explaining modern economics as a microcosm of society the persistence of mainstream economists with methods of mathematical deductive modelling that most agree do not perform well is something of a puzzle here i show this phenomenon to be a special case of gendered tendencies in play in society at large and i offer a psychological explanation copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

occupational choice and the process of development this paper models economic development as a process of institutional transformation by focusing on the interplay between agents occupational decisions and the distribution of wealth because of capital market imperfections poor agents choose working for a wage over self employment and wealthy agents become entrepreneurs who monitor workers only with sufficient inequality however will there be employment contracts otherwise there is either subsistence or self employment thus in static equilibrium the occupational structure depends on distribution since the latter is itself endogenous we demonstrate the robustness of this result by extending the model dynamically and studying examples in which initial wealth distributions have long run effects in one case the economy develops either widespread cottage industry self employment or factory production employment contracts depending on the initial distribution in the other example it develops into prosperity or stagnation

entrepreneurial human capital and the long run survival of firms in india abstract this paper analyses the characteristics of entrepreneurs that contribute to firms survival in less developed countries ldcs the study which relies on data collected in a 1971 survey of entrepreneurs in south india and a follow up survey of surviving firms in 1993 finds that entrepreneurial human capital greatly influences firm survival the results indicate that firms founded by older entrepreneurs in higher castes are most likely to survive but that increased education of the founding entrepreneur reduces survival these results provide evidence that opportunities of entrepreneurs outside the firm ignored in most theories are important in firm survival

post keynesianism meets feminist economics this article explores the relationships between post keynesian economics and feminist economics it distinguishes three key concepts in each tradition that recommend serious attention in the other tradition gender the household and unpaid work and caring as key concepts in feminist economics uncertainty market power and endogenous dynamics as core concepts in post keynesian economics this article will show with reference to the literature in which such cross fertilisation has been explored already how both traditions can be enriched from a stronger mutual engagement

consumer response to commodity specific and broad based promotion programs for fruits and vegetables generic promotion activities have traditionally been used for individual agricultural commodities yet there is renewed interest in implementing a mandatory broad based promotion program for all fruits and vegetables here we use data from an experiment that introduce subjects to various promotional efforts for fruits and vegetables to estimate the shift and rotational effects of advertising econometric results indicate that commodity specific promotional efforts may not be effective at increasing demand for fruits and vegetables after controlling for various demographic differences among treatments our results show that consumers valuation of fruits and vegetables was highest among subjects exposed to broad based advertisements copyright 2011 oxford university press

is probability theory relevant for uncertainty a post keynesian perspective stable url http links jstor org sici sici 0895 3309 28199124 295 3a1 3c129 3aiptrfu 3e2 0 co 3b2 gthe journal of economic perspectives is currently published by american economic association your use of the jstor archive indicates your acceptance of jstor s terms and conditions of use available athttp www jstor org about terms html jstor s terms and conditions of use provides in part that unless you have obtainedprior permission you may not download an entire issue of a journal or multiple copies of articles and you may use content inthe jstor archive only for your personal non commercial use please contact the publisher regarding any further use of this work publisher contact information may be obtained athttp www jstor org journals aea html each copy of any part of a jstor transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission the jstor archive is a trusted digital repository providing for long term preservation and access to leading academicjournals and scholarly literature from around the world the archive is supported by libraries scholarly societies publishers and foundations it is an initiative of jstor a not for profit organization with a mission to help the scholarly community takeadvantage of advances in technology for more information regarding jstor please contact support jstor org http www jstor orgsun feb 17 13 40 22 2008

feminist thought and economics or what do the visigoths know many economists have expressed concern that approaches borrowed from the humanities or from the softer social sciences will detract from the rigor and objectivity of economic science and give voice to those without proper training and in so doing reduce the discipline to a science no more defensible than alchemy since much feminist thought in economics draws heavily from intellectual traditions alien to mainstream economists e g critical interpretive theory cultural studies and feminist theory some economists may wonder what such modes of inquiry have to offer economics further they may ask are there no pitfalls in modes of inquiry not disciplined by accepted economic methodologies in short what do those visigoths know my purpose is to address issues in method and theory underlying recent feminist work in economics and to explain how economics may gain by opening its disciplinary gates from the perspective of traditional mainstream practice in economics two prominent issues emerge in considering modes of inquiry and theory drawn from other disciplines the first has to do with what counts as theory and the role of critique in theorizing the second has to do with the need to sort out better theories from worse and the perceived dangers of rampant relativism i will address these in turn

advertising and the us market demand for beer the us per capita market demand for beer is empirically estimated to determine the effect of advertising on the demand for beer the empirical results indicate that the most important determinants of demand are the price of beer the price of substitutes demographic factors and a light beer dummy variable the positive effects of income and lagged consumption appear to be small although many have argued that advertising promotes beer consumption the empirical results of this study do not support this hypothesis

transmutability generalised darwinism and the limits to conceptual integration this article explores the limits to conceptual integration between evolutionary biology cognitive neuroscience and economics the new learning in the natural sciences supplies material to update and enrich the microfoundations of institutional economics specifically the instinct habit psychology the framing of social reality with evolutionary concepts is however misguided in important respects metaphorical modelling is the transfer of concepts developed for the understanding of one domain to another ontological distinct domain the argument is made that the generalisation of darwinian principles to the phenomena of institutional persistence and change is theorising by metaphor because there are crucial ontological differences separating the natural and social domains social reality has the property of transmutability meaning the social environment unlike the natural domain is changeable by human agency this article endeavours to explain how the generalisation of the natural selection principle evokes a fallacious conception of institutional reality the idea that fitness in the social economic sphere is a matter of purposive adaptation by agents to exogenous conditions is misleading because real success in business or politics is transformative and is achieved by catalysing and maintaining advantageous shifts of widely prevalent habits of thought and behaviour copyright oup

