Edith Penrose and economics

This paper contains a constructive critique of the Penrose pictureof firm, comparing it with, on the one hand the Coase-Williamsontransactions-cost picture, and on the other with the author'sown growth model. It concludes that the Penrose theory doesnot at the end of the day quantitatively determine the growthrate of the firm and that the transactions-cost story does notat the end of the day determine the size of the firm. The author'sown model determine's the growth rate of the firm, but not thesize. If married to a stochastic process, the author's modelcontributes to the determinate, but the quantitative parametersin any one society at any one time, are not. As there is, however,a strong case that the administrative efficiency of firms hasno robust relationship to absolute size this indeterminacy maynot be economically significant. In other words, the staticefficiency of an economy is not sensitive to either the absolutesize distribution of firms or to their growth processes. Instead,the key contribution of firms' growth processes to social welfareprobably lies mainly in the realm of competitive dynamics. Interfirmcompetition for growth is also competition to innovation, àla Schumpeter.     

Firms and industries in evolutionary economics: lessons from Marshall, Young, Steindl and Penrose

Evolutionary economists have tended to assess firms and industries separately, neglecting the role of their interaction in the process of economic growth and development. We trace the separation of firms and industries to the introduction of population thinking in the discipline of industrial economics, including some broadly evolutionary analyses. If researchers conflate a population of firms with an industry, they introduce “thin” means of relating firms to one another and to industries. Despite his device of the ‘representative firm’, Marshall develops “thick” means of relating firms to industries by means of their internal and external organizations. Penrose avoids the notion of industry by focussing on heterogeneous and potentially mobile firms. Young and Steindl develop mundane explanations of firms’ relations within groups and locate the impetus for economic growth in a poorly understood environment. We conclude that evolutionary economists should revisit firms’ boundaries, not in the sense of explaining the existence of firms but in a relating and communicating sense in which boundaries signify the selective means of firms’ relationships.     

“One Man,One Dollar”? Campaign contribution limits,equal influence,and political communication

Arguably the most important campaign finance regulations in U.S. federal elections are limits imposed on individual campaign contributions. One of the principal arguments in support of these contribution limits has been that they equalize the influence of individual donors and thereby cause candidates' aggregate financial resources to more accurately reflect public support. I construct a formal model to evaluate this argument. The analysis shows that a necessary condition for it to apply is that a candidate's reliance on large contributions is negatively related to voter-preferred characteristics which cannot be credibly revealed through campaign advertisements. Using data on elections to the House of Representatives between 1992 and 2000, I find no evidence that such a relationship exists. This result casts doubt on the equalization argument in support of campaign contribution limits.     

Sraffa,interdependence and demand: the Gramscian influence

The influence of Sraffa' early commitments to Gramscian Marxism on his subsequent economic analysis have been little investigated by Sraffa scholars. The discussion here argues for a philosophical connection. Specifically, it is argued that organicist ideas found their way into Sraffa's thinking about interdependence in his 1926 critique of Marshall, in his reported critique of Wittgenstein's early philosophy, and in his 1960 Production of commodities. In each instance, atomist views were challenged in an understanding of agent or sectoral interdependence that made use a single criterion for agent or sectoral autonomy: that such autonomy depends upon the fulfilment of identify conditions for the individuation of autonomous agents or sectors. It is suggested that Sraffa's thinking in this regard ses the attempted fulfilment of these conditions in neoclassical theory as self-contradictory, thus allowing the characterization of his thinking as a form of impossibility logic. This impossibility logic is contrasted to that of Arrow, in order to advance general propositions about Sraffa's understanding of demand.     

Metaphors,social practices,and economic life: ASE presidential address

Our lived experiences of the economy shape the metaphors that we use to describe the economy. Yet, any particular metaphor can only provide a partial perspective. There are two ways our conceptual frameworks have reflected partial perspectives. The first is historical: our conceptual frameworks tend to build upon ideas developed during the factory age. A machine metaphor, grounded in the industrial age, focuses on the transformation of resources into outputs, but it obscures other aspects of economic life. Second, economic concepts and metaphors are affected by our personal standpoints and our social identities. As social economists, we recognize that our economy is embedded in society, a society in which social identities such as class, gender, race, ethnicity, and nationality shape our standpoints. To fully understand the continuities and changes in how social provisioning is organized, we need to be attentive to these social identities and how they are constituted and transformed through social practices.     

