Complexity economics,wicked problems and consumer education

Complexity economics is a promising theory for consumer education that aspires to be focused on global justice and sustainability in a profoundly complex consumer marketplace. This paper first discusses the basic tenets of complexity theory, the foundations of complexity economics, followed by an overview of normal vs. post‐normal science, including tame and wicked problems. The third part of the paper positions consumer education within normal science, explicating the assumptions of conventional neoliberal economic theory. The final part discusses the assumptions of complexity economics and how it challenges traditional economic theory. A case is made for augmenting 21st century consumer education with complexity economics, anticipating a companion paper with pedagogical details.     

Lesson practice and teachers’ views on citizenship and gender: focusing on home economics and civics in Japan

Home economics and civics as school subjects in Japan have a common feature, in that both subjects nurture a sense of citizenship at home, in the workplace and in the wider society. In addition, both have the potential to help students recognize the gender bias around them and can empower them to help make a more gender‐equal society. Focusing on this, the purpose of this report was to investigate home economics and civics teachers’ views, in order to analyse the features of the two subjects and the relationship between them. Questionnaires were sent to home economics and civics teachers of all the senior high schools in four prefectures around Japan in October 2001, and 357 samples were analysed. The results were as follows: (a) Home economics teachers and female teachers expressed more interest in lessons on gender than civics teachers and male teachers. Concerning lessons on citizenship, no statistical difference in teachers’ interest was found. (b) Topics on citizenship were learned in the fields of consumer, environment and social welfare issues in both subjects. More lessons were reported to take place in home economics than in civics. (c) In home economics, topics on gender were learned as core issues in the areas of family relations, family law and parenting. On the other hand, in family law, civics, topics on gender were taught as marginal issues in the area of basic human rights and labour issues. (d) Home economics teachers thought the goals of gender education were to empower students to overcome narrow gender roles and to strengthen self‐respect. In contrast, civics teachers thought it would empower a sense of human rights. Concerning citizenship education, teachers of both home economics and civics thought the goals would enable students to recognize social problems as their own issues and try to solve them.     

A Meta‐Analysis of General and Partial Equilibrium Simulations of Trade Liberalisation under the Doha Development Agenda

Model‐based simulation of welfare effects is commonly used to make a case for trade liberalisation and to inform participants and stakeholders in trade negotiations. However, the simulated welfare effects of trade liberalisation vary greatly, even across studies that model similar liberalisation scenarios. This undermines confidence in the reliability of model‐based simulations. A meta‐analysis of over 100 studies that model WTO Doha Development Agenda trade negotiation outcomes is employed to identify characteristics of models, databases and liberalisation experiments that influence simulated welfare effects. Meta‐regressions produce plausible results and explain a significant proportion of the variation in simulated welfare effects in a representative sample of Doha Development Agenda trade liberalisation studies. Results also reveal that many quantitative trade policy simulation studies fail to adequately document the assumptions and data on which they are based.     

The Optimal Bargain between the Elite and the Majority: Party and Managerial Ideologies as Devices to Control Politicians and Managers

We investigate problems that arise in aligning office-seeking politicians with social welfare in situations where society (or the firm) is composed of groups of different sizes with different preferences. Similar alignment issues arise in corporations where management must respond to the demands of multiple constituencies. The problems arise because the agents have a suboptimal incentive to cater to majority preferences in situations with low participation costs and to elite minority preferences in situations with high participation costs. Our paper is mainly devoted to democratic politics, in which there is no group of residual claimants who are aligned to social welfare. In democratic politics, we claim that an efficient elite-majority bargain involves the creation of competing party ideologies that serve to check opportunism by majorities in low participation-cost scenarios and by elites in high participation-cost scenarios, and in doing so align politicians with social welfare. We suggest that in non-profit firms that also lack a residual claimant, an efficient elite-majority bargain involves a parallel creation of managerial ideologies, and that such managerial ideologies may also have utility in the for-profit firm as a supplementary device to foster alignment with firm value.     

中国金融体系的脆弱性与道德风险

道德风险行为就是当签约一方不完全承担风险后果时所采取的自身效用最大化的自私行为.中国金融体系存在严重的脆弱性,根本原因也在于道德风险.政府不仅对银行提供了担保,也认为证券市场"太大而不能失败".证券市场危机往往是金融危机的先行指标,随之而来的银行危机和货币危机将决定金融危机的深度和广度.中国金融体系的道德风险已经深入到最基层的代理人,其代价将是非常惨重的.     

The economics of sustainability in the context of climate change: An overview

The emerging field of sustainable business has its roots in both science and economics—in particular the fields of environmental science and the economics of sustainability. This article provides an overview to the latter field with application to environmental damage due to climate change. The aim is to provide an economic context for the papers in this special issue. The article outlines four essential elements in what has become a vast literature in the economics of sustainability in the context of climate change. First is the dilemma in valuing the distant future which concerns the vexed issue of discounting outcomes that are expected to occur over a very long time horizon. The second is the related characteristics of uncertainty and irreversibility that create an option value in taking action. The third element is the peculiarities of natural capital (arising from the natural environment) compared with reproducible capital (things we make that are used to produce goods and services). The post-neoclassical notions of social capital and knowledge capital are also briefly mentioned. The fourth element is how to manage the global “commons”, the prime example of which is the climate. This article is written for the general business reader with an understanding of basic economic concepts and therefore avoids mathematics. References to more technical treatments are provided.     