religious participation and children s education a social capital approach abstract based on the argument in both economic and sociological literature that religion is conducive to children s human capital formation this paper provides a model of religious participation and explores a mechanism that social capital affects children s education a la coleman coleman j s 1988 social capital in the creation of human capital american journal of sociology 94 s95 s120 the model generates several interesting implications which help explain some important stylized facts about education and religion further in a dynamic setting the model shows that there exists a steady state in which individuals allocate a positive amount of time and resources to religious activities thus it complements the existing literature to explain why seemingly unproductive religions can be everlasting

coordination and contagion individual connections and peer mechanisms in a randomized field experiment abstract this paper investigates peer effects at the level of individual connections leveraging the approach to shed light on peer mechanisms in a field experiment using college freshmen we elicited best friends and offered monetary incentives for gym visits to a treated subset we find large spillovers from treated subjects to treated best friends but none from treated subjects to control best friends we also find evidence of a mechanism subjects coordinate by visiting the gym with best friends indicating that the intervention harnesses complementarities in utility or commitment mechanisms results highlight subtle peer effects and mechanisms that often go undetected

on some criticisms of critical realism in economics methodological comments on critical realism in economics have proliferated over the past decade typically focusing on tony lawson s economics and reality and reorienting economics which constitute the core of this project in the present paper we select a series of important mostly very recent arguments against critical realism in economics and assess their merits and demerits

stigler becker versus myers briggs why preference based explanations are scientifically meaningful and empirically important abstract economists typically object to preference based explanations of human behavior differences in preferences explain everything and therefore nothing but this argument is only correct assuming that no empirical evidence exists to discipline preference based explanations in fact over the past decade personality psychologists have produced a robust collection of stylized facts about human preferences while preferences are empirically quite stable they are far from identical and have proven predictive power for economically interesting variables the empirical challenge for future research is to jointly estimate the impact of preferences and constraints to obtain unbiased measures of their relative importance

rational behavior and economic theory abstract nowadays it seems almost universally presumed that the fundamental characteristic of homo oeconomicus is his rationality we analyze the role played by the concept of rationality in economic theory and demonstrate that it is necessarily constrained to be an essentially contentless notion we show that the main body of economic theory is firmly grounded and that some contrasting approaches to rationality although leading to heated debates and vivid confusion have no fundamental significance for economics with a refereshed view on the essence of economics we argue that the principles of economic theory form an essential methodological guide for the emergent line of research based on the use of so called evolutive models

sine praejudicio economics and the 2014 scottish independence referendum the purpose of this paper is to analyse the contribution of expert economic opinion to the 2014 referendum campaigns on scottish independence we argue that the input from economics to both sides of the debate as well as to independent analysis was constrained by a mainstream economics framing the result was a focus on calculable outcomes predicated on unchanging institutions and behaviour and the question of currency arrangements that assumes the status quo is an optimal currency area as the consequences of constitutional change for institutions and behaviour are uncertain an equilibrium framework treats anything beyond calculable prediction as a shock inducing fear of the unknown in contrast a political economy approach is tailored to analysing uncertain developments and encompassing the broader issues relating to values democracy and power and is thus better suited to the analysis of constitutional change

what is this school called neoclassical economics what is this school called neoclassical economics does it exist should it where does the term neoclassical economics come from and is there any connection between any of the current interpretations of the term and its original meaning how do we make sense of competing current interpretations is there a sustainable formulation these and related questions are raised and answered in an attempt to bring clarity to ongoing economic discussion and debate thereby to under labour for a more relevant academic economics discipline

synthesizing the malthusian and senian approaches on scarcity a realist account food entitlement decline fed and food availability decline fad are two approaches to explaining famines that have different policy implications one focuses on the systemic level whereas the other is concerned with the individual level they therefore analyse relatively distinct causal mechanisms thus an important question is whether these approaches can be reconciled another related question is how fad and fed based explanations relate to classical malthusian views about rapid food requirement increase fri this paper analyses these questions and argues that these three approaches can indeed be reconciled within a single framework by outlining the causal sources of fad fed and fri this task requires among other things the separation of ontological categories and empirical measures as a consequence of this argument the paper suggests that there are only seven possible ontological combinations of how a famine situation can arise as a direct cause simultaneously it maintains that there are virtually an infinite number of ways in which these combinations may act as indirect causes rooted in economic political and social conditions the analysis is exemplified by the bengal famine of 1943 because that famine is a well known case the wider research and policy applicability of this general account are discussed but have yet to be tested in relation to other scarcity cases water land fish this synthesis is made possible by the incorporation of critical realist interventions into economic theory

the intrinsic limits of modern economic theory the emperor has no clothes assumptions of the uniqueness and stability of general equilibrium in a walrasian framework have no theoretical justification this paper argues that the key reason for this is that the walrasian model treats people as acting independently of one another especially in their demand behavior this independence plays an essential role in constructing economies with arbitrary excess demand functions thus making individual behavior dependent or similar may open the way to obtaining meaningful restrictions on aggregate excess demand functions copyright 1989 by royal economic society

entrepreneurship social mobility and income redistribution in south india development economists have been preoccupied with the problem of increasing the size of the gnp pie to the relative neglect of its distribution despite the recent disenchantment with the viewpoint that all classes share in the benefits of industrial growth empirical data on the distribution of income business opportunity and economic power are in short supply many of the studies on entrepreneurship and economic development when they are not apologetics for ruthless capitalist exploitation as paul baran suggests extol the achievements of the capitalist entrepreneur without examining class origins and monopoly advantage joseph schumpeter sees entrepreneurs irrespective of class origin as heroic figures with the dream and will to found a private kingdom to conquer adversity to achieve success for its own sake and to experience the joy of creation for gustav papanek 1967 the private entrepreneur who is frugal diligent far sighted remarkably able and willing to take political risks is in large part responsible for the success of pakistan in achieving rapid industrialization

