Institutions and ‘Science’: The Contest about Pluralism in Economics in France

ABSTRACT

For a long time, France was a country in which various approaches to economics coexisted. This pluralism began to dwindle in the mid-1990s. Since then, France has witnessed the increasing and now overwhelming domination of mainstream economics. This article, drawing on a study of the evolution of the recruitment of professors of economics in France, documents the situation and links the observed trends to the changing institutions governing the discipline (a centralized system evolving under the influence of international norms and instruments). It is demonstrated that far from being fair and neutral devices, the rules and instruments governing economics—notably the ranking lists of economic journals—incorporate specific worldviews strongly biasing the assessment of research toward the mainstream. This article documents the tentative use of ‘voice and exit’ by the French Association of Political Economy to reform the economics discipline. Furthermore, it discusses the arguments proclaimed by Jean Tirole to prevent the French Ministry of Higher Education from creating a new university section called ‘Economy and Society’ to reinstate pluralism: they fall back on a monistic view of science that is questioned notably by developments—both factual and conceptual—in science studies and epistemology.     

Tableau Économique: Teaching Economics with a Tablet Computer

Results of a survey on the usefulness of economic concepts is provided. Graduates of a management of technology program are shown to judge microeconomics to be more useful than macroeconomics.     

Duplication, Growth and ‘Total Return Economics’

Maintenance consumption is an expense recovered in product prices, yet also a source of taste satisfaction which must be exhausted, rather than reinvested, from the capital affording it. This riddle is solved in the duplication rules: the cost of maintenance consumption is recovered in pay and prices, but an equal flow is exhausted from the human capital of the worker earning the pay. The rules impact tradition in several ways. If output is defined in principle as value added, then it cannot also be described as consumption plus net investment without double-counting the maintenance consumption recovered in prices. Also rate of return in the stationary state is not zero, but is the rate sufficient to offset the exhaustion of individual human capital. The rules lead to new insights into economic return, and support an argument that all growth at the scale of closure is due to productivity gain rather than to thrift.     

Following Zahka: Using Nobel Prize Winners’ Speeches and Ideas to Teach Economics

Over 20 years ago, the late William Zahka (1990, 1998) outlined how the acceptance speeches of those who received the Nobel Memorial Prize in Economic Science could be used to teach undergraduates. This article updates and expands Zahka's work, identifying some of the issues discussed by recent Nobel Laureates, classifying their speeches by topic and level of difficulty, and providing some examples of how their work could be integrated into undergraduate courses. Particular examples illustrate how the material might be used in introductory and later courses, and the Laureates’ insights on research are discussed.     

Communication in dynastic repeated games: ‘Whitewashes’ and ‘coverups’

Summary. We ask whether communication can directly substitute for memory in dynastic repeated games in which short lived individuals care about the utility of their offspring who replace them in an infinitely repeated game. Each individual is unable to observe what happens before his entry in the game. Past information is therefore conveyed from one cohort to the next by means of communication.When communication is costless and messages are sent simultaneously, communication mechanisms or protocols exist that sustain the same set of equilibrium payoffs as in the standard repeated game. When communication is costless but sequential, the incentives to whitewash the unobservable past history of play become pervasive. These incentives to whitewash can only be countered if some player serves as a neutral historian who verifies the truthfulness of others reports while remaining indifferent in the process. By contrast, when communication is sequential and (lexicographically) costly, all protocols admit only equilibria that sustain stage Nash equilibrium payoffs.We also analyze a centralized communication protocol in which history leaves a footprint that can only hidden by the current cohort by a unanimous coverup. We show that in this case the set of payoffs that are sustainable in equilibrium coincides with the weakly renegotiation proof payoffs of the standard repeated game.Received: 30 September 2002, Revised: 5 August 2003, JEL Classification Numbers: C72, C73, D82.We wish to thank an Associate Editor and Dino Gerardi as well as seminar participants at Arizona State, Columbia, Duke, Georgetown, Indiana, Montreal, Princeton, Rochester, Vanderbilt, VPI, the 2001 NSF/NBER Decentralization Conference, the Summer 2001 North American Econometric Society Meetings, and the Midwest Theory Conference, 2000, for useful comments and suggestions. All errors are our own.     

A ‘Big Think’ Approach to Government Debt: Promoting Significant Learning in Introductory Macroeconomics

Drawing on Dee Fink's theory of significant learning, the authors present a ‘big think’ learning module to supplement fiscal policy discussions in introductory macroeconomics courses. Students are asked to consider a salient, contentious question that can be addressed in meaningful ways based on principles-level concepts and models, namely: ‘In your judgment, does the recent steep rise in the US debt-to-GDP ratio pose a serious threat to the US economy? Why or why not?’ To enhance students' willingness and ability to engage this big think question, the module provides open-ended preparatory exercises amenable to courses taught from heterodox or mainstream perspectives. Unlike standard textbook treatments which inadvertently thwart exploratory thinking and provide little support for analyzing case-specific burdens and benefits of government borrowing, the big think unit motivates students to think logically and creatively about the debt–GDP relationship in the current US context.     

