Capitalist spirits and connection to place

In this paper I examine the connections between an animating capitalist spirit as articulated by Virgil Storr in Understanding the Culture of Markets and the physical places in which those animating spirits are generated, reinforced, and sometimes intentionally cultivated.     

Survival of the hippest: life at the top of the hot 100

We analyse the survival characteristics of recordings that reached the number one spot on the US popular music charts over the period 1955 to 2003. Our results show that there has been a statistically significant change in the time spent at number one since ‘album cuts’ were included in the compilation of Billboard?'s Hot 100. Survival time is significantly improved if the recording is by a female solo artist, or if it is an instrumental tune. We also find a significant ‘Elvis effect’.

‘I’ll never be a saint, it's true. I’m too busy surviving!’ (Madonna, 1994 Madonna. 1994. “Survival”. In Bedtime Stories Album, Hollywood, CA: Warner Brothers Records.  [Google Scholar])     

Evolutionary economics and the case for a constitutional libertarian paternalism—a comment on Martin Binder, “should evolutionary economists embrace libertarian paternalism?”

In his article “Should evolutionary economists embrace libertarian paternalism?”(Journal of Evolutionary Economics 24(3), 2014, 515–539) Martin Binder discusses the pros and cons of “libertarian paternalism” (LP) from an explicitly evolutionary viewpoint, concluding that as a general rule, evolutionary economists should be cautious regarding this new and highly influential policy approach. In this comment I argue that Binder starts from an incomplete model of the institutional status quo and neglects an obvious alternative to the standard variant of LP, namely, a constitutionally constrained LP. Most of Binder’s objections do not apply with equal force to such a refined variant of LP.     

The Vested Interests and the Evolving Moral Economy of the Common People

The British historian Edward P. Thompson ([1971, 1991] 1993 Thompson, Edward P. “The Moral Economy Reviewed.” In Customs in Common, by Edward P. Thompson, pp. 259-351. New York, NY: Penguin Books, [1991] 1993. [Google Scholar]) developed the concept of “moral economy” to analyze the food riot in eighteenthcentury England. I aim to elaborate on the concept of moral economy of the common people by combining Thompson’s insights with those developed by Veblenian institutional economists. I highlight the commonalities between Thompsonian history and Veblenian economics in terms of both questions addressed and methodological principles endorsed. Finally, I emphasize the complementarities between these two bodies of work, and suggest some ways to exploit them in order to better understand the evolution of the moral economy of the common people over time.     

Keynes vs. the Post Keynesians on the Principle of Effective Demand *

Abstract

The American Post Keynesians – those who attach importance to the capital ‘P’ and the absence of a hyphen between ‘post’ and ‘Keynesian’– claim to be Keynes' most literal interpreters or the ‘truest’ Keynesians (Holt et al. 1998 Holt, R. P.F., Rosser, J. B. Jr. and Wray, L. R. 1998. Paul Davidson's Economics Jerome Levy Economics Institute Working Paper no. 251. Blithewood, NY (www.levy.org) [Google Scholar]: 17). This paper compares the Post Keynesian interpretation of the Principle of Effective Demand, i.e. the D/Z-model, with Keynes' own presentation in chapter 3 of the General Theory– and finds substantial differences. A re-interpretation of the D/Z-model is offered that would bring it into line with chapter 3.     

Industry innovativeness,firm size,and entrepreneurship: Schumpeter Mark III?

Emphasizing the dynamics in economies and industries, Schumpeter points to entrepreneurs carrying out ‘new combinations’. His work, and in particular the Theory of Economic Development, is often interpreted as praising individual entrepreneurs setting up new firms to contribute to an industry’s innovativeness. This has come to be referred to as the Schumpeter Mark I perspective. Later, however, in his Capitalism, Socialism, and Democracy, Schumpeter has rather suggested that large incumbents are best positioned to contribute to an industry’s innovativeness (Schumpeter Mark II). In this discussion, however, the possibly different effects of structural as opposed to dynamic industry competitiveness is often not taken into account. In addition, the contribution of new and small firms to industry innovativeness are often conflated. Using New Product Announcements as a measure of innovation, we find that industries dominated by small firms prove consistently and significantly more innovative than industries where large firms dominate. Taking account of industries’ structural and dynamic levels of competition, we find that high existing and increasing levels of new firms entering an industry, exercising what Schumpeter called the ‘entrepreneurial function’, actually decrease industry innovativeness. We conclude that the contribution of small firms in terms of industry innovativeness is different from that of large as well as new firms, suggesting a Schumpeter Mark III perspective.     

