dunnettreader + equilibrium   32

Egmont Kakarot-Handtke - Schumpeter and the Essence of Profit :: SSRN - May 2011, update May 2015
University of Stuttgart - Institute of Economics and Law -- Schumpeter had a clear vision of the developing economy, but he did not formalize it. The quest for a germane formal basis is in the following guided by the general question: what is the minimum set of foundational propositions for a consistent reconstruction of the evolving money economy? We start with three structural axioms. The claim of generality entails that it should be possible to free Schumpeter’s approach from its irksome Walrasian legacy and to give a consistent formal account of the elementary circular flow that served him as a backdrop for the analysis of the entrepreneur-driven market system. -- Pages in PDF File: 28 -- Keywords: new framework of concepts, structure-centric, axiom set, profit, money, credit, structural stress, catching-up process, monopoly -- downloaded pdf to Note
paper  SSRN  economic_theory  economic_history  intellectual_history  19thC  20thC  Schumpeter  economic_growth  economic_sociology  entrepreneurs  profit  investment  Innovation  creative_destruction  money  markets-structure  monopoly  prices  firms-theory  neoclassical_economics  equilibrium  downloaded 
september 2015 by dunnettreader
Egmont Kakarot-Handtke - Economics for Economists :: SSRN - update April 2015
University of Stuttgart - Institute of Economics and Law -- The characteristic capability of science – to turn whatever it might touch into knowledge – seems to have eluded economics. Currently, economists do not understand how the economy works. To get out of the cul-de-sac requires a paradigm shift. It consists in replacing behavioral axioms by structural axioms. The subject matter of theoretical economics is not human behavior but systemic behavior. From the structural analysis follows a new Law of Supply and Demand and a new Profit Law for the economy as a whole. The conventional supply-demand-equilibrium approach is refuted. This implies that the reliance on the spontaneous order metaphor is unfounded. -' Number of Pages in PDF File: 29 -- downloaded pdf to Note
paper  economic_theory  macroeconomics  profit  equilibrium  behavioralism  agency-structure  agent-based_models  downloaded 
september 2015 by dunnettreader
David Glaser - Romer v. Lucas | Uneasy Money - August 13 2015
If the social functions of science were being efficiently discharged, this rather obvious replacement of problem solving by question begging would not have escaped effective challenge and opposition. But Lucas was able to provide cover for this substitution by persuading the profession to embrace his microfoundational methodology, while offering irresistible opportunities for professional advancement to younger economists who could master the new analytical techniques that Lucas and others were rapidly introducing, thereby neutralizing or coopting many of the natural opponents to what became modern macroeconomics. So while Romer considers the conquest of MIT by the rational-expectations revolution, despite the opposition of Robert Solow, to be evidence for the advance of economic science, I regard it as a sign of the social failure of science to discipline a regressive development driven by the elevation of technique over substance.
prices  sociology_of_knowledge  sociology_of_science  neoclassical_economics  Keynesianism  RBC  economic_models  macroeconomics  Kuhn  Romer  Laktos  economic_theory  Solow  New_Keynesian  sociology_of_science_&_technology  equilibrium  microfoundations  rational_expectations  mathematization  from instapaper
august 2015 by dunnettreader
Frank Hahn - Some Adjustment Problems | JSTOR - Econometrica, Vol. 38, No. 1 (Jan., 1970), pp. 1-17
Some Adjustment Problems, F. H. Hahn, Econometrica, Vol. 38, No. 1 (Jan., 1970), pp. 1-17 -- This paper first takes a rather pessimistic look at what has been accomplished in recent years in understanding the "price mechanism." It then takes up two points in some detail. First, it is shown that stationary expectations do not ensure the convergence of all equilibrium paths on to a steady state in a neoclassical model with heterogeneous capital goods (an appendix works an example). Secondly, a tatonnement process is outlined and discussed for an economy with constant returns to scale. -- via Lars Syll -- downloaded pdf to Note
article  jstor  economic_theory  prices  equilibrium  capital  investment  economic_models  macroeconomics  neoclassical_economics  downloaded 
june 2015 by dunnettreader
Lars Syll - The Bernake-Summers Imbroglio | RWER April 2015
