A short history of constitutional liberalism in America

American liberalism emerged before the most famous European liberal intellectuals put their pens to paper. It was grounded partly on liberal ideas that were in the air before those works were written, but mostly on the attractive communities generated by liberal institutions and policies. American liberalism is empirically, rather than theoretically, grounded. This paper uses excerpts from colonial and constitutional documents to demonstrate the long history of liberal institutions in the territories that became the United States. American liberalism is an evolutionary rather than an intellectual phenomenon.     

Consent,democracy and the future of liberalism

The Review of Austrian Economics - In this paper, I examine the ways in which liberal theory and democratic procedure have sought to address the justificatory challenge posed by the existence of...     

A Production Analysis of the Manufacturing Industries in Iran

This article is concerned with the estimation of production functions, returns to scale, and measurement of the rate of technical change using panel data. Technical change is represented by single as well as multiple time trends. The underlying production technology is represented in translog functional form. A random effects model with heteroscedastic variances is used. The models are estimated using the generalized least squares method. The disturbances of cross-sectional units are assumed to be correlated over time. Empirically, our focus is on measuring technical change in Iranian manufacturing industries during the period 1971–1993. Empirical results show that single or multiple time trend representations yield different time behavior of technical change. In the multiple time trends model, we observe a sharp decline in the pattern of technical change in 1978 in relation to the political changes. In the single time trend, as expected, the sharp decline cannot be revealed due to the smooth pattern of technical progress during the entire period of study.     

The limits of liberalism: Good boundaries must be discovered

Determining good boundaries for governance jurisdictions is among the most difficult problems in political theory and political philosophy. But to whom the rules of a given jurisdiction applies is a problem that afflicts private as well as public governance. Clubs have boundaries no less than cities, states, or nations. This essay applies Hayek’s conception of competition as a discovery procedure to boundary problems, arguing that good jurisdictional boundaries are subject to a great deal of contingent variation according to particular the conditions of time and place. Philosophical speculation, therefore, cannot fully replace a trial and error process that facilitates social learning about where good boundaries fall. I outline the features of good boundaries that make them subject to such variation, then evaluate two criteria for evaluating whether existing jurisdictional boundaries are good: one that emphasizes ex ante consent to boundaries, and one that focuses on the ability of individuals to exit from jurisdictions ex post, arguing that the exit-focused approach is underappreciated.     

A history of post-Keynesian economics

John King, in his A History of Post Keynesian Economics Since1936, raises the question of whether there exists a body ofwork which can be called, collectively, post Keynesian. Thispaper presents some criteria for addressing this question, beginningwith the vision and the origins of some of the post-Keynesianideas, leading to an examination of certain features of thevarious groups, including their methodology and their approachesto uncertainty, their pricing theories and their growth theories.It is concluded that, although there is much diversity in thevarious groups, they are reconcilable when seen as referringto different aspects of the economic process and at differinglevels of abstraction.     

A history of resistance to privatization in Russia

We investigate the connection between privatization in post-communist Russia and a mass privatization reform in Imperial Russia, the 1906 Stolypin land reform. Specifically, we relate historical measures of conflicts associated with the Stolypin reform to contemporary views on whether the privatization of the 1990s should be revised. These historical measures could influence contemporary views in two ways: first, differences in privatization-related conflicts in the past could have directly altered attitudes towards privatization in the 1990s and, second, these differences could merely reflect pre-determined dissimilarities in preferences. We first show that historical measures of resistance to privatization are associated with views that favor state ownership. One standard deviation increase in the historical resistance to privatization explains a quarter of the negative sentiment toward private property today. We also find that negative experiences with the Stolypin reform are associated with views on the procedural unfairness of modern privatization reforms, suggesting that pre-determined preferences cannot fully explain the weight of history.     

A short proof of Harsanyi''s purification theorem

A short proof of more general version of Harsanyi's purification theorem is provided through an application of a powerful, yet intuitive, result from algebraic topology.     

From weight watchers to state watchers: Towards a narrative of liberalism

Alan Kahan’s Mind vs. Money: The War between Intellectuals and Capitalism (Transaction Publishers, 2010) treats intellectuals as a class and tells of intellectuals’ yearning to play the role of cleric and aristocrat. Kahan says that intellectuals are necessarily alienated from “capitalism.” In this essay, I discuss Kahan’s erudite and insightful—though sometimes exasperating—work, and I take the opportunity to develop some ideas on the topic, ideas in line with Hayek’s thought.     