elephant poaching ivory trafficking problems in sub saharan africa an application of o hara s principles of political economy this paper examines the complex social problem of african elephant decimation using a political economy approach this paper applies five principles of o hara s political economy pope historical specificity circular and cumulative causation uneven development heterogeneous agents and contradiction pope provides a practical tool for scrutinising the interdependent aspects of a problem the culture of conspicuous consumption for ivory is a key historical driver of demand yet a core integrated factor that helps explain the current crisis relates to the principle of uneven development the role of uneven development can be indirect through lack of human development causing high crime and corruption rates weak policy frameworks and conflicts in land ownership further heterogeneity of agents adds to the complexity of the networks engaged in the decimation of elephants linked to the poaching trafficking circuit of heterogeneous agents this paper identifies two specific elephant contradictions between the market forces of durable fixed capital and environment elephant capital this study contributes to the literature by analysing the interlinking cumulative processes of elephant poaching and ivory trafficking networks which previous studies in the economics literature tend to ignore

ontology and the study of social reality emergence organisation community power social relations corporations artefacts and money the conception of social reality i have previously defended and here extend positing features such as social relations positions and powers is thoroughly naturalistic and even consistent with modern interpretations of quantum field theory it also serves to ground a social science that can be scientific in the sense of natural science this is the thesis defended here central to the argument is an emphasis on a strong form of emergence and the category of organisation in process to bring out various salient features of the position defended i take the opportunity to compare aspects of it with relevant components of the contribution of john searle whose ontological conception appears at once to be both very similar yet also very different copyright the author 2012 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

what s in a name tony lawson on neoclassical economics and heterodox economics in this article i respond to tony lawson s what is this school called neoclassical economics lawson s paper is provocative because it reformulates neoclassical economics based on veblen s original intent as a mismatch created by recognising the value of an evolutionary approach to the economy whilst remaining over reliant on elements of a taxonomic approach for lawson many heterodox economists may be neoclassical under this description i argue that there is clearly a case to be heard but that the reformulation of the neoclassical raises a number of issues there are issues concerning the specific critique of the current usage of the term neoclassical regarding genealogy and meaning there are specific issues regarding the further development of the new old veblen definition of the neoclassical how clear is the definition in a practical context as a way to identify a neoclassical group based on the commitments of the critique and the definition what does it mean to be more realistic and what is the strategic value of such a provocation for heterodoxy i argue that the combination of these are reasons for more consideration of issues of social ontology not less insofar as the terms of the argument are incomplete and this invites both lawson and those he is criticising to progress the argument particularly on method

ontology and the history of economic thought the case of anti reductionism in the work of friedrich hayek tony lawson has long advocated an ontological turn in the history of economic thought this essay aims to contribute towards that goal by considering how one aspect of the methodology adopted by a prominent heterodox economist was informed by ontological considerations the economist is friedrich hayek the aspect of his methodology concerns the possibility of reductionism while the ontological category that informs his anti reductionist methodology though not as we shall see in a wholly consistent way is that of emergence the account presented below suggests that the notion of emergence played an increasingly important and also increasingly explicit role in the arguments hayek mounts against reductionism in his postwar work on theoretical psychology and social theory in the case of his theoretical psychology notwithstanding the fact that he had access to a set of concepts that afforded him the opportunity to mount an emergentist case against reductionism hayek s most prominent argument against reductionism was and remained computational rather than emergentist in nature in the case of his mature post 1960 social theory however hayek explicitly advanced a consistently emergentist case against reductionism based on the importance of organising relations for the generation of higher level structural properties such as the coordinative powers of the liberal market economy the implications of this ontologically informed discussion of hayek s arguments against reductionism for existing interpretations of hayek s work are considered

international passenger transport and climate change a sector analysis in car demand and associated co2 emissions from 2000 to 2050 abstract the paper provides global regionalized projections of passenger car demand use and associated co 2 emissions from 11 world regions the study is based on empirical data that have been originally collated from international sources for the purpose of modeling region specific car stock demand derived demands serve as indicator of car related fuel consumption and associated co 2 emissions which are calculated on the basis of behavioral and technological scenarios the obtained co 2 emission paths are sectoral baseline scenarios that identify region specific potentials of growth in car induced co 2 emissions assuming that current trends continue to prevail the study adopts a multi model approach to car demand by applying two methodologies rooted in the economics of consumption utility maximization and single equation models the utility maximization method for modeling car demand is driven by the preferences of the representative consumers of each world region subject to exogenous price and income trajectories the latter is adopted from an optimal growth model this is a novel approach to projecting global regionalized sectoral car demands the study is complemented by the application of single equation income consumption models based on logistical gompertz functions and non linear regression techniques to compare model results

