The linkages,persistence, asymmetry in the volatility,the price discovery and efficiency,and the effect of the US subprime mortgage financial crisis on the spot and the futures market’s returns: the case of India

This article examines the effects of persistence, asymmetry and the US subprime mortgage crisis on the volatility of the returns and also the price discovery, efficiency and the linkages and causality between the spot and futures volatility by using various classes of the ARCH and GARCH models, and through the Granger’s causality. We have used two indices: one for spot and the other for futures, for the daily data from 12 June 2000 to 30 September 2013 from Nifty stock indices. We have then tested for ARCH effects, and subsequently employed various models of the ARCH and GARCH conditional volatility. The GARCH(1,1) model is found to be significant, and it implies that the returns are not autocorrelated and have ‘short memory’. It supports the hypothesis of the efficiency of the markets. The negative ‘news’ has more significant effect on volatility, corroborating the ‘leverage impact’ in finance on market volatility. We have also tested the volatility spillover effects. The two methods we employed support the spillover effects and the causality is bidirectional. We also have used the dummy variable for the US subprime mortgage financial crisis and found that they are statistically significant. Indian stock market is thus integrated to the world stock markets.     

Keynes,Sraffa and the labour market ∗

The paper argues that input–output analysis existed long before it received its name and Wassily Leontief made it popular as a tool of empirical analysis and a foundation of economic policy. It grew out of an attempt to ascertain the capacity of an economic system to reproduce itself and generate a surplus that can be used for various purposes. Primitive pronouncements are encountered in early civilizations, for example Mesopotamia, in terms of the ratio of the amount of grain produced and the amount of it used up, directly and indirectly. These ideas reappeared in a more sophisticated form at the time of the inception of systematic economic analysis in the 17th and 18th centuries in Europe and found a two-sector expression in François Quesnay's Tableau économique. The material input–output structure was then considered the core of the economic system that contained one of the keys to basically all other important economic phenomena and magnitudes. The way in which the potentialities embodied in the input–output structure, conceived as a system of production, have, or have not, been exploited over time define both the problems and perspectives of contemporary input–output analysis. Three aspects will be scrutinized more closely: the problem of value added, the treatment of fixed capital and the problem of technical change. Happily enough, while the problems are huge, the prospects are encouraging. There is no fear that input–output analysts will soon have to look for new fields of research because the old ones have been exhausted.     

Leaders, self-confidence, and hubris: what's the difference?

Success can easily breed hubris. As leaders become more confident, their success can limit their learning because they develop repetitive patterns of filtering information based on past successes and discount information that does not agree with their patterns of success. It is important for leaders to stay grounded in reality and effective as their success grows. Humility, gratitude, and appreciation will avoid the overconfidence that leads to hubris. Building confidence in others is the mark of a great leader. Hubris is not.     

The Analysis and Assessment of the Creation Investment Risk in the High and New Technology, Enterprise

The creation risk investmentof the high and new technology enterprise isthe way to finance：and invest for the business period. After we putting the capital into the high and new. technology project.that is in the devetopment stage, the enterprise can, acquire high, increase, by the. support and assistance ＇of, the. capital and management. After the enterprise grew up, it can achieve high benefits by selling stock, attorning the enterprise, and dealing property rights, etc. Finally it secedes form the enterprise invested. The purpose of total analysis in the respective stage for the business investment cause including cause prosperities, object, risk, is to comprehensively understand the effect on the anticipation ratio of the benefit, investment distribution, the stock property proportion which is offered by the activity content, and the emphasis of the assessment in the respective stages of the creation risk investment cause.     