Economic life, rights, and obligations: Perspectives from theological teleology

Even while acknowledging the autonomy of “laws” specific to economics, theology situates the view of economics as a “means-ends” science of human choices within an unavoidable overarching moral order. After all, economic life is merely part of a much larger personal quest for happiness. Thus, the efficient selection of means for particular ends necessarily takes place within the context of objective standards of economic rights and obligations as part of human nature. The teleological perspectives of theology add much to our understanding of economic life by providing the warrants for these rights and obligations.     

Start-ups, long- and short-term survivors, and their contribution to employment growth

This study documents that the survival of start-ups is central in explaining the relationship between entry and regional employment growth. Distinguishing between start-ups according to the period of their survival shows that the positive effect of new business formation on employment growth is mainly driven by those new businesses that are strong enough to remain in the market for a certain period of time. This result is especially pronounced for the relationship between the surviving start-ups and employment growth in incumbent businesses indicating that there are significantly positive indirect effects of new business formation on regional development. We draw conclusions for policy and make suggestions for further research.     

Second contribution to the ENE critique: Reply to Davidson,part 1

On first encounter, the ergodic/nonergodic (ENE) approach has apparent plausibility. Although concerned by some of its problems for many years, it was only after more concentrated reflection on both its parts and their combinations that I became aware of its manifold deficiencies, some of which I outlined in my previous critique (O’Donnell, 2014 ———. “A Critique of the Ergodic/Nonergodic Approach to Uncertainty.” Journal of Post Keynesian Economics, 2014, 37 (2), 187–209.[Web of Science ®] , [Google Scholar]). In this paper, facilitated by Davidson’s (2015b ———. “A Rejoinder to O’Donnell’s Critique of the Ergodic/Nonergodic Explanation of Keynes’s Concept of Uncertainty.” Journal of Post Keynesian Economics, 2015b, 38, 1–18.[Taylor & Francis Online], [Web of Science ®] , [Google Scholar]) rejoinder, these criticisms are deepened, broadened, and strengthened. Because the debate deals with fundamental matters in several disciplines, a considerable amount of investigation, unpacking, and logical dissection is required to clarify the argumentation beneath the compressed and seemingly smooth surface of the ENE position. For this reason, my reply is divided into two parts. This contribution primarily examines the central role of framing in ENE arguments, and clarifies the various misunderstandings and misrepresentations to which it leads. The subsequent contribution provides more detailed discussion of mathematical, stochastic, and methodological issues.     

Political contribution caps and lobby formation: Theory and evidence

The perceived importance of “special interest group” money in election campaigns motivates widespread use of caps on allowable contributions. We present a bargaining model in which the effect of a cap that is not too stringent on the amount a lobby can contribute improves its bargaining position relative to the politician. It thus increases the payoff from lobbying, which will therefore increase the equilibrium number of lobbies when lobby formation is endogenous. Caps may then also increase aggregate contributions from lobbies and increase politically motivated government spending. We present empirical evidence from U.S. states that support various predictions of the model. We find a positive effect on the number of PACs formed from enacting laws constraining PAC contributions. Moreover, the estimated effect is non-linear, as predicted by the theoretical model. Very stringent caps reduce the number of PACs, but as the cap increases above a threshold level, the effect becomes positive. Contribution caps in the majority of U.S. states are above this threshold.     

The external debt contribution to output,employment, productivity and consumption: A model and an application to Chile

A foreign-capital-dependent investment equation is used to generate capital stock series, towards estimating a non-homogeneous variable elasticity of substitution production function. Debt contributions are derived from here. For Chile between 1960 and 1982, a negative correlation between foreign capital and domestic savings, and a low marginal product of capital, account for minimal debt contributions. However, factor price distortions, capacity under-utilization, preferences for current consumption, short planning horizons combined with huge debt, unrealistically rigid assumptions of previous work and model limitations, all suggest substantial direct consumption costs of default or repudiation, and through them, indirect output and income costs.     

The company you keep: Satisfaction with life,economic freedom,and preference-policy mismatch

We examine the interaction between individual preferences for markets and state-level economic freedom as it relates to Satisfaction with Life (SWL). Fundamental tenets of economic freedom assert that societies free of excessive government involvement are wealthier and, ultimately, happier; individuals who are allowed to pursue self-interest are argued to be more motivated and more productive, and so society as a whole is better off. Though there is substantial empirical evidence that freer societies are wealthier, the evidence connecting economic freedom and happiness is less clear. We explore the relationship between economic freedom and SWL at the individual level. We examine differences between personal preferences for free markets and state policy and how this ‘preference-policy mismatch’ is related to SWL. We then briefly examine the relationship between preference-policy mismatches and individual self-reported voting behavior, including implications for Tiebout sorting. This study is the first to focus on individual economic ideology, i.e. individual level of support for free markets, and SWL in the United States. Combining individual and state level data we offer improvements to prior studies in a number of areas including an enhanced measure of life satisfaction, a richer basis for examining left-right differences than simple political identification, and an examination of the effect of preference-policy mismatches on satisfaction with life. We find significant relationships between SWL and individual support for markets, state-level economic freedom, and preference-policy mismatch. Further, preference-policy mismatch is positively associated with self-reported voting frequency. We find little support for Tiebout sorting.     

