligopoly games.
    Keywords: Evidential reasoning; causal reasoning; evidential games; social projec- tion functions; ingroups and outgroups; evidential equilibria and consistent eviden- tial equilibria; Nash equilibria; the prisoners.dilemma and oligopoly games; common knowledge and epistemic foundations.
  12. Le Paradoxe d’Allais: Comment lui rendre sa signification perdue? (Allais’s Paradox: How to Give It Back Its Lost Meaning?)
    Date: 2013-06-30
    By: Mongin, Philippe
    De tous les problèmes conçus par la théorie de la décision, le paradoxe d’Allais est peut-être celui qui aura suscité l’intérêt le plus persistant. La théorie y a consacré assez de travaux techniques remarquables pour qu’il soit désormais possible à l’histoire et à la philosophie des sciences de l’examiner réflexivement. Dans sa partie historique, l’article restitue le contexte d’apparition du paradoxe – le colloque de Paris, en 1952, auquel assistaient les principaux théoriciens de la décision du moment. L’axiomatique de von Neumann et Morgenstern en 1947 leur avait donné des raisons nouvelles d’approuver l’hypothèse de l’utilité attendue, et le contre-exemple d’Allais visait précisément à ébranler leur conviction. Les questions de la controverse étaient de type normatif, mais elles se perdirent quand le "paradoxe d’Allais" gagna tardivement la célébrité dans des travaux des années 1980 qui le traitaient comme une simple réfutation empirique. Ils en firent l’enjeu de "théories de l’utilité non-espérée" qu’ils développaient de même sous le seul angle empirique. Dans sa partie philosophique, l’article cherche à évaluer ce déplacement d’interprétation. D’un certain côté, les théoriciens de la décision firent bien de libérer leur travail expérimental des complications du normatif, car ils parvinrent ainsi à des résultats éclairants : l’hypothèse de l’utilité espérée était empiriquement réfutée, la responsabilité principale en revenait à l’axiome d’indépendance de von Neumann-Morgenstern, et l’étape suivante était de transformer adéquatement cet axiome. D’un autre côté, ils eurent tort de négliger un trait fondamental de leur domaine : les comportements observés ne sont informatifs que si les agents sont prêts à les assumer de manière réfléchie, c’est-à-dire à leur prêter une certaine valeur normative. D’après la reconstruction proposée ici, Allais ne voulait faire porter les expériences de choix que sur des sujets rationnels, ou bien sélectionnés au départ, ou bien révélés comme tels par l’expérience. L’article développe ces intuitions en revenant aux travaux des années 1970, aujourd’hui très peu connus, qui, sous l’influence d’Allais, proposèrent des traductions expérimentales de la rationalité, et il invite finalement la théorie de la décision à diversifier ses méthodes en s’inspirant de ces tentatives originales. Few problems in decision theory have raised more persisting interest than the Allais paradox. It appears that sufficiently many brilliant works have addressed it from within decision theory proper for history and philosophy of science now to enter stage. In its historical side, the paper recounts the paradox as it arose, i.e., in 1952, at a Paris conference attended by the main decision theorists of the time. They had drawn renewed confidence in expected utility theory (EUT) from the way von Neumann and Morgenstern had axiomatized it in 1947, and Allais devised his puzzle precisely to shaken their confidence. The issues between the two camps were normative, but they became lost in the developments of the 1980s that belatedly brought fame to the "Allais paradox". These works restricted the paradox to be a straightforward empirical refutation, turning it into a stake of also exclusively empirically oriented non-EU theories. In its philosophical vein, the paper tries to evaluate this shift of interpretation. To an extent, decision theorists were right because their experimental work was thus freed from a major complication and amenable to illuminating results: EUT was empirically refuted, the independence axiom of von Neumann and Morgentern was the main culprit, and the next theoretical stage was to modify this axiom appropriately. However, they were also wrong in not addressing an essential feature of their field, i.e., that observed behaviour is informative only if agents are prepared to endorse it reflectingly, i.e., to endow it with some normative value. As reconstructed here, Allais meant to reserve choice experiments to rational subjects, who were either selected at the outset, or identified as such by the experimental results. The paper tries to flesh out Allais’s intuitions by turning to by now little known works of the 1970s, which under his influence provided experimental renderings of rationality, and it eventually suggests that decision theory might diversify its methods by taking inspiration from these original attempts.