Divorce and the Birth Control Pill in the US, 1950–85

This paper explores the relationship between the advent of the birth control pill and divorce rates. Women using the pill can decide when and whether to have children and whether to maintain their attachment to the labor force. This ability may increase women's autonomy, making divorce more feasible. The pill's effects are identified through a quasi-experiment exploiting differences in the language of the Comstock anti-obscenity statutes approved in the late 1800s and early 1900s in the United States. Empirical evidence from state-level data on US divorce rates 1950 to 1985 shows that sales bans of oral contraceptives have a negative impact on divorce. These findings are robust to alternative specifications and controls for observed (such as women's labor force participation) and unobserved state-specific factors, and time-varying factors at the state level. Results suggest that the impact of women's control of hormonal contraception on their autonomy is important in divorce decisions.     

Detrimental externalities, pollution rights, and the “Coase theorem”

This paper, which builds on Chipman (The economist’s vision. Essays in modern economic perspectives, 131–162, 1998), analyzes a simple model formulated by Hurwicz (Jpn World Econ 7:49–74, 1995) of two agents—a polluter and a pollutee—and two commodities: “money” (standing for an exchangeable private good desired by both agents) and “pollution” (a public commodity desired by the polluter but undesired by the pollutee). There is also a government that issues legal rights to the two agents to emit a certain amount of pollution, which can be bought and sold with money. It is assumed that both agents act as price-takers in the market for pollution rights, so that competitive equilibrium is possible. The “Coase theorem” (so-called by Stigler (The theory of price, 1966) asserts that the equilibrium amount of pollution is independent of the allocation of pollution rights. A sufficient condition for this was (in another context) obtained by Edgeworth (Giorn Econ 2:233–245, 1891), namely that preferences of the two agents be “parallel” in the money commodity, whose marginal utility is constant. Hurwicz (Jpn World Econ 7:49–74, 1995) argued that this parallelism is also necessary. This paper, which provides an exposition of the problem, raises some questions about this result and provides an alternative necessary and sufficient condition.     

Sector-specific capital, “Bang-bang” investment,and the Filippov solution

Bang-bang investment in a two-sector growth model with immobile capital is rational and leads to a unique and globally stable long-run equilibrium along a sliding trajectory. This steady state coincides with the stationary equilibrium in the traditional model with non-sector-specific capital.This article was written while the authors were visiting scholars at Cornell University. We gratefully acknowledge financial assistance from the Erasmus University Trust Fund and the Netherlands Scientific Organization. We would like to thank, without implicating, two anonymous referees, Martijn Herrmann, Jean-Marie Viaene, Claus Weddepohl, and the participants of seminars at the University of Maryland, the University of Montreal, and Erasmus University Rotterdam for perceptive remarks and useful comments. Jeroen Hinloopen and Rien Wagenvoort provided able graphical assistance. The views expressed in this article are those of the authors and not necessarily those of the World Bank.     

Region? Why Region? Security,Hermeneutics, and the Making of the Black Sea Region

In the context of post–Cold War European integration, ‘making’ regions has become commonplace. Far from reducing the significance of regional initiatives, inflationary regional labelling draws attention to the significant role played by ‘regions’ as legitimating political vectors. Why are political projects formulated in regional terms? Critically examining the Black Sea region project, this article suggests that region-making transcends the boundary between theoretical and political praxis. Regional entrepreneurs frequently use different conceptual categories in the formulation and justification of their initiatives. In order to understand why regional forms are preferred politically, it is necessary to scrutinise closely this contextual interaction between political praxis and conceptual logic. The article maps the various concepts of region which coexist in the Black Sea region project, and discusses their relationship with four political and hermeneutical strategies that link the regional project with its context, profoundly marked by the logic of European security integration. The ‘double hermeneutics’ of the Black Sea region highlights the contradictory security logics that structure European security in general and this regional project in particular. In the conclusion, the article draws attention to the significant epistemological and normative consequences of the double hermeneutics of the Black Sea region.     