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

the current economic crisis its nature and the course of academic economics the current crisis has triggered significant debate concerning economic theory and policy largely absent from this debate is an informed discussion of the methods used by economists in analysing the economy and formulating their proposals but method matters here i argue that current academic research practices need to be transformed before real insight can be achieved specifically i indicate why and how a more grounded framework than that presupposed by current research practices facilitates a potentially more fruitful approach to understanding the crisis

terrorism the relevance of the rational choice model terrorism in general and suicidal terrorism in particular is popularly seen as irrational but many economists and political scientists argue otherwise this paper distinguishes three different senses of irrationality unresponsiveness to incentives deviation from narrow self interest and failure of rational expectations it concludes that an intermediate position on the rationality of terrorism is appropriate the typical terrorist sympathizer deviates only slightly from homo economicus but active terrorists arguably stray from narrow self interest and rational expectations and suicidal terrorists probably violate both deterrence remains a viable anti terrorism strategy but deviations from rational expectations increase the potential of persuasion and appeasement

shackle on time uncertainty and process this paper is intended both as a contribution to the conceptual work on process in economic thought and as an attempt to connect a non institutionalist non evolutionary thinker to it the paper has two principal objectives i to delineate a broad philosophically grounded conception of what an economic process theory ept is and ii to locate the contributions of george shackle within this broad conception of ept in pursuing these two objectives i hope to draw out the originality and significance of shackle s economics with a particular emphasis on what he adds to process conceptions developed within other heterodox traditions such as institutional and evolutionary economics i will also highlight some of the perceived limitations of shackle s approach and link them to the limitations of process philosophy

evaluation of financial liberalization a general equilibrium model with constrained occupation choice the objective of this paper is to assess both the aggregate growth effects and the distributional consequences of financial liberalization as observed in thailand from 1976 to 1996 a general equilibrium occupational choice model with two sectors one without intermediation and the other with borrowing and lending is taken to thai data key parameters of the production technology and the distribution of entrepreneurial talent are estimated by maximizing the likelihood of transition into business given initial wealth as observed in two distinct datasets other parameters of the model are calibrated to try to match the two decades of growth as well as observed changes in inequality labor share savings and the number of entrepreneurs without an expansion in the size of the intermediated sector thailand would have evolved very differently namely with a drastically lower growth rate high residual subsistence sector non increasing wages but lower inequality the financial liberalization brings welfare gains and losses to different subsets of the population primary winners are talented would be entrepreneurs who lack credit and cannot otherwise go into business or invest little capital mean gains for these winners range from 17 to 34 percent of observed overall average household income but liberalization also induces greater demand by entrepreneurs for workers resulting in increases in the wage and lower profits of relatively rich entrepreneurs of the same order of magnitude as the observed overall average income of firm owners foreign capital has no significant impact on growth or the distribution of observed income

the effects of banning advertising in junk food markets we develop a structural model to analyze the eects of banning advertising on market equilibria and welfare in junk food markets we consider the impact on demand and prices and show how to quantify welfare eects when advertising might lead consumers to take decisions that are inconsistent with their underlying preferences we use transaction level data on the potato chips market and nd that banning advertising leads to a direct reduction in demand but also toughens price competition leading to lower prices and increased demand welfare increases as consumers benet from no longer making distorted

group consumption free riding and informal reciprocity agreements we examine conditions under which group consumption is likely to involve informal reciprocity agreements rather than a price system our model shows that reciprocity agreements are used when transactions costs are high the good is inexpensive demand is inelastic the group continues to interact over time the consumers are patient the time between interactions is short and the group is small and homogeneous further the results suggest that reciprocity agreements are likely to involve goods that are consumed along with other group benefits such as companionship we use the model to analyze overlapping social networks and investments in social capital

transforming economics into what heterodox economics and critical realism the volume under review consists of comments on critical realism by heterodox economists this paper addresses a number of themes from the book e g history and reflexivity sometimes expanding on the authors comments on critical realism other times responding to them on behalf of critical realists it considers the goals of critical realism and ask to what extent the book furthers them it concludes that the high level of abstraction at which critical realism operates encourages those commenting on it to do so at a similarly high level of abstraction as it stands critical realism and the contributions to the book are too divorced from the concerns of concrete economic theorising to be of great use to practising heterodox economists

genetic variation in financial decision making individuals differ in how they construct their investment portfolios yet empirical models of portfolio risk typically account only for a small portion of the cross sectional variance this paper asks whether genetic variation can explain some of these individual differences following a major pension reform swedish adults had to form a portfolio from a large menu of funds we match data on these investment decisions with the swedish twin registry and find that approximately 25 of individual variation in portfolio risk is due to genetic variation we also find that these results extend to several other aspects of financial decision making

of mice and men automated valuation models and the valuation profession the rise in the use of automated valuation models avms poses questions about the long term survival of the property valuation profession avms provide quick and cheaper valuations which in this v

new foundations for ecological economics abstract ecological economics has been repeatedly described as transdiciplinary and open to including everything from positivism to relativism i argue for a revision and rejection of this position in favour of realism and reasoned critique looking into the ontological presuppositions and considering an epistemology appropriate for ecological economics to meaningfully exist requires rejecting the form of methodological pluralism which has been advocated since the start of this journal this means being clear about the differences in our worldview or paradigm from others and being aware of the substantive failures of orthodox economics in addressing reality this paper argues for a fundamental review of the basis upon which ecological economics has been founded and in so doing seeks improved clarity as to the competing and complementary epistemologies and methodologies in part this requires establishing serious interdisciplinary research to replace superficial transdisciplinary rhetoric the argument places the future of ecological economics firmly amongst heterodox economic schools of thought and in ideological opposition to those supporting the existing institutional structures perpetuating a false reality of the world s social environmental and economic systems and their operation

econ 101 in need of a sustainability transition abstract ecological economics was one of the first of a number of scientific communities to develop transdisciplinary understandings of the sustainability challenges faced by society as a field with economics in its name ecological economics differs from the other communities and should face the particular task of contributing to the development of a new economics for economics to promote sustainability transitions it is not enough to call for more pluralism a new basic structure of economic knowledge should be developed in order to provide the foundation for a sustainability transition to econ 101 this paper argues that the performativity of economics needs to change and proposes a way of structuring econ 101