As no one interested in macroeconomics has failed to notice, Ben Bernanke is having a debate with Larry Summers on what’s behind the slow recovery of growth rates since the financial crisis of 2007. To Bernanke it’s basically a question of a savings glut. To Summers it’s basically a question of a secular decline in the level of investment. To me the debate is actually a non-starter, since they both rely on a loanable funds theory and a Wicksellian notion of a “natural” rate of interest — ideas that have been known to be dead wrong for at least 80 years … Let’s start with the Wicksellian connection and consider what Keynes wrote in General Theory: -- helpful re Keynes' rejection of "natural rate" (in effect there's a different natural rate for each level of employment - income, so it's comparative statics that blows up when savings or investment change, rather than being able to derive new equilibrium natural rate) -- and the problems with loanable funds theory - looks especially at Minsky and Kalecki - credit creation isn't result of increased savings but increased investment. Good snips and links -- saved to Pocket
economic_theory  macroeconomics  stagnation  savings_glut  global_imbalance  interest_rate-natural  monetary_policy  monetary_theory  central_banks  credit  financial_system  financial_economics  loanable_funds  investment  accounting_IDs  equilibrium  economic_models  Keynes  Minsky  Kalecki  links  Instapaper 
april 2015 by dunnettreader
Giovanni Dosi, et al -Fiscal and Monetary Policies in Complex Evolving Economies -- 2013 :: SSRN
Giovanni Dosi, Giorgio Fagiolo, Mauro Napoletano, Andrea Roventini, Tania Treibich -- In this paper we explore the effects of alternative combinations of fiscal and monetary policies under different income distribution regimes. In particular, we aim at evaluating fiscal rules in economies subject to banking crises and deep recessions. We do so using an agent-based model populated by heterogeneous capital- and consumption-good firms, heterogeneous banks, workers/consumers, a Central Bank and a Government. We show that the model is able to reproduce a wide array of macro and micro empirical regularities, including stylised facts concerning financial dynamics and banking crises. Simulation results suggest that the most appropriate policy mix to stabilize the economy requires unconstrained counter-cyclical fiscal policies, where automatic stabilizers are free to dampen business cycles fluctuations, and a monetary policy targeting also employment. Instead, "discipline-guided" fiscal rules such as the Stability and Growth Pact or the Fiscal Compact in the Eurozone always depress the economy, without improving public finances, even when escape clauses in case of recessions are considered. Consequently, austerity policies appear to be in general self-defeating. Furthermore, we show that the negative effects of austere fiscal rules are magnified by conservative monetary policies focused on inflation stabilization only. Finally, the effects of monetary and fiscal policies become sharper as the level of income inequality increases. -- Pages in PDF File: 38 -- Keywords: agent-based model, fiscal policy, monetary policy, banking crises, income inequality, austerity policies, disequilibrium dynamics -- downloaded pdf to Note
paper  SSRN  macroeconomics  fiscal_policy  fiscal_drag  austerity  Eurozone  EU_governance  EU  equilibrium  financial_crisis  bank_runs  inequality  countercyclical_policy  agent-based_models  complexity  recessions  dynamic_attractors  complex_adaptive_systems  downloaded 
april 2015 by dunnettreader
Andy Denis - A Century of Methodological Individualism - 2010 UK History of Economic Theory Conference
Draft -- He has been writing a series looking at what he describes as reductionist vs holistic ontologies, focusing on different usages of Methodological Individualism. Reductionists include Malthus (later writings), Ricardo, utilitarians, early marginalists, Menger (the "grand-daddy" though he didn't use the term), Schumpeter (who introduces the term in 1908), Mises, Friedman and Lucas et al. Holistic includes Smith, Keynes and Hayek. The full-blown reductionists make the heroic (but usually inexplicit) assumption that when each individual acts in his own interests ("properly understood" adds Mises) maximizing his own utility, that since society is nothing but the sum of individuals, the aggregate *social interests* will be maximized. Those who take a holistic view can't employ this sleight of hand, so they need another mechanism at the society level operating to ensure unintended consequences will be socially beneficial (Smith's invisible_hand, Hayek's evolutionary selection) Or their Keynes, facing the fact that there's no mechanism that ensures socially beneficial outcomes from the actions of self-interested individuals. Interesting bibliography as well as textual analysis. Note that Schumpeter embraces an atomistic version of MI for "pure theory" of economics, but following Weber would assign to other social sciences the links between individual behavior and social structures.