Institutionalism and the “Common Man” Through the Lens of Philip Klein: Business Cycles,the Public Sector,and Keynes’s Economics

This article reviews and assesses Philip Klein’s work on business cycles and macroeconomics, the public sector, and the economics of John Maynard Keynes. The article makes several findings. First, Klein built on the pioneering efforts of Wesley Mitchell to advance the development of cycle indicators and to outline an eclectic theory of cycles that remains useful for synthesizing a broad literature. Second, Klein’s essays on macroeconomics contain enduring discussions of the malleability of the “natural” rate of unemployment and the value of a behavioral approach to expectations. Third, he refocused the institutionalist attention on the public sector by introducing “higher efficiency” and other concepts to help explain how government policy plays a role in economic life. Fourth, Klein emphasized the role of fiscal policy in moderating business cycles. Fifth, his work points in the direction of today’s post-Keynesian institutionalism, both by stressing that Keynes was “profoundly institutionalist” in his approach and by arguing that conjoining Keynes and institutionalism would provide a stronger foundation for macroeconomic theory and policy.     

FOUR CHARACTERIZATIONS OF CONSTRAINED PARETO EFFICIENCY IN CONTINUUM ECONOMIES WITH WIDESPREAD EXTERNALITIES*

In continuum economies, widespread externalities are those over which each individual has negligible control. Nash-Walrasian equilibria with lump-sum transfers are defined, and their existence proved. They are then characterized by the property of “f-constrained Pareto efficiency” for finite coalitions. More general “private good” Nash-Walrasian equilibria are characterized as private-good constrained-Pareto efficient. Introducing complete Pigou taxes or subsidies leads to equilibria that are characterized by constrained efficiency and f-constrained efficiency for given levels of the widespread externalities. But full efficiency requires resolving the public-good problem of determining those aggregate externalities or, equivalently, of setting appropriate Pigou prices.     

Pigou on business cycles and unemployment: an anti-gold-standard view

Abstract

This note examines A. C. Pigou's views on the practical issue of high unemployment in the 1920s. In his Industrial Fluctuations, Pigou emphasized that the monetary aspect of business cycles was much more important to fluctuations in unemployment than wage adjustment. In a journal article, however, he stated that major part of the high unemployment should be attributed to the failure of money wage adjustment. I argue that, on balance, Pigou attached greater importance to monetary problems than to the wage rigidity.     

Three macroeconomic syntheses of vintage 1937: Hicks,Haberler, and Lundberg

Abstract

The 1920s and 1930s were years of intensive debate about economic dynamics and stabilisation policies. There was a large variety of explanations of cycles and depressions, and Keynes’ General Theory of Employment, Interest and Money (1936) was pitched against them. In 1937, followed three different attempts to provide synthetic expositions of macroeconomic theory that would deal with the Keynesian challenge: Hicks’ Mr. Keynes and the “Classics”, Haberler's Prosperity and Depression, and Lundberg's Studies in the Theory of Economic Expansion. This paper compares those 1937 syntheses and contrasts them with the “Neoclassical Synthesis” and the current “New Neoclassical Synthesis”.     

Whither Keynesian probability? Impolite techniques for decision-making

The critical literature on Keynes has provided extensive analysis of why individual agents may find convenient to adopt a “conventional judgement”, and what he meant by “polite techniques” used to save their faces as “rational, economic men.” This paper concentrates instead on impolite techniques of thought suited to deal with Keynesian uncertainty. The paper suggests that the thread going from Keynes's Treatise on Probability to the General Theory and its defence provides a positive analysis of decision-making under uncertainty, and that placing emphasis on this positive analysis simply means adhering to Keynes's long-standing commitment to a (surely peculiar) probabilistic set-up.     

Adding links,adding persons,and adding structures: Using Sen's frameworks

Abstract

This essay is a comment on “Sen on Freedom and Gender Justice,” by Mozaffar Qizilbash, which appeared in Feminist Economics Volume 11, Number 3, November 2005.

