Eriksson on Critical Realism: a rejoinder

Abstract

In this response to Andrew Mearman I argue that his critique suffers from a series of misrepresentations of my paper. For example, Mearman generalizes my arguments about Keynes to be about Critical Realism (CR), and he challenges my criticism of Tony Lawson's arguments by claiming that I have misrepresented CR. In fact the text of my 1998 paper does not support Mearman's claims. Furthermore, since (i) the principal aim of my paper was to question the interpretation of Keynes as a realist, and (ii) Mearman does not present any arguments suggesting how CR in its current form would refute my conclusions, his criticism must be judged doubly misdirected.     

Prospect theory in the wild: how good is the nonexperimental evidence for prospect theory?

ABSTRACT

Prospect theory is widely thought to be one of the best-confirmed accounts of human decision-making under risk. There are numerous claims in the literature that various kinds of nonexperimental, observational evidence provide strong support for prospect theory. We investigate the veracity of these claims using a set of philosophy of science morals and a careful delineation of models of choice under risk, focussing on the extant versions of prospect theory and their various components. We challenge the claim that prospect theory is well supported because it explains the equity premium puzzle. In addition, we analyse a major international survey thought to support prospect theory and argue that the support is questionable, both for statistical reasons and because the evidence itself is mixed. Our analyses highlight some important ideas in the philosophy of science and caution against strong claims about support for prospect theory that rely on nonexperimental, observational evidence.     

International law as a moral theory of state territory?

Current states face challenges from other states and secessionist movements, and no moral theory exists to evaluate these conflicting claims. One step towards a theory is to evaluate international law on territory, specifically as articulated through decolonisation. I argue that international law does not provide a plausible moral theory of territory because the principles of territorial integrity and uti possidetis cannot coherently coexist with the principle of self‐determination. I suggest that philosophers must choose between viewing territory as an expression of national self or as a property right, or else develop a third view from sources beyond current international law.     

Exploitation,international taxation,and global justice

Abstract

I investigate the central principle that underlies the OECDs tax base erosion and profit shifting initiative. The principle claims that (corporate) profits should be taxed where economic activities deriving the profits are performed and where value is created. First, I argue that its plausibility depends on establishing that states have an entitlement to the productive factors in their territory, and therefore to a share of the value created by employing those factors. Second, I maintain that this cannot presently be established. If states fail to discharge duties requiring wealth redistribution, they do not have an unqualified right to the productive factors in their territory. Even if they are not subject to such duties, states can only legitimately claim a share in the fair value of the goods created. I show that given widespread exploitation in global value chains, the market prices of (intermediary) goods do not reflect their fair value.     

The quantitative turn in the history of economics: promises,perils and challenges

ABSTRACT

A quantitative turn in history of economic thought is looming. We argue that engineering it consciously is of crucial importance for historians of economics. We also highlight the limitations of quantitative techniques. Yet, the combination of qualitative and quantitative research could substantially enrich our narratives of the development of economics and its practice, of how ideas and tools disseminate and influence other spheres. A failed quantitative turn could lead our field to a house divided and, in the worst case, a civil war.     

Eriksson on critical realism: a comment

Abstract

This note offers a critique of Ralf Eriksson's treatment of Critical Realism. Eriksson, in the context of an analysis of Keynes, makes several mistaken claims about Critical Realism. Specifically, contrary to Eriksson, Critical Realism does not claim that the world is independent of consciousness, that isolation and closure are equivalent, that abstraction and closure are equivalent, that Lawson employs double standards in the possibility of closed systems, or that realist theories must be simple. Eriksson attacks a vulgar form of realism, but not Critical Realism as it currently stands. We also argue that Eriksson's misinterpretations may be partially due to some ambiguous statements in the Critical Realist literature.     

Life beyond the Washington Consensus: An Introduction to Pro-poor Macroeconomic Policies

Abstract

This paper develops a rationale for the recession-induced inflation hypothesis. Within a conflicting claims framework we present a model in which both price leaders and organized workers set their nominal prices on the basis of a desired profit rate and a real wage target respectively. We argue that an absolute cost advantage in concentrated industries (for instance in fixed costs) may provide oligopolistic leaders sufficient margin to raise prices and restore a desired level of profitability during a recession. The resultizng unstable income distribution will set off an inflationary spiral if the firm's advantage in selling its output imparts an upward bias to the flexibility of input prices (specifically wages). Taking into consideration different scenarios for workers' bargaining power we present a simple simulation experiment to analyze the inflation and real wage paths of the economy after a negative output shock. When we endogenize output, we show that for a high degree of the bargaining power, output is likely to converge to a higher steady-state value.     

Non-causal understanding with economic models: the case of general equilibrium

How can we use models to understand real phenomena if models misrepresent the very phenomena we seek to understand? Some accounts suggest that models may afford understanding by providing causal knowledge about phenomena via how-possibly explanations. However, general equilibrium models, for example, pose a challenge to this solution since their contribution appears to be purely mathematical results. Despite this, practitioners widely acknowledge that it improves our understanding of the world. I argue that the Arrow–Debreu model provides a mathematical how-possibly explanation which establishes claims of mathematical dependence. The account developed reveals how mathematical knowledge can inform claims about the world, allow ‘what-if-things-had-been-different’ inferences, and thus improve our understanding.     