Scribd  social_theory  ontology-social  equilibrium  intellectual_history  18thC  19thC  20thC  Smith  Malthus  Ricardo  Menger  Austrian_economics  Schumpeter  Mises  Hayek  Friedman_Milton  Keynes  Weber  Marxist-analytical  individualism-methodology  emergence  bibliography 
april 2015 by dunnettreader
Thornton, Mark. "Cantillon on the Cause of the Business Cycle." - Quarterly Journal of Austrian Economics (2006) | Mises Institute
Thornton, Mark. "Cantillon on the Cause of the Business Cycle." The Quarterly Journal of Austrian Economics 9, No. 3 (Fall 2006): 45–60. -- Richard Cantillon was the first economist to successfully examine the cyclical nature of the capitalist economy. He lived at a time (168?–1734) when the institutions of the modern capitalist economy were first fully and widely established and the first major business cycles occurred. In contrast to the Mercantilists, Cantillon was an astute observer who developed a clear economic understanding of money, banking, international trade, and stock markets because this is where he risked his capital and earned his fortune. He modeled the economy as an interconnected whole and developed what we now know as the circular-flow model of the economy and the price-specie-flow mechanism of international money movements. He discovered that markets were regulated by the movements of prices based on supply and demand and identified equilibrating tendencies with market exchange. -- downloaded pdf to Note
article  intellectual_history  18thC  France  Cantillon  political_economy  economic_theory  economic_culture  business_cycles  mercantilism  speculative_finance  capital_markets  capital_flows  banking  money  money_market  systems_theory  FX  gold_standard  trade_finance  trade_deficits  trade-policy  prices  equilibrium  downloaded 
february 2015 by dunnettreader
Thornton, Mark. "Cantillon and the Invisible Hand." - Quarterly Journal of Austrian Economics (2009) | Mises Institute
The Quarterly Journal of Austrian Economics 12, No. 2 (2009) 27–46. -- from the blurb, looks like he thinks Adam Smith was using the metaphor in a theoretically significant sense which theorists should take seriously -- downloaded pdf to Note
article  intellectual_history  18thC  France  Cantillon  Scottish_Enlightenment  Smith  invisible_hand  economic_history  economic_theory  political_economy  social_order  equilibrium  prices 
february 2015 by dunnettreader
Paul A. Lewis, review essay - Varieties of Emergence: Minds, Markets and Novelty (STUDIES IN EMERGENT ORDER, VOL 4 (2011): 170-192) :: SSRN
King's College London - Department of Political Economy -- This paper is an essay review of Richard Wagner's book, 'Mind, Society and Human Action'. It focuses on the ontological presuppositions of Wagner's account of of the social world (that is, on what Wanger's account presupposes about the nature of social reality). Issue discussed include the following: the nature of emergence and emergent properties; spontaneous order, and the shortcomings of Walrasian general equilibrium theory in modelling it; the significance of the impact of social interaction on peolpe's preferences and dispositions; and the role of novelty and innovation in Wagner's account of the market process. -- Number of Pages in PDF File: 23 -- Keywords: Emergence, complexity, Austrian Economics, ontology, spontaneous order, novelty -- downloaded pdf to Note
article  review  SSRN  philosophy_of_social_science  social_theory  ontology-social  mind  social_order  social_process  preferences  emergence  equilibrium  heterodox_economics  Innovation  complexity  economic_models  utility  behavioral_economics  markets-psychology  markets  methodology  methodology-qualitative  downloaded  EF-add 
february 2015 by dunnettreader
Paul A. Lewis - The Emergence of 'Emergence' in the Work of F.A. Hayek: An Historical Analysis (revised Jan 2015) :: SSRN
King's College London - Department of Political Economy -- presented at Cambridge Realist Workshop -- This paper addresses a puzzle in the history of economic thought. The puzzle is simply stated: Hayek’s analysis of the mind arguably relies heavily on the philosophical notions of emergence and emergent properties. However, Hayek invokes the philosophical notion of emergence explicitly only once, and then relatively late in his career (in his 1964 paper on ‘The Theory of Complex Phenomena’.) The question arises, therefore, of where lie the origins of Hayek’s use of the notions of emergence and emergent properties. This paper attempts to solve this puzzle by examining the history of Hayek’s use of the concept of emergence, implicit or otherwise, and attempting to identify the sources through which notions of ‘emergence’ and ‘emergent properties’ entered his thought in general and, in particular, his theoretical psychology. -- Number of Pages in PDF File: 46 -- Keywords: Hayek, emergence, emergent properties, theoretical psychology -- downloaded pdf to Note