    Keywords: Allais Paradox; expected utility theory; von Neumann-Morgenstern; positive vs normative; experimental economics of decision; rationality
    JEL: B21 B31 B41 C91 D81
  13. The return of “patrimonial capitalism”: review of Thomas Piketty’s Capital in the 21st century
    Date: 2013-10
    By: Milanovic, Branko
    Thomas Piketty’s "Capital in the 21st century" may be one of the most important recent economics books. It jointly treats theory of growth, functional distribution of income, and interpersonal income inequality. It envisages a future of relatively slow growth with the rising share of capital incomes, and widening income inequality. This tendency could be checked only by worldwide taxation of capital.
    Keywords: Income distribution, economic growth, taxation
    JEL: D31 D33 E2 E25
  14. Inside the capitalist firm: An evolutionary theory of the principal agent-relation
    Date: 2013-12
    By: Malcolm Dunn
    This book deals with the inner life of the capitalist firm. There we find numerous conflicts, the most important of which concerns the individual employment relationship which is understood as a principal-agent problem between the manager, the principal, who issues orders that are to be followed by the employee, the agent. Whereas economic theory traditionally analyses this relationship from a (normative) perspective of the firm in order to support the manager in finding ways to influence the behavior of the employees, such that the latter – ideally – act on behalf of their superior, this book takes a neutral stance. It focusses on explaining individual behavioral patterns and the resulting interactions between the actors in the firm by taking sociological, institutional, and above all, psychological research into consideration. In doing so, insights are gained which challenge many assertions economists take for granted.
    Keywords: Principal Agent Relation, Firm Behaviour, Evolutionary Economics, Transaction Costs, Conflict Management
    JEL: D21 D23 L2
  15. Subgame perfect equilibria in majoritarian bargaining
    Date: 2013
    By: Herings P.J.J.
    Meshalkin A.V.
    Predtetchinski A. (GSBE)
    We study the division of a surplus under majoritarian bargaining in the three-person case. In a stationary equilibrium as derived by Baron and Ferejohn 1989, the proposer offers one third times the discount factor of the surplus to a second player and allocates no payoff to the third player, a proposal which is accepted without delay. Laboratory experiments show various deviations from this equilibrium, where different offers are typically made and delay may occur before acceptance. We address the issue to what extent these findings are compatible with subgame perfect equilibrium and characterize the set of subgame perfect equilibrium payoffs for any value of the discount factor. We show that for any proposal in the interior of the space of possible agreements there exists a discount factor such that the proposal is made and accepted. We characterize the values of the discount factor for which equilibria with one-period delay exist. We show that any amount of equilibrium delay is possible and we construct subgame perfect equilibria such that arbitrary long delay occurs with probability one.
    Keywords: Noncooperative Games; Bargaining Theory; Matching Theory;
    JEL: C72 C78
  16. Nearer to Sraffa than Marx: Adam Smith on Productive and Unproductive Labour
    Date: 2013
    By: Rob H., Grieve
    We investigate Adam Smith’s analysis of the properties of what he called “productive” – as against “unproductive” – labour, a concept which commentators have frequently found problematic. Puzzles have been noted and inconsistency alleged. A question arises – did Smith confuse two different concepts of productive labour? We believe that, despite the apparent problems, a coherent reading of Smith’s account of productive and unproductive labour is in fact possible: if “productive labour” is understood to refer comprehensively to labour which not only maintains but, through producing a net surplus, adds to the community’s stock of wealth – as regards either the financial or the real resources which make possible economic growth – the difficulties with Smith’s treatment largely disappear.