emergent extremism in a multi agent model of religious clubs i introduction religious extremism is as old as religion itself but the tendency to promote militancy and terrorism from within extremist religions appears to be much more common now than in times past juergensmeyer 2001 stern 2003 wiktorowicz 2005 1 today s terrorists routinely frame their objectives in religious terms and organize their activities within religious movements this shift is not due to increased militancy within religion as a whole not even within the stricter subset of religious groups commonly labeled sectarian or fundamentalist bromley and melton 2002 marty and appleby 1995 rather groups with militant objectives are increasingly leveraging the latent potential for violence within extremist religion krueger and maleckova 2003 and krueger 2007 have shown that contrary to popular hypotheses regarding the salience of poverty and education it is instead institutional conditions such as civil liberties that contribute to the origination of terrorists within a country religious extremism has been shown to be a potentially powerful input into the production of terrorism berman 2004 2 and the origination of terrorists has been empirically connected to civil liberties we seek to complete the triangle and connect religious extremism to social conditions in an extension of existing theory and test the predictions of the model in an empirical context with an eye toward civil liberties this paper extends previous models of religious clubs to better account for observed patterns of extremism across different settings and test policies most likely to reduce the appeal of extremism economists at first blush should have trouble explaining the survival of groups that demand large sacrifices from their members successful religious groups however routinely impose all sorts of apparently unproductive costs on their members iannaccone 1992 introduced a formal model of religious clubs within which apparently irrational sacrifice and stigma enhances the individual and collective utility his model demonstrated the feasibility of extremist groups but does less to explain the relative prevalence of extremism across time and place further the original model allows for only corner solutions and as such the viability of extreme groups is indistinguishable from the viability of the more moderate groups they must compete with for members in the religious marketplace in section ii we revisit analyze and extend the club model of religion we push the analysis of the original model exploring sacrifice substitutability of club and private goods and their relationships to member commitment and the viability of extremist groups in this preliminary analysis we illustrate not only the potential insights of the club theory of religion into the strength and viability of extremist groups but also the limitations inherent to the representative agent model we proceed by extending the model in a multi agent ma computational framework this framework permits us to analyze the distributions of agents and clubs that make up a religious economy the computational nature of the model is critical because it allows for sufficient heterogeneity of agents and clubs and given this heterogeneity agent decision making absent closed form solutions via nash equilibria extremists groups emerge as just one segment the high cost tail of a distribution of religious clubs that range across the full spectrum of potential group imposed sacrifice and stigma extremism is identifiable and comparable in the model because it exists within a full spectrum of clubs by varying the parameters of the model that control the distribution of secular wages across agents and the degree of substitutability between religious and secular commodities we can better explain where and when religious extremism is most popular its strength relative to more moderate groups and which economic policies reduce its prevalence

john nash the master of economic modeling during the past two decades non cooperative game theory has become a central topic in economic theory many scholars have contributed to this revolution none more than john nash following the publication of von neumann and morgenstern s book it was nash s papers in the early fifties which pointed the way for future research in game theory the notion of nash equilibrium is indispensable nash s formulation of the bargaining problem and the nash bargaining solution constitute the cornerstone of modern bargaining theory his insights into the non cooperative foundations of cooperative game theory initiated an area of research known as the nash program nash s analysis of the demand game in which he uses a perturbation of a game to select an equilibrium inspired the construction of several refinements of the notion of nash equilibrium a scholar s influence does not necessarily qualify him for a nobel prize one may argue that such awards are a social institution established to serve social goals it is legitimate to ask what message the swedish academy sends to the scientific community and the rest of the world in some cases prizes are designed to encourage individuals to invest their resources in endeavors that are important to society nash s achievements depend more on his genius than on characteristics which can be encouraged by utilitarian incentives sometimes prizes are expressions of social indebtedness towards members of society who have devoted their life towards advancing a social goal nash s active career was intensive but very short and i have not heard that he deliberately sacrificed attractive alternatives in favor of advancing economic knowledge prizes are also intended to promote the recipient s field of research by now game theory is well recognized any graduate student in economics is familiar with the foundations of non cooperative game theory and i doubt that there is any further need to expand the influence of game theory

the limits of ontological critique from judgmental rationality to justification the cambridge social ontology cso programme s inability to generate a meaningful dialogue with mainstream economics is difficult to understand by mere reference to judgmental rationality and without reference to cso s ideological configuration our paper uses an economie des conventions framework to draw systematic comparisons between cso s ideological configuration and the ideological configurations of mainstream economic theories and practice the resulting analysis helps us to understand not only why cso generated little response from the mainstream but also how cso might renew its critique in ways that might be more likely to produce a response

enterprise inequality and economic development we characterize an equilibrium development process driven by the interaction of the distribution of wealth with credit constraints and the distribution of entrepreneurial skills when efficient entrepreneurs are relatively abundant a traditional development process emerges in which the evolution of macroeconomic variables accord with empirical regularities and income inequality traces out a kuznets curve if instead efficient entrepreneurs are relatively scarce the model generates long run distributional cycles driven by the endogenous interaction between credit constraints entrepreneurial efficiency and equilibrium wages

attitudes and allocations status cognitive dissonance and the manipulation of attitudes abstract economic studies of social status have typically focused on individuals engaging in relative comparisons based on certain characteristics e g consumption wealth without considering why these characteristics are deemed status worthy in this paper individuals choose a status earning characteristic in order to reduce mental discomfort dissonance as a result those individuals with the highest marginal utility from income are often the first to misconstrue or abandon these incentives in favor of alternate forms of seeking status the model provides an explanation for endogenous class formation and highlights the role of redistributive taxation in manipulating individuals attitudes towards status

the robot the party animal and the philosopher an evolutionary perspective on deliberation and preference this paper examines the evolutionary fitness of a variety of ways of reaching decisions in early hunter gatherer societies in order to derive insights about how economists should view modern consumers it challenges conclusions reached by mainstream economists robson rayo and becker about why hunter gatherers needed sensory rewards and about the kinds of preference systems that would have conferred evolutionary fitness it argues that evolution favours those with a variety of ways of reaching decisions programmed deliberative intuitive and go with the flow and that the prospect of sensory rewards serves an evolutionary role by diverting people from thinking too much about what they are doing in situations in which deliberation might interfere with survival or reproduction the evolutionary role of a reluctance or failure to make trade offs is also considered along with the benefits of developing a relatively fixed identity rather than being all things to all men