When Galbraith Frightened Conservatives: Power in Economics,Economists’ Power,and Scientificity

In this article, I first expound John Kenneth Galbraith’s general theory of power. Galbraith always took into account phenomena of power in economics, and shed light on the power of economists in particular. I then show how the reaction of conservatives to the broadcasting of the Age of Uncertainty highlights the relevance of Galbraith’s theory. Letters exchanged by conservative Lords in an effort to fight against Galbraith’s ideas paradoxically illustrate his theory. This leads to questions about the status of economists, popularizers, and experts. Finally, I argue that convictions have a crucial role in scientific production, and that Robert Solow’s distinction between the “serious scholars” and the proselyte economist is irrelevant because of its incapacity to understand how economists produce knowledge.     

Sectoral Changes in Employment: An eclectic perspective on ‘good’ jobs and ‘poor’ jobs

The linkage Keynes established between the volume of employment that business firms require to make a particular number of jobs available provides an operational perspective about the way in which labor markets work. The aggregate supply or Z function is, in fact, a job offer curve. The most significant insight to derive from this curve is that job offers are inseparable from the economy's aggregate expenditure (or demand) level. This interdependency of aggregate supply and aggregate demand is necessary to understand the functioning of labor markets in the real world. This paper argues that a disaggregated model which encapsulates the economy's price-taking and price-making sectors offers a promising analytical tool to gain perspective about ‘good jobs’ and ‘poor jobs’ in post-Fordist economies. It is maintained that the sectoral deployment of workers reflects whether employing firms, as price-makers, can capture the increasing returns inherent in modern technology.     

Protecting Ecosystems and Alleviating Poverty with Parks and Reserves: ‘Win-Win’ or Tradeoffs?

National parks and reserves are globally popular approaches to protecting biodiversity and the supply of ecosystem services. Because these protected areas limit agricultural development and exploitation of natural resources, they are frequently opposed in developing nations where reducing poverty is an important social objective. Conservation advocates argue that protected areas can alleviate poverty by supplying ecosystem services, promoting tourism and improving infrastructure. Thus ‘win-win’ scenarios may be possible in which ecosystems and their services are protected and poverty is alleviated. Previous studies (Andam et al. in Proc Natl Acad Sci USA 105(42):16089–16094 2008; 2010) suggest that Costa Rica’s protected area system reduced deforestation and alleviated poverty. We demonstrate that these environmental and social impacts were spatially heterogeneous. Importantly, the characteristics associated with the most avoided deforestation are the characteristics associated with the least poverty alleviation. In other words, the same characteristics that limited the conservation effectiveness of protected areas may have improved the social welfare impacts of these areas. These results suggest that ‘win-win’ efforts to protect ecosystems and alleviate poverty may be possible when policymakers are satisfied with low levels of each outcome, but tradeoffs exist when more of either outcome is desired.     

Assessing economic convergence in the EU: is there a perspective for the ‘cohesion countries’?

This article analyses the stochastic income convergence within the EU-15. The empirical analysis uses per capita GDP, in PPP and in constant prices of 2005 for the period 1950 to 2010. Apart from the traditional DF type tests we also account for possible structural changes. In this direction, we employ the Zivot-Andrews (1992) and the Lee-Strazicich (1999, 2003) testing procedures, for one and two breaks, endogenously determined. Furthermore, we apply the Carlino and Mills (1993) methodology proposed for the detection of β-convergence. The overall evidence supports the existence of two discrete clubs, the first by the ‘cohesion countries’ (Portugal, Ireland, Greece and Spain) and the second by the remaining members. In particular, there is a clear evidence of convergence within each club, whereas between clubs there is a luck of catching-up effects. Furthermore, investigation of correlation between relative per capita GDP of each country and several factors that are often identified as growth stimulants, namely Total Factor Productivity, FDI, investment and openness confirm, with the exception of Greece, a strong association between these factors and the convergence process. However, progress in the convergence has not been uniform across countries and over time, reflecting the specific interactions between domestic and international factors and their impact on the convergence process of individual countries.     