Tariff Preferences,WTO Negotiations and the LDCs: The Case of the ‘Everything But Arms’ Initiative

By assessing the impact of the recently adopted ‘Everything But Arms’ (EBA) initiative of the EU on the Least Developed Countries (LDCs) and by showing how further multilateral trade liberalisations erode the EBA preferences and impact the LDCs, this paper attempts to uncover the LDCs’ difficult positions in the WTO trade negotiations. Due to its limited product coverage and previous preferences granted by the EU, welfare impacts of the EBA on the LDCs are shown to be small and the bulk of these gains are associated with the ‘sensitive’ products that are subject to gradual liberalisations. Moreover, these small gains are likely to disappear if the EU conducts trade policy reforms in fulfilling its WTO obligations, resulting in an actually worse‐off situation for the LDCs. Extending the analysis to a multilateral trade liberalisation scenario reinforces the above results that the LDCs may well lose due to preference erosion and higher world market prices. It concludes that other development assistance measures from developed countries should be made available to the LDCs to ease their dependency on trade preferences and to foster their supply capacities. The LDCs themselves should attempt to integrate the duty and quota‐free market access status contained in the EBA into a binding WTO agreement to secure a stable trading environment. But more importantly, in order to solve the difficulties at the root these countries should actively engage in reforming their own trade policies.     

Agents with other‐regarding preferences in the commons

We present a unified approach to study the problem of the commons for agents with other‐regarding preferences. This situation is modeled as a game with vector‐valued utilities. Several types of agents are characterized depending on the importance assigned to the components of their utility functions. We obtain the set of equilibria of the game with two types of agents, pro‐social and pro‐self, and some refinements of this set for conservative agents. The most relevant result is that only a pro‐social agent is required to avoid the tragedy of the commons, regardless of the behavior of the rest of the agents.     

LINKED RECURSIVE PREFERENCES AND OPTIMALITY

We study a class of optimization problems involving linked recursive preferences in a continuous‐time Brownian setting. Such links can arise when preferences depend directly on the level or volatility of wealth, in principal–agent (optimal compensation) problems with moral hazard, and when the impact of social influences on preferences is modeled via utility (and utility diffusion) externalities. We characterize the necessary first‐order conditions, which are also sufficient under additional conditions ensuring concavity. We also examine applications to optimal consumption and portfolio choice, and applications to Pareto optimal allocations.     

区域化福利问题之理论文献综述

长期以来,区域贸易协定问题一直被学者们所关注。它不仅影响到多边贸易体系的进展,也影响到世界各国的福利水平。文章对20世纪90年代以来有关区域化福利问题的主要理论文献分类综述,重点梳理了模型的研究方法以及相关结论,为我国今后参与区域化合作的政策抉择提供了有益参考。作者将相关理论模型总体划分为三类:以福利经济学为基点的模型、以政治经济学为基点的模型和动态化模型。     

Trade‐related Job Loss,Wage Insurance and Externalities: An Ex Ante Efficiency Rationale for Wage Insurance

The extension of adjustment assistance to those who have suffered trade‐related job displacement is widely supported on both sides of the economics of globalisation debate. The form that such assistance should take, namely wage insurance, is also the subject of wide agreement. Nevertheless, the formal economic rationales offered for such a policy are varied, including political economy arguments, equity arguments and market failure/ex post efficiency arguments. This note proposes an ex ante efficiency‐based rationale for the provision of adjustment assistance in the specific form of wage insurance. Job displacement imposes pecuniary externalities on displaced workers, which, in a complete markets setting, induce only shifts along the ex ante Pareto‐efficient frontier. However, when markets are incomplete, pecuniary externalities become welfare‐relevant. Without the possibility of diversifying or hedging the risk of pecuniary external diseconomies of job displacement using contingent claims, welfare is reduced ex ante. Wage insurance – whether publicly underwritten, privately underwritten (as in Shiller's (2003 ) ‘livelihood insurance’), or supplied on a mixed public/private basis – completes the market for contingent claims, allowing workers to diversify or hedge the risk of trade‐related pecuniary external diseconomies. By facilitating risk sharing, wage insurance removes an impediment to ex ante Pareto efficiency. Moreover, wage insurance affects not only post‐displacement behaviour by increasing the incentive to reacquire employment quickly, but it also affects pre‐displacement consumption and investment behaviour, in particular, lowering the threshold at which workers will be willing to undertake irreversible investment in industry‐specific skills.     

Recent developments in the economics of entrepreneurship

This paper serves as an introduction to the special issue of JBV on the economics of entrepreneurship. Since the beginning of the 18th century, economics has recognized the importance of entrepreneurship at both the microeconomic and macroeconomic levels. This paper reviews recent developments in the economics of entrepreneurship, discusses the principles behind the emergence of a new heterodoxy in economics, and how these new principles provide fertile grounds to further our understanding of entrepreneurship and entrepreneurial behavior. Finally, the paper reviews the contributions included in this special issue and puts them in the context of recent developments in entrepreneurship research.     