Taking,giving, and impure altruism in dictator games

We show that, if giving is equivalent to not taking, impure altruism could account for List’s (in Journal of Political Economy 115(3):482–493, 2007) finding that the payoff to recipients in a dictator game decreases when the dictator has the option to take. We examine behavior in dictator games with different taking options but equivalent final payoff possibilities. We find that recipients tend to earn more as the amount the dictator must take to achieve a given final payoff increases, a result consistent with the hypothesis that the cold prickle of taking is stronger than the warm glow of giving. We conclude that not taking is not equivalent to giving and agree with List (in Journal of Political Economy 115(3):482–493, 2007) that the current social preference models fail to rationalize the observed data.     

The accuracy of OECD forecasts

This paper examines the accuracy and properties of forecasts by the OECD for 24 countries and 8 variables. First the forecasts made in December of yeart?1 for yeart are examined, with the largest errors being for investment, industrial production and foreign balance. Next the way forecasts are revised between December and July is considered. Systematic revisions occur for Iceland, Turkey and Luxembourg. Finally the accuracy of forecasts made before, during and after the 1979 oil price rises are compared, and no evidence of a worsening of accuracy is found.     

A research agenda for disaster entrepreneurship

This paper addresses questions raised by Storr, Haeffele-Balch and Grube in their book Community Revival in the Wake of Disaster: Lessons in Local Entrepreneurship (2015). I review the reasons why the book is timely, especially the rising number and costs of disasters globally and the shifting norms on the role of government in disaster management. Social capital serves as a critical engine for resilience to crisis, and I move to demonstrate its importance in the mitigation and recovery stages. Then, I raise a research agenda based on their writings, focusing on building quantitative evidence to match the qualitative data already gathered by the authors. Specifically, I focus on testing claims about the definition and density of entrepreneurs, the role of polycentricity, and the public policy pools that would build entrepreneurial talent in vulnerable communities.     

On estimation of almost ideal demand system using moving blocks bootstrap and pairs bootstrap methods

This paper applies a bootstrap method to the Almost Ideal Demand System (AIDS) proposed by Deaton and Muellbauer (Am Econ Rev 70:312–326, 1980), where the moving blocks bootstrap (MBB) and pairs bootstrap (PB) methods are adopted taking into account serially correlated error terms and limited dependent variables (note that the dependent variables in the AIDS model lie on the interval between zero and one). We aim to obtain the empirical distribution of the expenditure and price elasticities. Note that, the expenditure and price elasticities are obtained using the parameter estimates included in the AIDS model. In the past, a few studies report both the elasticity estimates and their standard errors obtained from the Delta method, but most of studies show only the elasticity estimates (i.e., statistical tests have not been done in most of the past studies). Applying MBB and PB methods to the AIDS model and using Japanese monthly household expenditure data from January, 1975 to December, 2012, we show in this paper that a few elasticities are statistically insignificant. We also compare the standard errors based on the bootstrap method with those based on the Delta method. We obtain the results that the differences between the Delta method and the bootstrap method are not negligible. In addition, the validity of the linear approximated AIDS (LA–AIDS) model which is commonly used in empirical studies is examined. In consequence, we find that the LA–AIDS model shows a poor performance, compared with the AIDS model, because the LA–AIDS model yields inconsistency on the elasticity estimates.     

Does Mandating Nondiscrimination in Hiring Practices Influence Women's Employment? Evidence Using Firm-Level Data

This study explores the relationship between mandating a nondiscrimination clause in hiring practices along gender lines and the employment of women versus men in fifty-eight developing countries. Using data from the World Bank's Enterprise Surveys (2006–10 World Bank. 2006–10. “Enterprise Surveys.” www.enterprisesurveys.org. [Google Scholar]), the study finds a strong positive relationship between the nondiscrimination clause and women's relative to men's employment. The relationship is robust to a large number of controls at the firm and country level. Results also show sharp heterogeneity in the relationship between the nondiscrimination clause and women's versus men's employment, with the relationship being much bigger in richer countries and in countries with more women in the population as well as among relatively smaller firms.     

Labour values and energy values: some developments on the common substance of value since 1867

Abstract

Marx’s Das Kapital (1867) singled out labour as the common substance of value in all commodities. Costanza (1980 Costanza, Robert. 1980. “Embodied Energy and Economic Valuation.” Science 210 (4475): 1219–1224. doi:10.1126/science.210.4475.1219[Crossref], [PubMed], [Web of Science ®] , [Google Scholar]) in Science chose energy and propagated energy values (a century after Engels criticised Podolinsky on energy). Mainstream economists quickly questioned Marx’s logic. Pareto advocated simultaneous equations, unaware of their use by Mühlpfordt and Dmitriev. Contributions by Charasoff and Potron were also overlooked. Already in 1927, Leontief and Sraffa knew how to replace labour values by other commodity values. Generalising Sraffa’s subsystems and using “percentage formulas” for price-value deviations, I discuss some empirical results for labour or energy theories of value.     