The origin of money: A survey of the contemporary literature

Introducing money into a scheme of general economic equilibrium entails manifold problems, which have emerged in many contributions to the literature. Some of these problems have been adequately addressed at the level of micro-based approaches which can be traced back to the monetary theory of Carl Menger. In this survey we shall review such issues, after which we shall attempt to illustrate the contribution to solving the problem of the origin of money offered by the literature on transaction and information costs inspired by Menger's monetary theory. (JEL: E40, E42, D83) Although this paper is the fruit of a common effort, credit for Sections 1, 2, 3, 5, 5.1, 5.2, 5.3 goes in particular to Giuseppe Mastromatteo, and for Sections 4, 4.1, 4.2, 4.3, 4.4, 6 to Luigi Ventura. The authors would like to thank the referees for most useful comments and suggestions; the usual disclaimer applies.     

A short and intuitive proof of Marshall's Rule

Summary. When the price of an input factor to a production process increases, then the optimal output level declines and the input is substituted by other factors. Marshall's rule is a formula that determines the own-price elasticity for one factor as a weighted sum of the elasticities of output market demand and factor substitution. This note offers a proof for Marshall's rule that is significantly shorter and somewhat more intuitive than existing derivations. Received: February 19, 2001; revised version: April 3, 2002 RID="*" ID="*" I thank Charalambos Aliprantis, John Moore, Patrick Schmitz, and the anonymous referee for helpful suggestions. Support by the German Academic Exchange Service is gratefully acknowledged.     

Designing the institutions of international liberalism: some contributions from the interwar period

Between the two World Wars, liberalism was challenged under many respects. Many intellectuals and several economists took an active part in the attempt to found a new strategy for the survival of the liberal values. Among them, some participated into the reflections that led, after WWII, to the birth of the neoliberal project. The paper enquires into the history of economic theories and debates of the Twenties, Thirties and until the foundation of the Mont Pelerin Society to find out what concept of international economic order some of these Authors had and assess the contributions they gave to the birth of international neoliberalism. Particular attention is devoted to Mises, Hayek, Robbins and Einaudi because their peculiar approach to the design of international institutions is inspiring both to understand the complex and heterogeneous scenario that characterized the debate on neoliberalism before WWII and to provide new perspectives on neglected contributions to the liberal thought.     

A history of European electricity day-ahead prices

In this article, we examine the development of day-ahead prices in five European markets which became more connected over recent years. Where previous studies examined the convergence of price levels over time, we focus on patterns in estimates for the parameters in a switching regimes model. This makes it possible to distinguish between prices under normal market conditions and under non-normal market conditions, those market conditions that can cause extreme price spikes. We expect that increased connectivity yields additional supply in the short-term and therefore will reduce the impact of price spikes. Our results indicate that the impact of price spikes and volatility decreased over time, that prices behave more random, and that the parameter estimates between various connected markets seem to have converged between the Belgian, Dutch, French, German and Nordic day-ahead markets over the years 2003 through 2010. These results can be explained by increased connectivity and improved liquidity.     

Oil booms and inequality in Iran

We study the response of income inequality to positive per capita oil and gas revenue shocks in Iran. Using historical data from 1973 to 2016 and vector autoregression (VAR) as well as vector error correction (VECM) model‐based impulse‐response functions, we find a positive and statistically significant response of income inequality to oil booms. We also explore possible channels through which oil booms may increase inequality, including private sector credit growth, construction investment, international trade (imports) and real economic output. We find that following an oil boom, higher imports, private sector credit growth, and real economic output can explain the increased income gap to a certain degree in Iran's oil‐based economy. Our analysis can help policymakers evaluate and accommodate the possible positive or negative effects of inequality in Iran resulting from the 2016 lifting of the embargo against the country.     

Economic history and history of economics

Trust, along with other influential norms of cooperation, has been traditionally viewed as an important coordination mechanism stabilizing expectations of the participants in the informal economic exchanges. Drawing on the example of the informal value transfer system called hawala, this paper, however, shows that the role of safeguard against opportunism in the informal monetary settings is much more reliably performed by the instruments of social control. Norms of control embedded in community beliefs and common social practices among the hawala members entirely replace trusting attitudes, rendering them superfluous for the purpose of protecting financial interests of clients and intermediaries in this informal system of monetary exchanges.