Disequilibrium economic dynamics: A post-Schumpeterian contribution

Adaptive economizing in a decentralized economy with alternative technologies and scarce resources leads to various kinds of locally unstable behavior. Economic disequilibrium is the rule in such a world and requires the presence of market mechanisms that make possible continued viability. If in addition to local instability economies are also globally unstable, as considerable evidence suggests, then the discovery and application of new structure is essential. A complete dynamic theory of economic change must therefore be based not only on conventional rationality and routinely adapting behavior but on a superior faculty which may perhaps best be called creative intelligence.     

Budgetary institutions and fiscal discipline: Edmund Burke's insightful contribution

Recent developments in the political economy of public finance literature have focused on the features of budgetary institutions that facilitate budgetary discipline — a sub-discipline of constitutional economics. In this literature, there has been no attempt to trace the development of economic thought on the relationship between budgetary institutions and fiscal discipline. This may be because debt accumulation in peacetime is seen as a late twentieth-century phenomenon. As a result, Edmund Burke's contribution, in his speech ‘On Economical Reform’, seems to have been forgotten. This paper highlights Burke's contribution and identifies the extent to which it captures those features of budgetary institutions that are currently recognized as facilitating budgetary discipline.     

面试作伪行为：概念、形成机制及影响因素

近些年,随着面试在人才选拔中的广泛应用,一些蓄意歪曲、虚假表现的欺骗性行为也应运而生,给组织带来了诸多负面影响。面试作伪的概念源自于印象管理,是多种因素共同作用的结果。其未来的相关研究应侧重于形成机制、干预措施、对组织的作用机制,以及跨文化比较研究。     

Micro and macro dynamics: Industry life cycles,inter-sector coordination and aggregate growth

Technological change directly affects economic growth by exploiting and exploring technological opportunities, thus determining productivity growth and income. However, technological change also affects the composition of the economic system, which itself constitutes an important prerequisite for economic growth. The first aim of this paper is to show that the growing variety of the economic system, determined by the emergence of new products and services and leading to new industrial sectors, can allow the long term continuation of economic development, even when the employment creating capacity of individual sectors falls. The second aim is to illustrate the impact of micro variables on the meso-level, that is, on the sectoral composition of an economy, as well as on its macro-economic performance.      

Public policy,footloose capital,and union influence

This document sets up a unionized general oligopolistic equilibrium model of countries, where capital is footloose and governments maximize utilitarian welfare. When capital owners have weak influence on public policy, there is unemployment and the governments compete for jobs, causing a distortion with suboptimal wages. Then globalization—as characterized by a decrease in impediments to international investment—increases the wage elasticity of capital flight, decreasing wages and increasing employment. This benefits the capital owners and the unemployed workers getting a job, but harms the other workers. International coordination of public policy alleviates these consequences of globalization.     

Minority representation, election method, and policy influence

Recently a number of legal scholars have advocated jurisdiction-wide cumulative voting as a mechanism to promote minority representation. Among other benefits, they claim minority representatives will have greater policy influence if they are elected in at-large contests rather than from single-member districts. We test this proposition by estimating the deter-minants of minority hiring practices. We find increases in the proportion of black representatives on a city council are positively correlated with the percentage of black police recruits. However, holding constant black representation, the impact of black councilors on municipal hiring is enhanced when councilors are elected at-large rather than by district.     

Lobbying,political competition and the welfare effect of campaign contribution tax

This paper develops a probabilistic voting model in which a single lobby group commits campaign contributions to parties, contingent on the policy position the party adopts. Parties may have different propensities for diverting campaign funds towards rents. We show that a party that skims more from contributions mobilises fewer uninformed voters but places more value on receiving greater contributions. Further, the contributions and vote share of the party increases with the distance between the lobby's preferred policy and the median voter's ideal policy. Finally, we show that the equilibrium policy is between the median voter's ideal point and the lobby's preferred policy. Such an equilibrium policy does not maximise the aggregate social welfare due to the distortionary nature of lobbying. However, when an appropriate contribution tax is introduced to limit this distortion, social welfare will be maximised.