Reproduction and scarcity: the population mechanism in classicism in the ‘Jevonian revolution’

We argue that the shift from classicism to neoclassicism in nineteenth-century Britain can be seen as a change from a reproductive environment with internal scarcity, as in Malthus's population mechanism, towards a non-reproductive environment with external scarcity, as in Jevon's theoretical and applied economic work. We reconsider Jevon's use of seemingly classical concepts as well as the role of the population mechanism in Jevons's works.     

‘Expressive’ obligations in public good games: Crowding-in and crowding-out effects

We study individual contributions in a repeated linear public good experiment in which, in each period, subjects are required to contribute a minimum amount and face a certain probability of being audited. Audited subjects who contribute less than the required amount are convicted to pay the difference between the obligation and the voluntary contribution. We investigate the ‘expressive’ force of the obligations. While at early stages subjects contribute the minimum level, with repetition contributions decline below the required amount. We observe that expressive obligations exert a rather robust crowding-out effect on voluntary contributions as compared to a linear public good game. Crowding-out is stronger when payments collected through the auditing procedure are distributed to subjects rather than when they are a deadweight loss.     

Inflationary expectations with heterogeneous information: ‘generational expectations’

This paper proposes a modified theory of expectation formation. The hypothesis of generational expectations (GE), unlike the widely accepted hypothesis of rational expectations, assumes that agents from their inflationary expectations using the most economical information set – their personal experience with inflation. The GE hypothesis incorporates the realistic assumptions of heterogenous information sets and bounded rationality. Several alternative expectational hypotheses are compared in terms of properties of inflation forecasts and estimates of a version of natural-rate aggregate supply functions and age-group-specific Phillips curves. It is shown that GE performs just as well or even better than other methods.     

Sympathy and its discontents: ‘Greatest happiness’ versus the ‘general good’

The paper explicates the utilitarian principle of sympathy in terms of the shape of what has been called the ‘sympathetic gradient’, which determines the allocation of goods to those close by and afar. It examines challenges to the utilitarian impartial weighting scheme that emerged in the literary community, and from evolutionary biology. As sympathy came to be seen as an impediment to evolutionary perfection, voices urged that sympathy be suppressed. Darwin's Descent of Man explicitly countenanced the suppression of sympathy in a trade-off of happiness for the perfection of the race. A post-Darwinian argument concerning a different capacity for pleasure accompanied the demise of sympathy in utilitarian economic analysis. Utilitarians then moved from the early presumption of ‘everyone to count for one’ to counting ‘every equal increment of pleasure’ equally.     

Assessing students’ equality of opportunity in OECD countries: the role of national- and school-level policies

This article analyses the relationship between equality of opportunity and the characteristics of the educational system, jointly considering country- and school-level policies. Because school social environment represents a fundamental channel in shaping educational opportunities, we consider all policies, recorded in PISA 2012 dataset, that affect the sorting of students to schools. We show that including sorting policies enriches the explanation of the socio-economic gradient, that is, the association between students’ performances and parental background, with respect to previous studies including only country-level features. The negative impact of early tracking on equality of opportunity is overvalued without including other sorting policies, while grouping students’ within-school by ability increases the socio-economic gradient and a greater students’ heterogeneity in the school reduces the gradient.     

Using ‘big data’ to validate claims made in the pharmaceutical approval process

Abstract

Big Data in the healthcare setting refers to the storage, assimilation, and analysis of large quantities of information regarding patient care. These data can be collected and stored in a wide variety of ways including electronic medical records collected at the patient bedside, or through medical records that are coded and passed to insurance companies for reimbursement. When these data are processed it is possible to validate claims as a part of the regulatory review process regarding the anticipated performance of medications and devices. In order to analyze properly claims by manufacturers and others, there is a need to express claims in terms that are testable in a timeframe that is useful and meaningful to formulary committees. Claims for the comparative benefits and costs, including budget impact, of products and devices need to be expressed in measurable terms, ideally in the context of submission or validation protocols. Claims should be either consistent with accessible Big Data or able to support observational studies where Big Data identifies target populations. Protocols should identify, in disaggregated terms, key variables that would lead to direct or proxy validation. Once these variables are identified, Big Data can be used to query massive quantities of data in the validation process. Research can be passive or active in nature. Passive, where the data are collected retrospectively; active where the researcher is prospectively looking for indicators of co-morbid conditions, side-effects or adverse events, testing these indicators to determine if claims are within desired ranges set forth by the manufacturer. Additionally, Big Data can be used to assess the effectiveness of therapy through health insurance records. This, for example, could indicate that disease or co-morbid conditions cease to be treated. Understanding the basic strengths and weaknesses of Big Data in the claim validation process provides a glimpse of the value that this research can provide to industry. Big Data can support a research agenda that focuses on the process of claims validation to support formulary submissions as well as inputs to ongoing disease area and therapeutic class reviews.