    Keywords: Productive/Unproductive Labour, Basic/Non-basic Goods, Surplus Production,
  17. The Future of Evolutionary Economics: Why Modalities Matter
    Date: 2013-12-18
    By: Ulrich Witt
    The label "evolutionary" is currently used in economics to describe a variety of theories and topics. Far from inspiring the paradigmatic shift envisioned by some of the early proponents of evolutionary economics, the patchwork of theories and topics in this field demonstrates the need of an overarching interpretative frame. In other disciplines, the adoption of the Darwinian theory of evolution extended by hypotheses on cultural evolution has led to such a paradigm shift. This paper explores what can be accomplished by adopting that theory as an interpretative frame also for economics. Attention is directed in particular to the modalities of causal explanations that are germane to such a frame. The relevance of these modalities to the various thematic and theoretical specializations carrying the label "evolutionary" in economics is established to demonstrate the suitability as a common frame. Moreover, these modalities suggest a criterion on the basis of which evolutionary research can be distinguished from non-evolutionary research in economics. The case of institutional economics is used to outline some implications in an exemplary fashion.
  18. Evolutionary Economics
    Date: 2013-12-18
    By: Kurt Dopfer
  19. Institutions and prosperity
    Date: 2013
    By: Colin, Jennings
    This article reviews ‘Pillars of Prosperity’ by Timothy Besley and Torsten Persson and ‘Why Nations Fail’ by Daron Acemoglu and James Robinson. Both books are focussed on the role of institutions in determining the wealth of nations and the review compares and contrasts the different approaches contained in the two texts. The review also attempts to locate the texts within the broader literature in development and political economics and to link them to other recent work in these areas.
    Keywords: Institutions, Prosperity,
  20. Learning from the makers of history: Bolshevism, Bolivarianism, and the Legacy of Hugo Chavez
    Date: 2013-05-06
    By: Freeman, Alan
    This is a pre-publication version of an article published by the journal ‘America Latina XXI’. It was originally produced as a tribute to Hugo Chavez and a critical reflection on his reception outside Venezuela, on the occasion of his death.
    Keywords: Chavez, Venezuela, Bolivarianism, Bolshevism
    JEL: B00 B50 O10
  21. Rational Expectations Dynamics: A Methodological Critique
    Date: 2013
    By: Donald A. R., George
    Les, Oxley
    This paper analyses RE macromodels from the methodological perspective. It proposes a particular property, robustness, which should be considered a necessary feature of scienti cally valid models in economics, but which is absent from many RE macromodels. To restore this property many macroeconomists resort to detailed and implausible assumptions, which take their models a long way from simple Rational Expectations. The paper draws attention to the problems inherent in the technique of local linearisation and concludes by proposing the use of nonlinear models, analysed globally.
  22. Friedman and Divisia Monetary Measures
    Date: 2013-12
    By: William Barnett (Department of Economics, The University of Kansas; Center for Financial Stability, New York City; IC2 Institute, University of Texas at Austin)
    This paper explores the relationship between Milton Friedman’s work and the work on Divisia monetary aggregation, originated by William A. Barnett. The paradoxes associated with Milton Friedman’s work are largely resolved by replacing the official simple-sum monetary aggregates with monetary aggregates consistent with economic index number theory, such as Divisia monetary aggregates. Demand function stability becomes no more of a problem for money than for any other good or service. Money becomes relevant to monetary policy in all macroeconomic traditions, including New Keynesian economics, real business cycle theory, and monetarist economics. Research and data on Divisia monetary aggregates are available for over 40 countries throughout the world from the online library within the Center for Financial Stability’s (CFS) program, Advances in Monetary and Financial Measurement. This paper supports adopting the standards of monetary data competency advocated by the CFS and the International Monetary Fund (2008, pp. 183-184).