Does the inequality-credit-crisis nexus exist? An empirical re-examination

ABSTRACT

Rajan claims that rising inequality led to financial crises through credit booms in the U.S. Kumhof and Ranciere provide a theoretical formulation for this hypothesis. However, their assertions are not supported by cross-country evidence found in the work of Bordo and Meissner. A few subsequent empirical studies, albeit inspired by this pioneering work, find new evidence not in line with its conclusion but with the Rajan hypothesis. To clarify this controversial issue, we base our study on the B-M framework, resort to different estimators, and employ more model specifications by incorporating the role of deindustrialization. We find strong evidence for the inequality-credit-crisis nexus as modelled by Kumhof et al.     

The status of modeled claims

Abstract

The only acceptable modeled claims for costs and outcomes are those that are testable and can be validated in a timeframe that is acceptable to a formulary committee. This issue provides four papers which explore the methodological issues in validation, the UK experience with NICE, the questions a formulary committee should ask of modeled claims, and the role of Big Data in validating modeled claims.     

Infusion administration billing for vedolizumab and infliximab in inflammatory bowel disease

Abstract

Aims: Increasing use of biologics has led to interest in treatment components with potential for cost savings. This study was aimed at comparing administration times and associated costs of infliximab and vedolizumab infusions for inflammatory bowel disease (IBD).

Materials and methods: This study used claims data from the Symphony Health Integrated Dataverse to identify IBD patients using infliximab or vedolizumab between 20 May 2014 and 29 February 2016. Use of Current Procedural Terminology administration codes was evaluated and costs calculated using the 2016 Center for Medicare and Medicaid Services Physician Fee Schedule. Assessments included infusion times, associated costs, productivity loss using average wage estimates from the United States Bureau of Labor Statistics, and home infusion adoption.

Results: A total of 10,051 infliximab and 3114 vedolizumab patients with first-hour claims were identified; 52.0% were female and 64.5% had Crohn’s disease. There were 48,377 infliximab first-hour claims (mean 4.8 infusions per patient); 46,462 (96.0%) had a second-hour claim. In comparison, there were 14,717 vedolizumab claims (mean 4.7 infusions per patient), with only 411 (2.8%) second-hour claims, resulting in vedolizumab cost savings of approximately $1.27 million. The difference in second-hour infusions resulted in 46,051 additional hours of productivity loss with infliximab, and lost wages averaging $1.18 million (range $0.68–$1.77 million).

Limitations: Administration costs were inferred as charge costs and not directly assessed. Productivity loss assessed time spent on infusion only, and included a small proportion of patients beyond working age.

Conclusions: Second-hour infusion billing was significantly lower with vedolizumab than with infliximab, corresponding to cost savings and reduced productivity loss.     

Healthcare costs and utilization associated with muscle weakness diagnosis codes in patients with chronic obstructive pulmonary disease: a United States claims analysis

Aims: Muscle weakness (MW)-attributable healthcare resource utilization (HCRU) and costs in patients with chronic obstructive pulmonary disease (COPD) have not been well-characterized in US insurance claims databases. The primary objective of this study was to estimate HCRU in patients with evidence of COPD with and without MW diagnosis codes.

Materials and methods: This retrospective analysis used the MarketScan^® Commercial Claims and Encounters and Medicare Supplemental and Coordination of Benefits databases. Between January 2007 and March 2016, we identified patients aged ≥40 years with diagnosis codes for COPD (≥1 emergency department or inpatient claim or ≥2 outpatient claims within 1 year). The cohort was divided into patients with and without ≥1?MW diagnosis code. Propensity score matching was used to generate pairs of patients with and without MW (1:1). Multivariable regression analyses were used to estimate adjusted incremental costs and utilization attributable to the presence of MW diagnosis codes among patients with COPD.

Results: Of 427,131 patients who met the study inclusion criteria, 14% had evidence of MW. After matching, 107,420 unique patients remained equally distributed across MW status. Patients with MW diagnosis codes had greater predicted annual HCRU, $2,465 greater total predicted annual COPD-related costs, and $15,179 greater total all-cause costs than those without MW diagnosis codes. Overall, <1% of patients received COPD-related pulmonary rehabilitation services.

Limitations: Study limitations include the potential for undercoding of MW and lack of information on severity of MW in claims data.

Conclusion: The presence of MW diagnosis codes yielded higher HCRU in this COPD population and suggests that the burden of MW affects both all-cause and COPD-related care. However, utilization of pulmonary rehabilitation, a known effective treatment for MW, remains low. Future research should expand on our results by assessing data sources that allow for clinical confirmation of MW among patients with COPD.     

