Rousseau's notion of envy: A comparison with modern economic theory

Abstract

The concept of envy is present both in Rousseau's economic philosophy and in modern economic theory. This paper compares these different uses of the concept and studies the relevance of the definition of envy adopted on each side, taking into account what is at stake when a notion of envy is introduced. It will be shown that Rousseau's envy cannot be expressed by modern conceptions of envy. Nevertheless, it enlightens the debate between the two competing notions of envy present in modern economic theory, revealing that the existence of envy questions the notion of self-interest.     

On a generalization of a class of production functions

In Appl. Econ. Lett. 18 (2011), 1777–1784, as a natural generalization of some famous production models with two inputs, C.A. Ioan and G. Ioan introduced a new class of production functions with constant return to scale, called sum production function, and proved three theorems of characterization for such production models. In this article, we give new and more simple proofs of these theorems, extending also the results to the case of increased/decreased return to scale. The generalization to the case of an arbitrary number of inputs is also discussed.     

A generalization to QUAIDS

Previous research shows that consumers’ response to price and income changes is heterogeneous. In addition, evidence from national data often does not support the classical assumption of one commodity-one price. This paper introduces a data coherent generalization to the quadratic form of the almost ideal demand system (g-QUAIDS) that incorporates the sources of heterogeneity in the demand function and allows for regional price variation. Aggregation over consumers imposes a linearization to the g-QUAIDS that requires a new set of price indices. The results from an empirical study by using microdata from the Household Income and Expenditure Survey of Iran highlight the impact of aggregation bias in relation to the level of aggregation. An investigation of the predictive power of linear versus nonlinear g-QUAIDS in different aggregation levels provides practical recommendations for consumer demand analysis.     

Rights and relations in modern economic theory

The paper is the 1980 Böhm-Bawerk-lecture given at the University of Innsbruck. Starting from Böhm-Bawerk's book. ‘Rights and relations from the point of view of the economic theory of goods’ the paper tries to evaluate rights and phenomena like goodwill from the perspective of innovation. A framework of three levels of economic activity is developed. The three levels are: consumption (the lowest level), production and innovation (the highest level). Rights are interpreted as instruments of protection of higher level activity from lower level activity. Focus of attention are industries with very high rates of technical progress and innovation. There the most important positive externality of innovation is the increased potential for even more innovations. It is argued that competition policy, as a rule of thumb, must foster competition by innovation and must discourage competition by imitation.     

Capabilities and production theory

The paper draws on a specification by Sen to model consumer capabilities and welfare, and extends this to modelling capabilities of producers and other agents. ‘Dynamic interactive capabilities’ are the outcome of successful interaction between evolving consumer and/or supplier capabilities and evolving producer capabilities, all occurring in ‘real time’ to meet the needs of dynamic competition in Schumpeter's sense. This involves learning on each side, as well as interactive learning between them. The paper then investigates the direction of both product and process changes in producers, driven by demand as well as supply factors through historical time and during structural change. Some consideration is given as to why orthodox production theory should have failed to broach so many of the issues which appear to be driving dynamic capabilities and productivity change in historical practice. Paths for further development of the capabilities approach are suggested.     

Greeks and games: Forerunners of modern game theory

Modern game theory is connected with its ancient Greek originals in three respects.

Breeding and raiding: A theory of strategic production of skills

Some of the skills that firms require are obtained only through on-the-job-training. This paper concentrates on the strategic production of skills within the firm. Firms obtain high-quality workers either by training their own (breeding) or by using the open market to bid away workers trained by other firms (raiding). Even when all firms have access to the same technology of production, training, and breeding, it will typically be the case that both breeding and raiding will be pursued, with equal profitability, in equilibrium. Thus, we explain raiding behavior as part of an equilibrium theory. This paper also studies the effect of the decision to train workers on the optimal firm size and the distribution of income.     

A hybrid production structure in trade: theory and implications

In models of pure theory of international trade, no unique production structure is dominant. By grafting a specific factor structure onto a Heckscher–Ohlin framework, in a hybrid general equilibrium production model, this paper presents theoretical results with implications such as: (a) the relative price increase of a traded goods sector might have expansionary or contractionary output effect depending on factor intensities; (b) uniform primary-factor augmenting technical progress in the intermediate inputs sector might lead to a decline in the output of one of the sectors; (c) favorable relative price effect in one sector will lead to a drop in the return to the specific capital type depending on the grafted production structure. The proposed framework is useful for explaining stylized facts related to wage inequality, deindustrialization and export-processing, which have a great policy relevance for trade and development.     

Book production and the onset of modern economic growth

We provide a new data set on per capita book production as a proxy for advanced literacy skills, and assess this relative to other measures. While literacy proxies very basic skills, book production per capita is an indicator for more advanced capabilities. Growth theory suggests that human capital formation plays a significant role in creating the ‘wealth of nations.’ This study tests whether human capital formation has an impact on early-modern growth disparities. In contrast to some previous studies which denied the role of human capital as a crucial determinant of long-term growth, we confirm its importance.      

演化理论视角下现代经济增长理论的批判与重建

本文在演化经济学的视角下,建设性地批判现代经济增长理论,试图建立一个新现代经济增长理论的初步基准分析框架,在此基础上比较了新现代增长理论与现代经济增长理论,并提出进一步研究的方向.     

A generalization of working's model

Working's (1943) model states that budget shares are linear functions of the logarithm of income; it implies constant differences between corresponding marginal and budget shares. A one-parameter generalization is proposed which allows each marginal share to be a linear function of the corresponding budget share. This model can be further extended (with one extra parameter) so that all goods are either specific substitutes or specific complements.     

Does modern endogenous growth theory adequately represent Allyn Young?

Endogenous growth theory is now fashionable. It seeks to explainwhy per capita income growth in capital abundant countries isoften faster than in capital poor countries and defies the operationof diminishing returns. This theory, which took off with Romerand Lucas, often makes Allyn Young's concept of increasing returnsand Marshall's distinction between internal and external economiesits starting point but considers their treatment of the subjectas not sufficiently rigorous. The modern endogenous growth theoriststhen claim to explain what they had in mind with greater clarity,rigour and depth. This paper argues that this is not the caseas these theorists actually misrepresent Young in importantways.     

Capital and capacity utilization revisited: A theory for ICT-assisted production systems

In this paper we present a framework as how to analyze capital and capacity utilization issues with reference to production processes heavily characterized by the use of ICT. We derive this framework by developing in original way the fund–flow model of Georgescu-Roegen, one of the pioneers of the capital utilization analysis, since this model is able to capture many qualitative aspects of production, above all the issue of the different time profile of use of the production elements.In the economic literature capital utilization is often equated with capacity utilization. However, if we refer to the neo-classical production analysis, this is true only if there is but one fixed input (capital) and if production is characterized by constant returns of scale. In a different way, we study capital and capacity utilization issues under the hypothesis of increasing returns of scale, particularly significative in ICT-assisted productions. The main contribution of the paper is to show that an important way of varying capital utilization is through the flexibility of a ‘machine’ to perform some tasks at the same time and the ability of ICT to exploit economically these possibilities. The analysis addresses a partial equilibrium level. Moreover, we show as our framework could be extended to include the case of multi-production with heterogeneous capital.     

A simple proof of the LeChatelier-Samuelson principle and the theory of cost and production

We provide a simple proof of a version of the so-called strong LeChatelier-Samuelson principle particularly suitable for the application to the theory of cost and production. We will illustrate its usefulness and fundamental nature in the case of the classical theory of cost and production.