    Keywords: Divisia monetary aggregates, demand for money, monetarism, index number theory.
  23. No-regret Dynamics and Fictitious Play
    Date: 2013
    By: Yannick Viossat (CEREMADE – CEntre de REcherches en MAthématiques de la DEcision – CNRS : UMR7534 – Université Paris IX – Paris Dauphine)
    Andriy Zapechelnyuk (QMUL – School of Economics and Finance – Queen Mary, University of London)
    Potential based no-regret dynamics are shown to be related to fictitious play. Roughly, these are epsilon-best reply dynamics where epsilon is the maximal regret, which vanishes with time. This allows for alternative and sometimes much shorter proofs of known results on convergence of no-regret dynamics to the set of Nash equilibria.
    Keywords: Regret minimization; no-regret strategy; fictitious play; best reply dynamics; Nash equilibrium; Hannan set; curb set
  24. No Good Deals – No Bad Models
    Date: 2013
    By: Nina, Boyarchenko
    Mario, Cerrato
    John, Crosby
    Stewart, Hodges
    Faced with the problem of pricing complex contingent claims, an investor seeks to make his valuations robust to model uncertainty. We construct a notion of a model- uncertainty-induced utility function and show that model uncertainty increases the investor’s eff ective risk aversion. Using the model-uncertainty-induced utility function, we extend the \No Good Deals" methodology of Cochrane and Sa a-Requejo [2000] to compute lower and upper good deal bounds in the presence of model uncertainty. We illustrate the methodology using some numerical examples.
    Keywords: Asset pricing theory, Good deal bounds, Knightian uncertainty, Model uncertainty, Contingent claim pricing, model-uncertainty-induced utility function,
  25. Second Thoughts on Free Riding
    Date: 2013-09-04
    By: Ulrik H. Nielsen (Department of Economics, Copenhagen University)
    Jean-Robert Tyran (Centre for Economic Policy Research (CEPR), University of Vienna, Department of Economics, Copenhagen University)
    Erik Wengström (Department of Economics, Copenhagen University)
    We use the strategy method to classify subjects into cooperator types in a large-scale online Public Goods Game and find that free riders spend more time on making their decisions than conditional cooperators and other cooperator types. This result is robust to reversing the framing of the game and is not driven by free riders lacking cognitive ability, confusion, or natural swiftness in responding. Our results suggest that conditional cooperation serves as a norm and that free riders need time to resolve a moral dilemma.
    Keywords: Response Time, Free Riding, Public Goods, Experiment
    JEL: C70 C90 D03
  26. Truthful Equilibria in Dynamic Bayesian Games
    Date: 2013-12
    By: Johannes Horner (Cowles Foundation, Yale University)
    Satoru Takahashi (National University of Singapore)
    Nicolas Vieille (HEC Paris)
    This paper characterizes an equilibrium payoff subset for Markovian games with private information as discounting vanishes. Monitoring is imperfect, transitions may depend on actions, types be correlated and values interdependent. The focus is on equilibria in which players report truthfully. The characterization generalizes that for repeated games, reducing the analysis to static Bayesian games with transfers. With correlated types, results from mechanism design apply, yielding a folk theorem. With independent private values, the restriction to truthful equilibria is without loss, except for the punishment level; if players withhold their information during punishment-like phases, a "folk" theorem obtains also.
    Keywords: Bayesian games, Repeated games, Folk theorem
    JEL: C72 C73
  27. Development, progress and economic growth
    Date: 2013-12-09
    By: Bresser-Pereira, Luiz Carlos
    Progress was an idea of the 18th century; development, a project of the 20th century that continues into the 21st century. Progress was associated with the advance of reason, development with the fulfillment of the five political objectives that modern societies set for themselves: security, freedom, economic well-being, social justice and protection of the environment. Today we can view progress and development as equivalent. Both were products of the capitalist revolution, and of the economic development that began with it. Economic development or growth, in its turn, is the process of capital accumulation with the incorporation of technical progress that, mainly through productive sophistication and the increase of the value of labor, increases wages and improves standards of living. The five objectives that define development, as well as the three social instances existing in society change in an interdependent way.