towards sustainable consumption economic modelling of mobility and heating for austria abstract the paper focuses on economic modelling and empirical analysis of sustainable structures in private consumption and strives to extend conventional economic consumption models the model analysis of sustainable consumption in the areas heating and transport for austria attempts to depart from traditional measurement of consumption in national accounts and economic consumption models the focus of the analysis is laid on consumer services derived from a combination of stocks e g building stock transport systems and flows mainly energy this approach intends to illustrate that a concentration on flows in consumption models lacks important aspects of sustainable consumption the economic analysis of sustainable consumption patterns aims to highlight the effects related to the substitution of flows by stocks in the consumption areas transport and heating e g improvements in thermal quality of buildings more energy efficient transport systems relevant too in this respect is the role that can be played by technological innovation improvements in energy efficiency of stocks the potential for specific incentives to promote new technologies two essential factors are crucial in the context of sustainable consumption the demand shifts concerning the consumer services desired and the composition of the stock flow mix necessary for the service provision

paying attention or paying too much in medicare part d we study whether people became less likely to switch medicare prescription drug plans pdps due to more options and more time in part d panel data for a random 20 percent sample of enrollees from 2006 2010 show that 50 percent were not in their original pdps by 2010 individuals switched pdps in response to higher costs of their status quo plans saving them money contrary to choice overload larger choice sets increased switching unless the additional plans were relatively expensive neither switching overall nor responsiveness to costs declined over time and above minimum spending in 2010 remained below the 2006 and 2007 levels

shadow pricing in a specific factors model rejoinder in their comment on my paper maneschi 1985 tower pursell and han henceforth tph correctly point out that in the specific factors model unlike the situation in a model where goods and factors are equal in number the withdrawal of a unit of a factor induces changes in the prices of all factors which may have repercussions on a policy maker s welfare function and occasion a drain on foreign exchange in addition to value of the production loss associated with the withdrawal of the factor itself they list a number of possible implicit assumptions that could dispense with the need to reckon with these repercussions and go on to set out a model that explicitly allows for them the model used by tph for this purpose is based on a welfare function for the policy maker given by the summation of changes in different individuals incomes yo i multiplied by distributional weights vi that this is a more general welfare function than one that weights every individual equally is of course incontrovertible however for better or worse most of the international trade theory literature is predicated upon the national welfare function s being a blown up version of that of a single representative individual this is also true of some papers of the trade theoretic shadow pricing literature which derive utility based shadow prices of factors such as bhagwati and srinivasan 1981 in which a social utility function is postulated containing the aggregate amounts of consumptions of commodities as arguments interestingly enough even in the monograph by tower and pursell 1986 referred to by tph most of the analysis is conducted in terms of aggregate consumer preferences and only one section of a chapter section 9 of chapter iii assumes heterogeneity of individual consuming units while in theory it is doubtless desirable to allow

the market for preferences learning processes are widely held to be the mechanism by which boundedly rational agents adapt to environmental changes we argue that this same outcome might also be achieved by a different mechanism namely specialisation and the division of knowledge which we here extend to the consumer side of the economy we distinguish between high level preferences and low level preferences as nested systems of rules used to solve particular choice problems we argue that agents while sovereign in high level preferences may often find it expedient to acquire in a pseudo market the low level preferences in order to make good choices when purchasing complex commodities about which they have little or no experience a market for preferences arises when environmental complexity overwhelms learning possibilities and leads agents to make use of other people s specialised knowledge and decision rules

how similar are alcohol drinkers international evidence stigler and becker 1977 argue that tastes neither change capriciously nor differ importantly between people it is differences in prices and incomes that determine differences in behaviour in this paper we analyse the alcohol consumption patterns of drinkers from 8 industrialized countries we identify a number of empirical regularities and verify stigler and becker s hypothesis that income and price elasticities of demand are international constants by showing that alcohol consumption patterns in the eight countries exhibit intriguing similarities the income and price elasticities of alcohol are found to be about 0 8 and 0 6 respectively in all eight countries

credit constraints competition and meritocracy this paper studies a simple model of the talent ownership mismatch or failure of meritocracy brought about by credit market imperfections that prevent the transfer of control over productive assets from the untalented rich to the talented poor we present two main insights first there may be multiple equilibria in the degree of meritocracy second the severity of the misallocation of talent depends on the degree of concentration on the good market hence reforms that improve the workings of the credit market such as better enforcement of contracts and reforms that reduce concentration such as deregulation are to some degree substitutes in bringing about greater meritocracy we also examine which reform strategy is more likely to enhance efficiency without violating political constraints jel g3 o10 o47

prospects for a heterodox economics of the environment and sustainability this paper introduces a special issue on heterodox economics of the environment and sustainability at present humanity faces several challenges such as resource scarcity biodiversity loss and climate change and yet we would argue contributions from traditional heterodox schools of thought such as post keynesianism marxism and to a lesser extent institutionalism have had relatively little to say about them instead the economic analysis of environmental issues has been dominated by approaches inspired by neoclassical economics and latterly by ecological economics the special issue is part of an effort to stimulate more heterodox work on the environment and to explore connections between existing groups of scholars particularly between ecological and heterodox economists

