Integration, Fragmentation and the Geography of Welfare

The welfare effects of trade integration with endogenous production technology are examined in a monopolistic competition framework. In addition to explaining industry location, trade patterns and accompanying effects on local welfare, the analysis highlights the endogenous change in the costs of supervising fragmented production when economies open up to trade. By regarding fragmentation as a skill‐intensive activity, factor proportions (rather than size) strongly affect the international distribution of gains from trade. Nevertheless, albeit not generally, for a wide range of parameter values, even a skill‐poor country can participate in the gains—despite loss of industry.     

Rationality without Transitivity

In this article rational choice behavior is investigated without assuming transitivity or completeness of the underlying preferences. These standard properties are replaced by a property concerning dominant alternatives. This permits the existence of preference cycles among alternatives which are dominated, while still ensuring the existence of a rational choice correspondence. We will also realize that some rational choice rules still hold in this context. Further we will see that in equilibrium analysis the existence of a competitive equilibrium follows when transitivity and completeness is replaced by this domination property.     

Advancing economic analysis beyond the equilibrium framework

Twentieth century economics was dominated by the development and refinement of the concept of economic equilibrium. While it is worthwhile to understand the properties of economic equilibrium, equilibrium concepts have dominated economic thought to the point that they have obscured some of the more important issues economists have always strived to understand. At least since Adam Smith’s time, economists have tried to understand the causes of prosperity, and how economic welfare can be enhanced, but these issues are best understood outside the equilibrium framework. The foundations provided by the Austrian school point toward ways that economic analysis can expand beyond the equilibrium framework.

Proposed changes to the Index of Sustainable Economic Welfare: An application to Belgium

This paper presents the results of a Belgian case study on the Index of Sustainable Economic Welfare (ISEW). The index is first compiled using the standard methodology applied in other international studies. Owing to the short period in which Belgium's ‘traditional’ ISEW has recently declined, it is not possible to draw any solid conclusion regarding Max-Neef's ‘threshold hypothesis’. After a brief review of the criticism that the ISEW has attracted over the years, the paper then explains and discusses the rationale for omitting the ‘net capital growth’ and ‘change in net international investment position’ items. It is argued that these items do not comply with the theoretical foundation underpinning the ISEW. The paper also puts forward new valuation methods for several items within the index: the escalation factor in the valuation of natural capital depletion is dropped, long-term environmental damage is valued using a stock-based approach and considerably more government expenditures are considered to be non-defensive. The results of the ‘revised’ ISEW show significant improvements in sustainable economic welfare over the entire study period. These findings are not in line with the ‘threshold hypothesis’. Finally, the paper offers some guidelines for communicating about the ISEW — namely that (a) all methodological assumptions should be made explicit and (b) all raw (unadjusted) data used should be included in any final ISEW report so as to enable the reader to make his or her own assessment about the assumptions the researcher has employed.     

The three tier strategy followed by successful European countries in the 1990s

In general, the economic performance of European countries was disappointing in the 1990s. However, country differences increased, and in some European countries economic growth matched US rates. This paper uses a set of performance indicators to carve out a group of successful European countries and to compare their economic strategies to those of the more poorly performing, big continental economies. The analysis shows that the successful countries implemented a policy mixture of cost cutting, improving institutions, and investing in future growth. We consider the first two strategy elements to be preconditions, while investment in growth drivers such as research, education and technology diffusion is the sufficient condition for long‐run growth. The difference between top and low performers is larger with respect to the dynamics of future investment than in cost cutting. In research expenditures, the top countries surpassed the big continental European countries in 1987, and have been increasing their lead steadily since that time. They are welfare states with a comprehensive social net, which they have maintained in principle, while improving institutions and incentive structures. The results are not in line with the usual twin hypotheses that high welfare costs and insufficient labour market flexibility are the main culprits in European underperformance.     

‘On the Econ within’: a reply to Daniel Hausman

This note replies to a comment by Daniel Hausman on our paper ‘Preference purification and the inner rational agent: a critique of the conventional wisdom of behavioural welfare economics’. We clarify our characterisation of behavioural welfare economics and acknowledge that Hausman does fully endorse this approach. However, we argue that Hausman’s response to our critique, like behavioural welfare economics itself, implicitly uses a model of an inner rational agent.     