paper  SSRN  intellectual_history  20thC  Hayek  Austrian_economics  economic_theory  social_theory  ontology-social  equilibrium  social_order  social_process  emergence  complex_adaptive_systems  coordination  markets-psychology  mind  psychology  downloaded  EF-add 
february 2015 by dunnettreader
Paul A. Lewis and Peter Lewin, review essay - Orders, Orders, Everywhere … on Hayek's "The Market and Other Orders" (revised Jan 2015) :: SSRN
Paul A. Lewis, King's College London - Department of Political Economy -- Peter Lewin, University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics -- This paper is a review essay of the latest volume of The Collected Works of F.A. Hayek, entitled 'The Market and other Orders.' The paper examines the development of Hayeks' ideas about order, as manifested in the essays collected in this volume. Issues examined include: Hayek's accounts of the market and the mind as spontaneous orders; his reliance in those accounts on the notion of emergence; his account of complex systems, in particular his vision of the world as consisting of many different, hierarchically-organised, and interacting, complex orders, of which the market is but one; his analysis of cultural evolution as occurring via a process of group selection; his preference for the notion of 'order' over that of 'equilibrium'; and the relation of his ideas on complexity to those of modern complexity theorists. -- Number of Pages in PDF File: 46 -- Keywords: Hayek, Austrian economics, spontaneous order, complexity, emergence -- downloaded pdf to Note
paper  SSRN  intellectual_history  20thC  Hayek  Austrian_economics  economic_theory  social_theory  ontology-social  equilibrium  social_order  social_process  emergence  complex_adaptive_systems  coordination  markets-psychology  preferences  economic_sociology  economic_culture  downloaded  EF-add 
february 2015 by dunnettreader
Paul A. Lewis - Hayek: From Economics as Equilibrium Analysis to Economics as Social Theory (Dec 2014 - Forthcoming in The Elgar Companion to Hayek. ) :: SSRN
King's College London - Department of Political Economy -- Forthcoming in R. Garrison and N.P. Barry (ed., 2014), The Elgar Companion to Hayek. Cheltenham: Edward Elgar. -- This paper outlines the development of Hayek's account of the working of decentralised economies, focusing in particular on his move away from using the notion of economic equilibrium towards an emphasis on the notion of 'order'. -- Number of Pages in PDF File: 24 -- Keywords: Hayek, order, equilibrium, ontology, Austrian economics. -- downloaded pdf to Note
paper  SSRN  intellectual_history  20thC  Hayek  Austrian_economics  economic_theory  social_theory  ontology-social  equilibrium  social_order  downloaded  EF-add 
february 2015 by dunnettreader
Paul A. Lewis - An Analytical Core for Sociolgy: A Complex, Hayekian Analysis (2014, Review of Behavioral Economics, Forthcoming) :: SSRN
Lewis, Paul A., An Analytical Core for Sociolgy: A Complex, Hayekian Analysis (November 11, 2014). Review of Behavioral Economics, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2522810 -- King's College London - Department of Political Economy -- This paper develops a Hayekian perspective on Herbert Gintis, and Dirk Helbing's, attempts to develop a unified analytical approach to the social sciences. Like Hayek, Gintis and Helbing view both the economy, and also the human mind, as a complex adaptive system. Their emphasis on emergence, on group selection, on the social relations that structure people’s interactions, and on the importance of motivations stemming from so-called 'social preferences', sees them develop themes present in Hayek's own work, often in ways that build on and strengthen Hayek's own analysis. However, Gintis and Helbing's continued commitment to a model of people as maximising their expected utility, and to general equilibrium theory, arguably leaves them less able than Hayek to do justice to the importance of innovation, novelty and radical uncertainty in the economic process. -- Number of Pages in PDF File: 24 -- Keywords: Gintis, complexity, evolution, emergence, Hayek, reductionism, behavioral economics, equilibrium, order, uncertainty. -- downloaded pdf to Note
paper  SSRN  social_theory  Hayek  Gintis  complexity  complex_adaptive_systems  evolution-as-model  evolution-social  evolutionary_biology  evolution  emergence  behavioral_economics  behavioralism  evolution-group_seledtion  rationality-economics  rational_choice  rationality-bounded  utility  social_order  uncertainty  reductionism  equilibrium  Innovation  economic_theory  economic_sociology  downloaded  EF-add 
february 2015 by dunnettreader
David Glaser - Franklin Fisher on the Stability(?) of General Equilibrium | Uneasy Money - October 2014