  28. Growth and inequality in public good games
    Date: 2013
    By: Tsakas E.
    Gaechter S.
    Mengel F.
    Vostroknutov A. (GSBE)
    In a novel experimental design we study dynamic public good games in which wealth is allowed to accumulate. More precisely each agents income at the end of a period serves as her endowment in the following period. In this setting growth and inequality arise endogenously allowing us to address new questions regarding their interplay and effect on cooperation levels. We find that average cooperation levels in this setting are high between 20-60 of endowments and that amounts contributed do not decline over time. Introducing the possibility of punishment leads to lower group income, but less inequality within groups. In both treatments with and w/o punishment inequality and group income are positively correlated for poor groups with below median income, but negatively correlated for rich groups with above median income. There is very strong path dependence inequality in early periods is strongly negatively correlated with group income in later periods. These results give new insights into why people cooperate and should make us rethink previous results from the literature on repeated public good games regarding the decay of cooperation in the absence of punishment.
  29. Effi cient Formulas and Computational Efficiency for Glove Games
    Date: 2013-12
    By: Julia Belau
    A well known and simple game to model markets is the glove game where worth is produced by building matching pairs. For glove games, diff erent concepts, like the Shapley value, the restricted Shapley value or the Owen value, yield diff erent distributions of worth. Moreover, computational eff ort of these values is in general very high. This paper provides effi cient allocation formulas of the component restricted Shapley value and the Owen value for glove games in case of efficient coalitions.
    Keywords: Glove game; imbalanced market; imhapley value; owen value; effi ciency;computational complexity
    JEL: C71
  30. Un essai de définition du concept de gouvernance
    Date: 2013-12
    By: Darine Bakkour
    Ce papier a pour objet de préciser la terminologie du concept de gouvernance. Nous allons examiner les modes de gouvernance les plus connus, à savoir la gouvernance d’entreprise, la gouvernance publique, et la gouvernance territoriale. C’est ainsi, que nous évoquerons le concept de la Responsabilité Sociale de l’Entreprise (RSE), le courant du New Public Management (NPM) et le concept de gouvernementalité de Michel Foucault (1978). Nous considérons que la gouvernance s’applique à un « système » et nous proposons une définition du concept de gouvernance d’un système, comme suit : « La gouvernance d’un système désigne les mécanismes au moyen desquels les mandataire(s) et les mandants articulent leurs intérêts et aplanissent leurs différences afin de réaliser leurs objectifs. La gouvernance désigne, par ailleurs, les institutions, qui influent sur l’exercice des pouvoirs dans les entités concernés. Enfin, la gouvernance d’un système est décrite par l’interaction participative entre les acteurs concernés à tous les niveaux ». La gouvernance est un concept holistique qui s’applique à plusieurs niveaux, et pour plusieurs objectifs, dans un environnement marqué par des conflits d’intérêts, des situations d’incertitudes et d’asymétrie d’information.
  31. Moral Hazard with Counterfeit Signals
    Date: 2013
    By: Clausen, Andrew
    In many moral hazard problems, the principal evaluates the agent’s performance based on signals which the agent may suppress and replace with counterfeits. This form of fraud may affect the design of optimal contracts drastically, leading to complete market failure in extreme cases. I show that in optimal contracts, the principal deters all fraud, and does so by two complementary mechanisms. First, the principal punishes signals that are suspicious, i.e. appear counterfeit. Second, the principal is lenient on bad signals that the agent could suppress, but does not.