purchasing power parity and real factors it is acknowledged that purchasing power parity ppp fails in empirical tests the position adopted is that real factors are an omitted variable from the ppp relationship and are the cause of divergences from ppp the real exchange rate as being determined by supply and demand shift factors as in stockman 1987 and neary 1988 is modelled we then empirically estimate a real exchange rate equation and use the fitted value as a generated regressor in tests of ppp it is demonstrated that when changes in the real exchange rate are incorporated into the ppp relationship ppp improves

the contemporary relevance of a cambridge tradition economics as political economy political economy as social theory and ethical theory in this review essay i set out key aspects of nuno martins the cambridge revival of political economy in so doing i also provide some comments on the current state of economics since these provide some context for an appreciation of what martins is trying to achieve martins is focused on making the positive case for classical political economy cpe as a form of theory that is quite different from the modern mainstream for martins that difference is based on its approach to the distribution of a surplus expressed through a social ontology that is based on historical open systems and in which the key aspect of open systems is the institutional and hence deliberative activity by which the surplus is decided which is ultimately an issue for ethics it is through a cambridge tradition focusing on sraffa keynes lawson and sen that cpe a classical social theory and ethical deliberation are brought together bringing them together is an act of synthesis and i conclude by providing a constructive critique of the terms of this synthesis

order and process in institutionalist thought commons and ayres process is a central category in institutionalist economics conceptions of process often bound up with ideas of historical time and circular or cumulative causation are regularly used to distinguish institutionalism from mainstream theorising and to highlight similarities or complementarities with other heterodox positions discussions of institutionalist ideas of process however have tended to concentrate on the contributions of thorstein veblen to the exclusion of those of other major institutionalists in contrast this article considers two other important contributors to institutionalist thought john commons and clarence ayres the differences between these authors works are often thought to articulate some kind of a fault line in institutionalist thought highlighting very different and indeed incompatible positions i argue that although their overall projects are clearly very different if attention is focussed on the general ontological presuppositions of each author there exists a good measure of common ground between them this is especially the case if comparisons are made in line with the focus of this special issue between their conceptions of process and order from an ontological perspective moreover those aspects of their accounts that at first appear at odds are rather shown to be quite compatible and even usefully complementary

the convoluted influence of robbins s thinking on the emergence of economics imperialism this article analyses the influence of robbins s thought on the subsequent development of economics imperialism first the analysis of some passages that have been overlooked up to the present in which the author explicitly expresses his disbelief in the omnipotence of the economic method makes it possible to argue that robbins did not share the confidence exhibited by the advocates of economics imperialism in the capacity of economics to explain non economic phenomena second this article shows that robbins describes the influence of real scarcity on human behaviour in terms of a static constrained maximization problem thereby confusing issues of method and scope in his writings this confusion facilitated the view that economics is a method without a proper subject matter and its later expansion into other fields in conclusion although robbins cannot be counted as an earlier promoter of economics imperialism the misunderstandings implicit in his writings paved the way for the emergence of this intellectual movement

world food demand long term projections of global food demand are heavily dependent on which functional form of the food demand equation is used given that real incomes can change substantially over the long term key elements are the dependence of the income elasticity on income which ensures that the food budget share always lies within the 0 1 range and the role of income inequality this article analyzes these issues proposes a new functional form that deals with them and presents estimates of income and price elasticities for food in 138 countries copyright 2012 oxford university press

critical realism and the austrian paradox austrian economics provokes mixed reactions among critical realists it preaches methodological individualism marginalism and rational choice while embracing emergence open processes and error the austrian school stands paradoxically with one foot each in the mainstream marginalist tradition and heterodox social theory i argue that this paradox can be disentangled by appeal to the fundamental distinction between the logic of choice and the logic of action i then extend the analysis of the logic of action to the critical realist account of the basic ontology of social structures arguing that successful retroduction of social structures depends on marginalist insights

shadow pricing in a specific factors model comment recently in this journal maneschi 1985 calculated shadow prices of factors for a small country that produces and consumes many goods all of which are traded at fixed world prices and are produced using intersectorally mobile labour and a sector specific capital stock all factors are fixed in supply and the distortions considered consist of fixed import tariffs and or export subsidies sector specific wage differentials and minimum wages the work is closely related to that of srinivasan and bhagwati 1978 henceforth sb who calculate shadow prices of factors for a country which produces two goods using two intersectorally mobile factors of production the analysis is similar in that both papers calculate the shadow price of a factor of production as the fall in the value of the country s output measured at world prices resulting from governmental withdrawal of a unit of the factor from the private sector for use in a hypothetical project this is always legitimate in the sb model because fixed import tariffs fixed export subsidies and fixed world prices serve to freeze all product and factor prices in the domestic economy in the face of altered factor supplies to the private sector this means that when the government withdraws a unit of a factor from the private sector to use in a project each individual s utility and consumption bundle will be left unchanged and the only cost to the government will be the increase in the rate at which its foreign exchange reserves are used up which will just equal the change in the value of domestic output at world prices thus in this case the social cost or shadow price of a unit of the factor in foreign exchange numeraire is just the change in domestic output valued at world prices

consumers with differing reaction speeds scale advantages and industry structure abstract the development of an industry is seen as the outcome of a differential game in which market shares flow in response to price differences it is hypothesized that while all consumers eventually react to price differences some are slower than others if scale advantages have some influence on marginal costs around average market share then under reasonable conditions only skewed size distributions can be locally stable steady states in addition and contrary to common belief the largest firm need not eventually monopolize the industry

the effect of succession taxes on family firm investment evidence from a natural experiment this paper provides causal evidence on the impact of succession taxes on firm investment decisions and transfer of control using a 2002 policy change in greece that substantially reduced the tax on intrafamily transfers of businesses i show that succession taxes lead to a more than 40 decline in investment around family successions slow sales growth and a depletion of cash reserves furthermore succession taxes strongly affect the decision to sell or retain the firm within the family i conclude by discussing implications of my findings for firms in the united states and europe