Building on the 2003 double special issue of Feminist Economics entitled “Amartya Sen's Work and Ideas,” this paper responds to the review essay by Mozaffar Qizilbash. It identifies and illustrates various possible evaluations of a theoretical system, including that it has acknowledged strengths, unrecognized strengths, remediable gaps or failings, or structural faults. The paper then looks at Sen's system as a theoretical basis for “human development”– in particular in relation to personhood, emotions, and psychological interdependence – and argues that it points in directions required for economic and social analysis, including towards theories of care, but is not itself a sufficient treatment. The paper suggests deepening Sen's system by connecting to other important languages of analysis concerning the structuring of attitudes, emotions, felt well-being, public reasoning, and politics.     

Unequal Chances: Family Background and Economic Success

Abstract

This essay is a comment on“The Citation Impact of Feminist Economics”by Frances Woolley, which appeared in Feminist Economics, Vol. 11, No. 3, November 2005.

This contribution comments on Frances Woolley's recent Feminist Economics article, “The Citation Impact of Feminist Economics.” It points to two avenues through which Woolley's article could have better illuminated the extent of Feminist Economics' scholarly relationship with the communities of both heterodox and mainstream economists: first, she omits several important heterodox economic journals in her study, and second, she could have offered a more critical evaluation of mainstream journals and economists relative to Feminist Economics and feminist economists. This paper uses citation data drawn from ten heterodox and ten mainstream journals to identify and build on these gaps.     

The Fault Line between Keynes and the Cambridge Keynesians: A Review Essay

This essay reviews Michael Ambrosi's important but neglected book on the formative period of Keynesian economics. The book traces the evolution of a Cambridge macroeconomic tradition running from Marshall and Pigou to Keynes, and interprets The General Theory as a response to Pigou's analysis of unemployment. Ambrosi also argues that Keynes's disciples, Richard Kahn, Nicholas Kaldor and Joan Robinson, were, in the 1930s, wedded to a Pigovian methodology and did not immediately recognise that Keynes had redefined the meaning of equilibrium in The General Theory. Keynes's attempt to redefine the analytical basis of neoclassical economics was thwarted, not merely by the neoclassical synthesis, but by those who claimed to be the inheritors and guardians of his vision.     

Guy Routh's Heterodox Critique of Economic Methodology

Guy Routh was an outstandingly incisive and severe critic of mainstream economic theory's abstraction, class bias, and empirical irrelevance. Routh's The Origin of Economic Ideas (1975 1989), with such chapter titles as “The Preposterous Origins” and “From Propaganda to Dogma”, was described by Robert Heilbroner as “irreverent, original, controversial, and delightful” while J. K. Galbraith expressed his “utmost enjoyment” and “utmost approval” of the book. Routh's trenchant critique of mainstream theorizing and his vision of an empirically-grounded alternative have been largely forgotten since his death in 1993, but deserve the attention of heterodox and especially of institutionalist and social economists.     

“From warfare to welfare”: Contextualising Arrow and Schelling's models of racial inequalities (1968–1972)*

ABSTRACT

This paper focuses on Arrow and Schelling's contributions to the study of racial inequality in the late 1960s. We start from the authors’ account of the origin of their work. Then, we locate the “material origin” of the models at the RAND Corporation in the late 1960s and show how it relates to the transfer of the RAND tool-box to the study of welfare issues. Finally, we describe how Arrow's and Schelling's modelling strategies relate to their conception of “science for action,” inherited from their “warfare” work.     

Nicolas Baudeau,an anti-physiocrat? Éphémérides du citoyen prior to “conversion” (1765–1766)

Abstract

Éphémérides du citoyen is often considered to be an anti-physiocratic periodical, up until Baudeau's adherence to Quesnay's theories in 1766. An analysis of the journal's main economic themes between 1765 and 1766 however shows that this interpretation is inaccurate. It is true that the theme of rurality, the issue of the colonies and Baudeau's needs analyses indicate an original line of thinking, in which the public powers played the role of primary investor via a “land clearing company” or a “threefold royal messengers service”. However, these contain no radical opposition to the liberal ideas developed by Quesnay.