Convocatoria para propuestas de simposios CLADHE-IV

Toda la información en

Cordial saludo,
Juan Carlos García Sáenz
Asistente Logístico
Cuarto Congreso Latinoamericano de Historia Económica CLADHE IV
Facultad Ciencias Económicas y Administrativas,Universidad Jorge Tadeo Lozano
Carrera 4 No. 22-61 Bloque 16 Of. 201,Tel: (57 1) 2427030 ext 3663
Bogotá D.C. Colombia
Mas Información en, o
cladhe4 @

Conference: “New Perspectives in Environmental History,” New Haven, CT, Saturday, April 12, 2014

Yale Environmental History is pleased to announce its spring 2014 conference, “New Perspectives in Environmental History.” Please mark your calendars for Saturday, April 12, 2014, and come join us in New Haven for a lively day of talks and discussion.

Thank you for circulating this announcement to graduate students and faculty in your programs who might wish to attend.

“New Perspectives in Environmental History” will showcase current graduate student research in environmental history and encourage dialogue among graduate students and faculty. The conference will include three moderated panels featuring papers by graduate students from nine different universities, as well as a closing faculty panel.

You can find all the conference details (including free REGISTRATION) here:

The conference schedule is below. Papers will be available to registered attendees a few weeks before the conference. See you in April!

AEHE Newsletter Nº 81 – Enero 2014 – Noticias de la Asociación Española de Historia Económica

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Aehe, Newsletter: Universidad y, Ciencia en España.,Claves de un, fracaso y vías de solución
Universidad y Ciencia en España.
Claves de un fracaso y vías de solución

Aehe, Newsletter: El miedo ,en la historia
El miedo
en la historia

Aehe, Newsletter: El turismo ,en la España contemporánea
El turismo
en la España contemporánea

Aehe, Newsletter: History of Entrepreneurship: Innovation and ,Risk-Taking, 1200–2000
History of Entrepreneurship: Innovation
and Risk-Taking, 1200–2000

Aehe, Newsletter: Business History
Business History

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Accede a las últimas publicaciones web

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Enero 2014 – N.º 81 Aehe, Newsletter: Icono TwitterAehe, Newsletter: Icono Facebook
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obtener más información visite nuestra web:
Contacte con nosotros a través de nuestro e-mail:

Aehe, Newsletter: Francisco Comín obtiene el Premio Docentia ,(III ed. 2013) y el reconocimiento de la AEHE ,por su contribución a la mejora de la docencia ,por la edición de manuales de Historia Económica Francisco Comín obtiene el Premio Docentia
(III ed. 2013) y el reconocimiento de la AEHE
por su labor docente en los manuales de
Historia Económica. Ver +
XI Encuentro de Didáctica de la Historia Económica (DIDHE)
Santiago de Compostela, 26 y 27 de junio de 2014.
Nuevo plazo para la presentación de propuestas de comunicaciones y sesiones
y/o mesas hasta el 17 de enero de 2014. Ver +
XI Congreso internacional de la AEHE Aehe, Newsletter: XI Congreso internacional de la AEHE
Madrid, CUNEF, 4 y 5 de septiembre de 2014. Ya está abierto el plazo para participar en las sesiones de pósters y tesis doctorales en curso. Ir a la web

documentos de trabajo de la AEHE:

DT-AEHE Nº1311: Crisis agraria y desigualdad nutricional en extremadura: Una primera aproximación antropométrica a los efectos de la Guerra y la posguerra. Antonio M. Linares Luján y Francisco M. Parejo Moruno.

DT-AEHE Nº1310: Child and youth labour in the spanish mining sector:
. Miguel Á. Pérez de Perceval, Ángel Pascual Martínez Soto y
Andrés Sánchez Picón.