a theory of trickle down growth and development this paper develops a model of growth and income inequalities in the presence of imperfect capital markets and it analyses the trickle down effect of capital accumulation moral hazard with limited wealth constraints on the part of the borrowers is the source of both capital market imperfections and the emergence of persistent income inequalities three main conclusions are obtained from this model first when the rate of capital accumulation is sufficiently high the economy converges to a unique invariant wealth distribution second even though the trickle down mechanism can lead to a unique steady state distribution under laissez faire there is room for government intervention in particular redistribution of wealth from rich lenders to poor and middle class borrowers improves the production efficiency of the economy both because it brings about greater equality of opportunity and also because it accelerates the trickle down process third the process of capital accumulation initially has the effect of widening inequalities but in later stages it reduces them in other words this model can generate a kuznets curve

economic schools of thought on the environment investigating unity and division how do ecological and heterodox economists differ if at all from each other and from neoclassical economists addressing environmental problems in 2009 we probed this question by conducting an international survey across these communities namely at conferences of the european society for ecological economics the association for heterodox economics and the european association of environmental and resource economists the research was designed to gain insight into the extent to which ecological economics can be described as heterodox and a distinct field from orthodox environmental and resource economics conflicting visions of ecological economics have led to a prevalence of neoclassical articles and thought mixed in amongst more heterodox work we introduce a novel classification of work in the field of environmental policy in order to test for the existence of differences in terms of methodological and ideological approaches how heterodox economists understand environmental issues is also an important question to answer if there is to be more collaboration between them and ecological economists the findings have implications for cooperation and the future direction of both ecological and heterodox economics

the dynamics of the wealth distribution and the interest rate with credit rationing are uniquely determined and wealth dispersion among individuals or firms is irrelevant introducing credit rationing into the solow model modifies these conclusions multiple stationary interest rates and wealth distributions can exist because higher initial rates can be self reinforcing through higher credit rationing and lower capital accumulation the wealth accumulation process is ergodic in every steady state but wealth mobility is lower with higher steady state interest rates aggregate output is higher in steady states with lower interest rates because credit is better allocated short run interest rate or distribution shocks can be self sustaining and can have long run effects on output through the induced dynamics of the wealth distribution and credit rationing

the economics of identity and the identity of economics drawing upon individual and social choice theory the economic approach to identity associated with akerlof and kranton is critically assessed in terms of its own definitional and technical conundrums this leads on to an external critique in terms of the limited extent to which identity can be addressed by mainstream economic methods indeed the latter essentially sets aside the insights into the nature of identity that emerged with modernism let alone postmodernism as a result the enterprise of constructing an economics of identity is set in the context of recent changes in and disagreement over interpretation of the identity of contemporary economics

economics for the future many of us decided to study economics because we were interested in issues such aseconomic growth unemployment poverty discrimination and social exclusion andfor much of the history of the discipline economists grappled with explaining suchphenomena and hopefully helped to improve the development of economic policy but now the discipline is increasingly dominated by other concerns such asmathematical rigour and econometric modelling the new york times columnist michael weinstein recalled how his passion to learn economics which was driven bya desire to understand the causes of poverty and the impact of technical change wasimmediately quelled when on his rst day as a graduate student at the massachusettsinstitute of technology the professor announced that all of economics is a subset ofthe theory of separating hyperplans weinstein 2000 the subject has become soobscure that even orthodox economists are bemoaning its intellectual poverty accordingtomiltonfriedman economicshasbecomeincreasinglyanarcanebranchof mathematics rather than dealing with real economic problems friedman 1999 p 137 and robert solow has observed today if you ask a mainstream economista question about almost any aspect of economic life the response will be suppose wemodel that situation and see what happens modern mainstream economics consistsof little else but examples of this process quoted in lawson 2005 so many economists are now increasingly engaged in research and teaching that isdisconnected from the issues that in uence people s lives as long 2005 observed academiceconomistsremainhiddenintheirivorytowers theyareneitherhouseholdnames nor a signi cant presence in newspaper commentary pages how strange fora country that produced the most famous economists of all time adam smith davidricardo and john maynard keynes but not all remain hidden in their ivory towers there are a few who do in uence the policy domain but they come from the intel lectually narrow sect of neoclassical economics and there are those from the neo classical sect who have managed to in ltrate popular culture by throwing away themaths packaging their prose in airport style books and entertaining their readerswithstories about why sumo wrestlers cheat and why drug pushers live with their mums see levitt and dubner 2005 as modern orthodox economics moves away from reality there is both theopportunity and the need for heterodox economics to orientate economics towards

gary becker as teacher this paper looks at the work of gary s becker american economist professor of sociology friend and colleague of kevin m murphy murphy discusses the traditional approach of becker s teaching and ideas as they were expressed through his wealth of content and style in course design his discussions on the role of preferences technology and constraints as they influence household production and his emphasis on the importance of markets and desire for more murphy recognizes becker s teaching style as groundbreaking unapologetic and pure economics

heterodox economics history and prospects frederic s lee s collection of essays makes a substantial contribution to our understanding of the history of heterodox economics and to our sense of heterodox economics as a community this paper explores issues arising from the collection in relation to the characterisation of this history the understanding of heterodox economics itself and the nature and role of such a history from a historiographical perspective the paper concludes with a discussion of the future of heterodox economics and an argument for a pluralist strategy for its promotion copyright the author 2011 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

the nature of heterodox economics heterodoxy serves as an umbrella term to cover the coming together of separate projects or traditions in answering the question what distinguishes heterodoxy from the orthodoxy the author argues that matters of ontology are central in answering the question how are the various traditions that make up the modern heterodoxy to be distinguished from each other the author defends criteria other than varying commitments to specific substantive theories policy measures or techniques or basic units of analysis