Although we routinely apply comparative-statics exercises to derive ... refutable propositions about the directional effects of a parameter change on some observable economic variable(s), ... those comparative-statics exercises are predicated on the assumption that the exercise starts from an initial position of equilibrium and that the parameter change leads, in a short period of time, to a new equilibrium. But there is no theory describing the laws of motion leading from one equilibrium to another, so the whole exercise is built on the mere assumption that a general equilibrium is sufficiently stable so that the old and the new equilibria can be usefully compared. In other words, microeconomics is predicated on macroeconomic foundations, i.e., the stability of a general equilibrium. The methodological demand for microfoundations for macroeconomics is thus a massive and transparent exercise in question begging. In his paper on the stability of general equilibrium, Fisher observes that there are four important issues to be explored by general-equilibrium theory: existence, uniqueness, optimality, and stability. Of these he considers optimality to be the most important, as it provides a justification for a capitalistic market economy. "Whether or not the actual economy is stable, we largely lack a convincing theory of why that should be so. Lacking such a theory, we do not have an adequate theory of value, and there is an important lacuna in the center of microeconomic theory. Yet economists generally behave as though this problem did not exist. Perhaps the most extreme example of this is the view of the theory of Rational Expectations that any disequilibrium disappears so fast that it can be ignored. (If the 50-dollar bill were really on the sidewalk, it would be gone already.) But this simply assumes the problem away. The pursuit of profits is a major dynamic force in the competitive economy. To only look at situations where the Invisible Hand has finished its work cannot lead to a real understanding of how that work is accomplished." -- downloaded pdf to Note
paper  macroeconomics  microfoundations  equilibrium  economic_theory  microeconomics  rational_expectations  downloaded  EF-add 
october 2014 by dunnettreader
Roy H. Grieve, ‘Right back where we started from’ | Real-World Economics Review Blog September 2014
Roy H. Grieve, “‘Right back where we started from’: from ‘the Classics’ to Keynes, and back again”, real-world economics review, issue no. 68, 21 August 2014, pp. 41-61, http://www.paecon.net/PAEReview/issue68/Grieve68.pdf -- We have indeed come round in a circle. The whole vision of the working of the macrosystem presented, in terms of the AD/AS model, by far too many contemporary textbooks, is essentially pre-Keynesian. Monetary spending may fluctuate, but whether or not such fluctuations affect employment and output is said to depend on reactions affecting real wages. Slow adjustment of money wages to price changes is held to account for cyclical variations in employment and output. With respect to the longer term, it is presumed that real wages return to their proper full-employment level. There are then no obstacles on the side of demand to prevent re-establishment of the ‘natural’ (full employment) level of activity. The pale shadow of Keynesian theory in the ADAS model – the AD curve – has nothing to do with the values of output and employment at equilibrium, only with the price level. -- downloaded pdf to Note
paper  economic_theory  economic_models  macroeconomics  neoclassical_economics  Keynes  Keynesianism  Labor_markets  wages  unemployment  prices  inflation  deflation  real_economy  economic_growth  business_cycles  equilibrium  downloaded  EF-add 
september 2014 by dunnettreader
Friedrich August von Hayek - Prize Lecture: The Pretence of Knowledge -- Nobel Prize 1974
MLA style: "Friedrich August von Hayek - Prize Lecture: The Pretence of Knowledge". Nobelprize.org. Nobel Media AB 2014. Web. 9 Aug 2014. <http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1974/hayek-lecture.html> -- uses stagflation to attack demand side theories with a hint of liquidationism -- more interesting is his take on Popper and limits to positivism and quantitative methodologies -- can theirize certain patterns and examine empirical evidence re those patterns, but can't predict quantitative outcomes -- though stresses complexity, seems to be an issue of incomplete data (by definition inaccessible since it's in the heads of masses of heterogeneous agents reacting to their own, constantly changing, limited information) rather than emergent properties and complexity dynamics
intellectual_history  20thC  post-WWII  social_sciences-post-WWII  economic_theory  markets  information-markets  Labor_markets  unemployment  inflation  economic_policy  demand  empiricism  uncertainty  epistemology  positivism  quantitative_methods  philosophy_of_science  philosophy_of_social_science  Popper  Hayek  determinism  emergence  equilibrium  complexity  EF-add  scientism  scientific_method  sociology_of_knowledge 
august 2014 by dunnettreader