On the spatial representation of preference profiles

Given a set of alternatives with multiple attributes, I characterize the set of preference profiles that are representable by weighted versions of a class of utility functions indexed by a parameter δ > 0, where δ ≥ 1 corresponds to the set of Minkowski’s (1886) metric functions. In light of the starkly different consequences between representability with δ ≤ 1 or with δ > 1, I propose a test to empirically estimate δ and I discuss the theoretical and empirical implications for spatial models of political competition.     

A note concerning the proposed emasculation of the legal services corporation

In its frenzy to dismantle the New Deal and Great Society programs of past progressive administrations, the Reagan administration has taken a special interest in the emasculation of the Legal Services Corporation. This should come as no great surprise.Then Governor Reagan and thethen Legal Services Program became immediate adversaries at the time of the program's inception. The purpose in this paper is to examine the pending emasculation of this instrumentality of legal reform in the context of structural changes elsewhere in the American legal profession.     

Another look at the spending response to the 2001 income tax rebates

This article revisits the spending response to the 2001 US tax rebates by focussing on two key aspects of how tax policy researchers use the Consumer Expenditure Survey (CEX). These two attributes, which are often overlooked, are as follows: the measures used for consumption and the ‘outlier’ criteria applied to the data. First, I reproduce the results in Johnson et al. (2006 Johnson, DS, Parker, JA and Souleles, NS. 2006. Household expenditure and the income tax rebates of 2001. American Economic Review, 96: 1589–610. [Crossref], [Web of Science ®] , [Google Scholar]), which (using the CEX) concluded that households immediately spent 20–40% of their rebates on nondurable consumption goods. Then, I show how making two changes – both of which are relied upon in the literature – affects their results. These adjustments reduce the estimated magnitude of the rebate's impact by as much as 100%.     

China's interest in a revaluation of the yuan 1

This paper aims to illustrate how an equilibrium exchange rate of the Yuan would contribute to China's achievement of non-inflationary full employment – defined as internal balance by James Meade in 1951 Meade, James E. 1951. The theory of international economic policy, Vol I: The balance of payments, London: Oxford University Press.  [Google Scholar], as well as the balance of international payments. In terms of Meade's model, China currently has both excess demand and a payments surplus, so that it would benefit from revaluation, which helps curb internal inflation and the external foreign surplus simultaneously. For China, specifically, revaluation would support combating price increases and facilitate a shift of resources into consumption and raising living standards. The paper also examines three common reasons advanced by groups in favor of avoiding appreciation of the RMB, finding none of them theoretically or empirically convincing. The pursuit of both growth/employment and price stability objectives makes China unable to afford having an undervalued exchange rate.     

External Constraint and Financial Crises with Balance Sheet Effects

This article investigates the dynamic implications of Krugman's (1999 Krugman, P. 1999. Balance sheets, the transfer problem, and financial crises. International Tax and Public Finance, 6(4): 459–472. (doi:10.1023/A:1008741113074)[Crossref], [Web of Science ®] , [Google Scholar]) model of financial crises with balance-sheet effects, which has a considerable impact on the literature of international financial crisis. Considering explicitly the wealth-accumulation constraint and the external equilibrium condition, I describe an emerging-market financial crisis as a jump from an unstable dynamic trajectory to a stable one, instead of a jump from a ‘good’ to a ‘bad’ equilibrium with zero investment and zero foreign debt. By discriminating the financial crises according to the severity of the negative impacts of some internal and external factors, this article also adds some insights into the anti-crisis policy.     

Estimated non-linearities and multiple equilibria in a model of distributive-demand cycles

We introduce the results of a non-parametric estimate of the US wage-Phillips Curve into a simplified version of the model of the wage-price spiral by Flaschel and Krolzig (2008). Making use of Okun’s law, the non-linearity in the wage inflation-employment relation translates into a non-linearity in the so-called ‘distributive curve’ of the economy. Exploiting the observed non-linearity in extending an otherwise standard demand-distribution model (Taylor 2004 Taylor, Lance. 2004. Reconstructing macroeconomics. structuralist proposals and critique of the mainstream, Cambridge, MA: Harvard University Press.  [Google Scholar]), we provide a dynamical analysis both in wage-led and profit-led effective demand regimes. In a profit-led scenario, shown to be the empirically relevant case for the US economy, there are two stable equilibria of Goodwin (1967 Goodwin, R.M. 1967. “A growth cycle”. In Socialism, capitalism and economic growth, Edited by: Feinstein, C.H. Cambridge, , UK: Cambridge University Press.  [Google Scholar]) growth cycle type, identified as a stable depression and a stable boom, and a saddle-path stable equilibrium in between them. Both stable steady states are surrounded by trajectories that cycle counterclockwise around their basins of attraction. The obtained type of growth fluctuations can be verified by a long phase cycle estimation for the US economy using a method developed by Kauermann, Teuber and Flaschel (2008 Kauermann, G., Teuber, T. and Flaschel, P. 2008. “Estimating loops and cycles using penalized splines”. Bielefeld: CEM working paper.  [Google Scholar]).