The concept of “lawfulness” in economic matters. Reading Ibn Rushd (Averroes)

Abstract

In the Middle Ages the major concept through which economic matters are analysed and evaluated is the “lawful”, in Arabic jâ’iz, concept. It claims to establish whether a gain, a profit, a contract is lawful or not: that is the main question theologians examine when they are addressing the issue of appreciating any economic fact. In our study, we analyse the criteria of the “lawfulness” as found in the economic parts of Ibn Rushd's work entitled Bidâyat al-mujtahid wa nihâyat al-muqta?id (English translation: The Distinguished Jurist's Primer). Our thesis is inspired essentially by Raymond De Roover's studies on the economic thought in the Middle Ages. De Roover shows that the criteria for lawfulness are to be found in the nature of the contract between partners: a gain is lawful if the contract which generates it is lawful. Our study essentially consists in a text analysis.     

How do business schools compete in Latin America? Stability and best predictors of success for the AmericaEconomia MBA Ranking

ABSTRACT

The main aim of this paper is to present a longitudinal analysis of the AmericaEconomia MBA Ranking for the period 2005–2014. AmericaEconomia was the first international ranking specifically devoted to Latin American business schools, and with data gathered from this publication, we build a panel to study its stability and the main determinants of a school‘s position in such ranking. We examine the reliability of the ranking, that is whether changes in the relative positions are not just due to white noise, and compare its stability with those of the US and other global rankings. We also empirically determine which are the key quality variables this ranking is promoting for Latin America Business Schools and the evolution of these business schools during the period under study. Unlike previous literature that usually considers dynamic Tobit models for ranking analysis, we put forwards an alternative methodology based on a system GMM estimator with first-differenced instruments. We argue that dynamic Tobit models are appropriate only if you have truncated data about the ranking variable but full data on Business Schools variables.     

Medical chart validation of an algorithm for identifying multiple sclerosis relapse in healthcare claims

Abstract

Objective:

Relapse is a common measure of disease activity in relapsing-remitting multiple sclerosis (MS). The objective of this study was to test the content validity of an operational algorithm for detecting relapse in claims data.

Methods:

A claims-based relapse detection algorithm was tested by comparing its detection rate over a 1-year period with relapses identified based on medical chart review. According to the algorithm, MS patients in a US healthcare claims database who had either (1) a primary claim for MS during hospitalization or (2) a corticosteroid claim following a MS-related outpatient visit were designated as having a relapse. Patient charts were examined for explicit indication of relapse or care suggestive of relapse. Positive and negative predictive values were calculated.

Results:

Medical charts were reviewed for 300 MS patients, half of whom had a relapse according to the algorithm. The claims-based criteria correctly classified 67.3% of patients with relapses (positive predictive value) and 70.0% of patients without relapses (negative predictive value; kappa 0.373: p?<?0.001). Alternative algorithms did not improve on the predictive value of the operational algorithm. Limitations of the algorithm include lack of differentiation between relapsing-remitting MS and other types, and that it does not incorporate measures of function and disability.

Conclusions:

The claims-based algorithm appeared to successfully detect moderate-to-severe MS relapse. This validated definition can be applied to future claims-based MS studies.     

Restructuring China's Petrochemical Enterprises: A Case Study of the Fushun Petrochemical Company

This article presents a case study of Fushun Petrochemical Company (FPC), which is a large state-owned enterprise (SOE) in Liaoning province under the control of China National Petroleum Corporation. In the first part of the article we argue that China's approach to the reform of large-scale SOEs in upstream industries such as petroleum has a sound economic logic. In the second part we use the recent restructuring of FPC to illustrate China's approach to reforming the petrochemical sector. We draw on interviews with managers and local government officials to discuss both the difficulties that the enterprise faced prior to reform and the main measures that were implemented during restructuring to address these problems. While the restructuring process at FPC has just been completed, we argue that the outcome provides some support for China's decision to promote large SOEs in upstream industries.     

Quantifying the economic impact of a digital self-care behavioral health platform on Missouri Medicaid expenditures

Abstract

Aim: The primary objective of this study is to estimate the economic benefits relative to return on investment (ROI) of a state-wide initiative to integrate digital behavioral health (BH) self-care into the community BH system.

Methods: The observational study reviewed claims data of 799 people who registered with the digital tool (myStrength) and 715 matched control study participants. The control group was formed via coarsened exact match with blocking variables, including presence on the claims file, volume of health care utilization, participation in a medical health home, BH diagnosis and volume of psychotherapy claims. The primary study analysis of cost differences for the BH self-care tool group versus the control group were calculated by cost setting and the ROI of the BH self-care tool was estimated. Cost settings assessed include inpatient, emergency services, general and psychiatric outpatient, and outpatient psychotherapy.

Results: An incremental annual difference in difference reduction of $382 per user was observed over the 11 month study period in the self-care tool group. Sensitivity analysis indicated an ROI of between 142% and 695%.

Conclusions: Augmenting BH offerings to include digital BH self-care tools appears to generate positive ROI via reduced total cost of care.