Hayek on Prediction in the Social Sciences | Social Democracy for the 21st Century: A Post Keynesian Perspective: August 2014
Lord Keynes looking at Hayek's 1974 Nobel lecture -- If Hayek is saying here that the natural sciences could exactly predict everything about the game given enough information (including presumably the brain states of human players), then he is committed to the view that the world is completely deterministic, and that our uncertainty about it is merely epistemic and caused by the insuperable difficulties of gathering enough information for calculations. In contrast to this, Post Keynesians emphasise the ontological nature of uncertainty, and this commits them to a philosophical position quite different from that of Hayek. The notion of “spontaneous ordering forces” that bring order to markets (like Smith’s “invisible hand” metaphor) seems overrated too. “Spontaneous ordering forces” must be understood as emergent properties. That complex social and economic systems can display emergent properties that result in greater stability is not in doubt, but other emergent properties (e.g., the outcome of the paradox of thrift or distress selling in a market crash) can also be highly deleterious and destabilising. Hayek badly neglected such destabilising forces in his rhetoric about markets. -- see bookmark for html of lecture on Nobel Prize site
20thC  intellectual_history  economic_theory  macroeconomics  microeconomics  markets  information-markets  equilibrium  emergence  laisser-faire  Hayek  uncertainty  probability  determinism  Post-Keynesian  philosophy_of_science  philosophy_of_social_science  scientism  scientific_method  scientific_culture  EF-add 
august 2014 by dunnettreader
Greg Hill - "FROM HAYEK TO KEYNES: G.L.S. Shackle and Our Ignorance of the Future" - Critical Review (2004) | bepress
Greg Hill, City of Seattle -- G.L.S. Shackle stood at the historic crossroads where the economics of Hayek and Keynes collided. Shackle fused these opposing lines of thought in a macroeconomic theory that draws Keynesian conclusions from Austrian premises. In Shackle’s scheme of thought, the power to imagine alternative courses of action releases decision makers from the web of predictable causation. But the continuous stream of spontaneous and unpredictable choices that originate in the subjective and disparate orientations of individual agents denies us the possibility of rational expectations, and therewith the logical coherence of market equilibrium through time. -- Suggested Citation - Greg Hill. "FROM HAYEK TO KEYNES: G.L.S. Shackle and Our Ignorance of the Future" Critical Review (2004). Available at: http://works.bepress.com/greg_hill/5 -- downloaded pdf to Note
intellectual_history  economic_theory  macroeconomics  equilibrium  rational_expectations  decision_theory  Keynesian  Hayek  Austrian_economics  probability  uncertainty  causation-social  determinism  downloaded  EF-add 
july 2014 by dunnettreader
András Körösényi - Monopolistic Competition, Auction and Authorization. A Schumpeterian View of Leadership and the Political Market | JSTOR: Historical Social Research / Historische Sozialforschung, Vol. 37, No. 1 (139) (2012), pp. 57-72
The market analogy of democracy played a central role in one of the leading versions of democratic theory in the last fifty years, in the so-called "elite" or "competitive" theory of democracy. In the present paper, I first clarify that the dominant school of the market analogy (Downs and his followers) turned its back on the approach of the originator of the analogy, Joseph Schumpeter. Schumpeter argued that both economic and political competition -due to the activity of entrepreneurs -are necessarily monopolistic and destroy equilibrium. Second, I show how followers of the Schumpeterian market analogy improved upon it by using the concept of natural monopolies and making it conform to the characteristics of politics, while further distancing themselves from Downsian interpretation and the dominant Public Choice approach. Finally, I demonstrate a normative implication of monopolistic competition, namely its consequences for the concept of "agency loss". -- looks good re post WWII social sciences -- downloaded pdf to Note
article  jstor  social_theory  social_sciences-post-WWII  political_science  markets  competition  competition-political  parties  democracy  elites  political_culture  political_participation  monopolies  Schumpter  neoclassical_economics  public_choice  equilibrium  social_order  downloaded  EF-add 
june 2014 by dunnettreader
Roger E. A. Farmer Farewell to the natural rate: Why unemployment persists | vox , 6 January 2010
Most policymakers subscribe to the existence of a natural rate of unemployment. This column provides a visual history of unemployment, vacancies, and inflation in the US and says there is no natural rate. It suggests the economy can rest in any equilibrium on the Beveridge curve, as decided by the confidence of households and firms that pins down asset values.