Call for papers. The business of fashion in the Nineteenth and Twentieth Centuries.
IInvestigaciones de Historia Económica-Economic History Research (IHE-EHR).
Invited editors: Giovanni Luigi Fontana y José Antonio Miranda. Ver +
18th annual congress of the European Business History Association."Comparative Business History: Contrasting Regions, Sectors, and Centuries"
Utrecht University, 21-23 august, 2014.
Deadline: January 15, 2014. Ver +
2014 Annual Cliometrics Conference
Clemson University (United States), 16-17 May 2014. Ver +
XVI Reunión de Economía Mundial
Universidad de Cádiz, 11-13 de junio de 2014. Ver +
Call for papers. Common people, common rules. Institutions and self-governance in historial perspective
Public University of Navarre (Pamplona-Iruñea, Spain).
October 30-31, 2014. Ver +
Simposio Empresa y Trabajo: Historia de una amistad documental
Madrid, 3-4 febrero 2014. Ver +
XI Foro Internacional sobre la evaluación de la calidad
de la investigación y de la educación superior
Bilbao, Universidad de Deusto, 8-11 julio 2014. Ver +
Congreso 2014 de la Sociedad Española de Estudios
de la Comunicación Iberoamericana (SEECI)
En línea (no presencial), 28-29 abril 2014. Ver +
Convocatorias Plan Estatal de Investigación y Ayudas infraestructuras (Ministerio de Economía y Competitividad) Ver +
Revistas: últimos números
Revista Investigaciones de Historia Económica - Asociación Española de Historia Económica Historia Agraria Asociación Española de Historia Económica Historia Económica Asociación Española de Historia Económica Historia Industrial Asociación Española de Historia Económica
A los efectos previstos en la Ley Orgánica 15/1999, de Protección de Datos de Carácter Personal, y en cumplimiento del art. 5 del citado cuerpo legal, le informamos que los datos personales que nos facilite serán incluidos en un fichero de contactos, titularidad de Asociación Española de Historia Económica, con la finalidad de informarle de las acciones de la organización que consideremos de su interés. Podrá ejercer los derechos de acceso, rectificación y cancelación en el correo electrónico de la asociación.

José M. Martínez Carrión
Francisco J. Medina Albaladejo

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John Carter Brown Library and the Center for the Study of Slavery and Justice Joint Fellow

John Carter Brown Library and the Center for the Study of Slavery and Justice Joint Fellow

The John Carter Brown Library (JCB) and The Center for the Study of Slavery and Justice (CSSJ) at Brown University invite applications for a joint JCB/CSSJ residential research fellowship for the academic year 2014-2015. The fellowship is open to those who have recently completed their PhDs*, assistant professors, as well as independent scholars who are working on any topic to do with the history of slavery and abolition that might benefit from extended access to the collections of the JCB, in particular, and from other collections on Brown’s campus, including that of the John Hay Library.

The JCB/CSSJ Fellow would be expected to be a regular participant in the activities sponsored by both host organizations, and would be eligible for housing in the JCB’s fellows’ residence, Fiering House, located just four blocks from the Library and five blocks from the CSSJ. The JCB/CSSJ Fellow will have the opportunity to teach a course in a department at Brown that would align with the fellow’s research interests, using materials from the JCB collections.

The stipend for the fellowship is $45,000, with residency required from Sept. 1, 2014 through May 31, 2015.

Deadline for submission of all materials is February 15, 2014.

For more about the John Carter Brown Library and its collections, please visit

For more about the Center for the Study of Slavery and Justice, please visit

Please direct any questions to Shana Weinberg, Center Manager at: shana_weinberg @

Brown University is an EEO/AA employer. Minorities and women are encouraged to apply.

*PhD candidates are welcome to apply for the JCB/CSSJ Fellowship if all degree requirements, including the successful defense of their dissertation, have been met by May 30, 2014.

Application Instructions

Please apply directly through the Interfolio system at:

The application requires: 1. A single PDF file with a cover page that has the applicant’s name, affiliation, contact information, title of the project, and a 100-word abstract; a statement of project (up to 1000 words), and a brief narrative proposal (up to 500 words) for the required course that might be taught from JCB collections; 2. A writing sample; 3. CV; and 4. Three (3) letters of references from scholars acquainted with the applicant’s JCB/CSSJ Fellowship research proposal, speak specifically to its merits, and to any teaching that the referee has observed.

Ruth Clark | Outreach and Program Coordinator
Center for the Study of Slavery & Justice
Brown University
Alumnae Hall
194 Meeting Street
Box 1895
Providence, RI 02912
Tel: 401.863.5099
ruth_clark @


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