Valuation in the Lab

Experimental methods have proven useful to explore the power and limits to nonmarket valuation through stated preference methods. We now understand better how people learn about and react to the incentives, institutions, and information created by surveys. This paper briefly reviews topics in experimental valuation, including ex ante bias corrections, ex post bias calibration, and examining the circumstances that strengthen or weaken the economist’s presumption of rational valuation.     

Economic gains from technology-intensive trade: an empirical assessment

National investment in technological activity is commonly justifiedin terms of the positive impacts upon productivity, internationalcompetitiveness and related aspects of national economic performance.This premise has found a supportive theoretical framework inthe new technology and growth models. Based on extended technology-gapmodels, this study examines cross-country empirical evidenceon the relationship between technology-intensive trade performance(as a proxy for technological output) and per capita economicperformance, utilising 1978 to 1992 data for around 45 nations.The results provide some support for a positive relationshipbetween trade performance and economic returns. However, theweak and often inconsistent results suggest that the unconditionalpursuit of technology-intensive trade improvements may not necessarilyhave the expected net benefits.     

Was Bentham a primitive rational choice theory predecessor?

This paper challenges the view of Jeremy Bentham as a primitive predecessor of rational choice theory and welfare economics. The psychological hedonism in Bentham is of a rather weak form – net pleasure motivates behaviour, but we are not always capable of its maximisation. Thus, the outcome of our choices is not necessarily in our best interest and the aggregation of our revealed preferences is not necessarily a good indicator of general happiness. The bottom line is that the underpinnings of Bentham's utilitarianism are better aligned with contemporary psychological theory than previously thought, which puts his ethical thinking on firmer ground.     

基于个人行为选择视角的社会停车场优化措施研究——以浙江省衢州市中心城区为例

个人行为选择反映社会停车需求,以衢州市中心城区为例实证研究个体选择对社会停车的影响程度与影响方式。通过Logit模型回归发现：社会经济特征中居住地因子,驾驶经验中出行目的、停车收费、停车时间、寻找车位时间、下车后步行时间因子,社会环境因素中停车供给、违章处罚因子是社会停车需求显著影响因子,个人社会停车需求随显著因子不同呈现时空格局差异。基于显著影响因子从停车需求结构、停车供给、停车服务、停车收费和停车管理方面提出衢州市中心城区社会停车场优化措施,最后指出衢州市区的研究对中小城市的社会停车场研究具有参考意义。     

On Microfoundations and Keynes’ Economics

Most mainstream economists regard the principles of ‘rational choice’ theory as the only foundation of economics and insist that macroeconomics be based on those principles. These include certainty or certainty-equivalence, which followers of Keynes reject. Macrofoundations of microeconomics are often proposed instead. We argue that the issue is more complex and explain why it is unlikely that a logically watertight fit between the two levels of analysis will ever be achieved. The complex interactions within and between the two levels suggest that it is unhelpful to assign foundational status to either level. We examine Keynes’ General Theory is examined as an example and compromises are found to fit the two together. It is argued that compromise is inevitable and that good theorising entails defending the compromises made.     

Economists,social reformers,and prophets: a feminist critique of economic efficiency

This article examines the concept of Pareto optimality, bringing to light some of its implicit assumptions about the nature of human agency, work, and gender. It explores the androcentric character of the economic agent and the gendered nature of neoclassical models in relation to the historical development of the concept of economic efficiency during the late 1930s. The thrust toward the development of Pareto optimality as a scientific criterion of economic welfare was a response to the methodological tensions between the clearly political nature of economics and the scientific aspirations of economists. An examination of the debates from this period illuminates some of the values that became embedded in neoclassical economics, and which are now hidden by the masks of mathematics and abstraction.     

绿色财富观:生态文明时代人类的理性选择

如果说农业文明社会是以土地资产为主流的财富观,那么工业文明社会则是以有形和无形资产为主流的财富观,而生态文明时代理应是以绿色财富为主流的财富观。本文以生态文明时代为背景,以科学发展观为指导,对绿色财富内涵特征、分类以及构建策略进行了探讨.