paper  economic_theory  economic_models  macroeconomics  unemployment  equilibrium  Great_Recession 
june 2014 by dunnettreader
Contents | Yi-Cheng Zhang - The Structure of Information Economy [book chapter drafts]
TOC and links to chapter drafts. Zhang is at Fribourg, a physicist who uses Soros reflexivity insights as part of top level Darwinian inflected theory of NESS - non-equilibrium social sciences.
books  philosophy_of_social_science  economic_theory  evolution-as-model  evolution-social  Soros  reflexivity  information-markets  information-asymmetric  cognition  cognition-social  fallibility  Innovation  marketing  networks-social  supply_chains  equilibrium  networks-information  EF-add 
january 2014 by dunnettreader
Yi-Cheng Zhang :: Broader scopes of the reflexivity principle in the economy - Journal of Economic Methodology [Soros special issue] - Volume 20, Issue 4 -Taylor & Francis Online
pages 446-453 -- downloaded pdf to Note -- The reflexivity principle of George Soros – that man's fallible understanding can have reflexivity impacts that shape reality – challenges mainstream economics in a fundamental way. This essay will outline a research program that corroborates the reflexivity principle and extends it to broader economic issues. We shall often use examples of consumer and finance markets, but the implications go beyond these examples. The following eight sections build up our main thesis that reflexivity plays an essential role in understanding the economy. -- see bookmark for his draft book on information economy (Oxford 2014 or 2015) and the project he leads on NESS non-equilibrium social sciences
article  philosophy_of_social_science  economic_theory  evolution-as-model  evolution-social  Soros  reflexivity  information-markets  information-asymmetric  cognition  cognition-social  fallibility  Innovation  marketing  networks-social  supply_chains  equilibrium  networks-information  downloaded  EF-add 
january 2014 by dunnettreader
Anwar Shaikh : On the role of reflexivity in economic analysis - Journal of Economic Methodology [Soros special issue] - Volume 20, Issue 4 - Taylor & Francis Online
pages 439-445 -- downloaded pdf to Note -- Soros' theory of reflexivity is meant to apply to a variety of social processes. In economics, it implies that many processes will be subject to “boom-bust” patterns in which expected outcomes deviate for a considerable time from the actual path, and that the actual path in turn deviates from the underlying fundamentals. This is in sharp contrast to the reigning notions in orthodox economics. The hypothesis of Rational Expectations (RE) requires that the views of all participants will converge to a “single set correct of expectations” and the Efficient Market Hypothesis (EMH) posits that actual outcomes deviate from equilibrium in a random manner save for occasional exogenous shocks. In this paper I show that Soros' argument is similar to the classical and Keynesian notions of equilibration as a turbulent process in which actual and expected variables gravitate around some fundamental value. But Soros makes the important further contribution of emphasizing that the fundamental value itself will generally be affected, but not fully determined, by (diverse) expectations and actual outcomes. I demonstrate that Soros' theory of reflexivity can be formalized and that the resulting system is stable in in the sense that expected and actual variables will gravitate around a possibly moving fundamental value. The paper ends with a discussion of an alternate economic paradigm in which the principle of reflexivity would be central.
article  intellectual_history  19thC  20thC  economic_theory  macroeconomics  economic_models  classical_economics  Keynesianism  equilibrium  fundamentals  capital_markets  EMH  rationality-economics  rational_expectations  information-markets  reflexivity  uncertainty  financial_economics  financial_system  philosophy_of_social_science  methodology  downloaded  EF-add 
january 2014 by dunnettreader
George Soros - Fallibility, reflexivity, and the human uncertainty principle - Journal of Economic Methodology [Soros special issue] - Volume 20, Issue 4 - Taylor & Francis Online
Lead article for special issue devoted to Soros and epistemology in social sciences more broadly compared with natural sciences and Popper's version of falsibility in scientific method -- He's making progress in formalizing his theory and putting it in context of other theorists - sees his fallibility and reflexivity combination as major factor in "Knightian uncertainty" - Downloaded pdf to Note
article  philosophy_of_social_science  philosophy_of_science  epistemology  scientific_method  falsification  deduction  Popper  Soros  uncertainty  economic_theory  economic_models  financial_economics  capital_markets  FX  EMH  rationality-economics  rational_expectations  complexity  equilibrium  reflexivity  ontology-social  free_will  financial_crisis  financial_system  fallibility  downloaded  EF-add  fundamentals  methodology  cognition  agency  intentionality 
january 2014 by dunnettreader
Quote of the day #3 | Real-World Economics Review Blog
Ronald Coase asks the big question in his 1937 paper “The Nature of the Firm”:

“Within a firm, … market transactions are eliminated and in place of … exchange transactions is substituted the entrepreneur-co-ordinator who directs production. It is clear that these are alternative methods of co-ordinating production, Yet, having regard to the fact that if production is regulated by price movements, production could be carried on without any organization at all, well might we ask, why is there any organization?” . ?.....The problem is this: orthodox theory assumes that people react instantaneously, rationally, and completely to information they receive in the marketplace. This reaction takes the form of instantaneous adjustments in resource use and so on, and the vehicle transmitting the necessary information is the price structure of the political economy in question. I hope you can see how fraught this is. Not only do prices convert all the information needed for instant adjustment, but they change simultaneously to reflect said adjustment. This, to put it bluntly, requires nothing short of an immaculate and omniscient ability on the part of everyone involved.

To make this work we need to suspend our critical faculties and allow the information being acted upon to include an aspect that reflects its own refection of the information being acted upon. For everyone. All at the same time.

Don’t think about it too hard, your head will explode. Only economists are equipped to think in such contorted and unreal ways.
economic_history  economic_models  neoclassical_economics  firms-theory  equilibrium  prices  information-markets 
december 2013 by dunnettreader
Gowdy et al - Economic cosmology and the evolutionary challenge | Journal of Economic Behavior and Organization Special Issue 2013
2nd lead articl5 -- downloaded pdf to Note -- The intellectual histories of economics and evolutionary biology are closely intertwined because both subjects deal with living, complex, evolving systems. Because the subject matter is similar, contemporary evolutionary thought has much to offer to economics. In recent decades theoretical biology has progressed faster than economics in understanding phenomena like hierarchical processes, cooperative behavior, and selection processes in evolutionary change. This paper discusses three very old “cosmologies” in Western thought, how these play out in economic theory, and how evolutionary biology can help evaluate their validity and policy relevance. These cosmologies are: (1) “natural man” as a rational, self-sufficient, egotistical individual, (2) competition among individuals can lead to a well-functioning society, and (3) there exists an ideal optimal state of nature. These correspond to Colander et al. (2004) “holy trinity of orthodox economics”, rationality, greed, and equilibrium. It is argued below that current breakthroughs in evolutionary biology and neuroscience can help economics go beyond these simple cosmologies.

They equate Pope’s Essay (self love and social are the same) with Mandeville Fable of the Bees
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december 2013 by dunnettreader
Robert B. Ekelund, Jr., review - Germano Maifreda: From Oikonomia to Political Economy: Constructing Economic Knowledge from the Renaissance to the Scientific Revolution | EH.net
Ashgate, 2012. vii + 304 pp. $135 (hardcover), ISBN: 978-1-4094-3301-9.

The transition from the culturally and religiously oriented era of Oikonomia to the political economy of, say, Smith and Hume, was not linear.? Culture, science and religion evolved and helped shape conceptions of economic functioning. (It would appear that medieval Christianity was not productive of ?economy.?)? Secularism also evolved and searches for constancy in value, in exchange and in entrepreneurship were shaped by culture and psychology.? Epistemology affected the scaffolding and functioning of the economic superstructure at any point in time.?

[H]e raises intriguing links between culture, psychology, medicine, biology and economic categories. In Chapters 5 through7 (plus an epilogue), Maifreda weaves together exceptionally interesting material on the manner in which the principles of other sciences and studies used what we now call economic reasoning and motivations.? The whole question of how the idea that labor ?caused? or ?represented? or ?was involved with? value is the subject of Chapters 5 and 6.? Maifreda highlights (properly) how Locke?s analysis of private property is the ?essential element? in productive economy (p. 167).? Also examined is how labor and the concept of equilibrium are related to both theological and physiological reasoning, the concept of equilibrium prominent in the writings of Hales and Boisguilbert He concludes that ?powerful metaphors formed within diverse fields of knowledge … lent their assistance to ways of thinking about phenomena and drawing up models and generalizations? (p. 253) that, later, became an independent science of economics and economic reasoning.? One small complaint is that he does not extend his discussion into exactly how and through whom the transition was finally made (e.g., possibly Cantillon and others).? But that may be the subject for another study.
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december 2013 by dunnettreader

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