A GENERAL EQUILIBRIUM MODEL OF A MULTIFIRM MORAL‐HAZARD ECONOMY WITH FINANCIAL MARKETS

We present a general equilibrium model of a moral‐hazard economy with many firms and financial markets, where stocks and bonds are traded. Contrary to the principal‐agent literature, we argue that optimal contracting in an infinite economy is not about a tradeoff between risk sharing and incentives, but it is all about incentives. Even when the economy is finite, optimal contracts do not depend on principals’ risk aversion, but on market prices of risks. We also show that optimal contracting does not require relative performance evaluation, that the second best risk‐free interest rate is lower than that of the first best, and that the second‐best equity premium can be higher or lower than that of the first best. Moral hazard can contribute to the resolution of the risk‐free rate puzzle. Its potential to explain the equity premium puzzle is examined.     

Do trade costs in goods market lead to home bias in equities?

Two of the main puzzles in international economics are the consumption and the portfolio home biases. We solve for international equity portfolios in a two-country/two-good stochastic equilibrium model with trade costs in goods markets. We show that introducing trade costs, as suggested by Obstfeld and Rogoff [Obstfeld, M., Rogoff, K., 2000a. The Six Major Puzzles in International Macroeconomics: Is There a Common Cause? NBER Macroeconomics Annual, 15], is not sufficient to explain these two puzzles simultaneously. On the contrary, we find that trade costs create a foreign bias in portfolios for reasonable parameter values. This result is robust to the addition of non-tradable goods for standard calibrations of the preferences.     

The economics of rules of origin

Rules of origin of free trade arrangements limit the use of inputs from outside the preferential trade zone. A government negotiating a future FTAcan manipulate these rules in order to achieve national welfare objectives. The correct definition of rules of origin may help to enhance demand for domestically produced goods, promote national technological development, and maximize labour income. This paper proves that a more stringent rule of origin implies an increase of demand for the domestic factor if the substitution effect prevails over the effects caused by the decrease of the scale of operation in the domestic plant, and the reallocation of output between domestic and foreign plants. We further show that policy decisions regarding rules of origin that intertemporally maximize welfare and foster domestic technological evolution should be made at the greatest level of disaggregation that is feasible.     

Judging the morality of business practices: The influence of personal moral philosophies

Individuals' moral judgments of certain business practices and their decisions to engage in those practices are influenced by their personal moral philosophies: (a) situationists advocate striving for the best consequences possible irrespective of moral maxims; (b) subjectivists reject moral guidelines and base judgments on personal values and practical concerns; (c) absolutists assume that actions are moral, provided they yield positive consequences and conform to moral rules; (d) exceptionists prefer to follow moral dictates but allow for exceptions for practical reasons. These variations, which are based on two fundamental dimensions (concern for principles and concern for promoting human welfare) influence a variety of moral processes and have implications for ethical debates over business practices.Donelson R. Forsyth is Professor in the Department of Psychology at Virginia Commonwealth University. A social psychologist, his three major interests are affective and attributional reactions in interpersonal, education, and clinical settings, individual differences in ethical ideology, and the dynamics of interacting groups. He is the author of numerous journal articles, as well as several books dealing with social psychology, group processes, and health.     

Intentions of formally qualified and unqualified teachers to transfer norms and values in home economics teaching

Historically, home economics (HE) in general, and the consumer education sections in particular, have been criticized for transferring norms and values of conservative elites to the masses. This is in stark contrast to contemporary theoretical views of a modern HE aimed at educating emancipated and critical citizens, and also to modern curricula that emphasize the consequences of consumption rather than dogma. A previous study has indicated that formally unqualified teachers see the transfer of consumption norms and values without support in the curriculum as an important objective of HE teaching, a practice that is questionable from a democratic perspective. This follow‐up study investigates to what extent formally qualified HE teachers show intentions to transfer consumption norms and values without support in the curriculum to students, using content analysis of 201 survey responses from Swedish qualified HE teachers and comparing to data from a previously published study on formally unqualified teachers. It is concluded that the qualified teachers demonstrate intentions to transfer unsupported norms and values, though, to a lower degree than unqualified teachers. The results are interpreted by adopting a values education perspective on HE. This indicates that the observed emphasis on norms and values could be seen partly as a lack of a proficient professional metalanguage among the teachers, and partly as a consequence of the focus on developing a pre‐defined moral of consumption in HE literature. The implications on how to develop HE teacher education to reduce norm and value transfer intentions are discussed based on the empirical findings and the theoretical framework.     

老年经济学与老龄化经济学

作为新兴的经济学分支学科,老年经济学和老龄化经济学还有一些基础理论方面的问题需要研究.老年经济学和老龄化经济学是两个彼此独立又相互联系的经济学分支学科,它们彼此之间在研究对象、研究内容、基本假设和原则,以及理论支持体系等方面都存在着差别.对这些差别的认识将有助于我们对老年经济学和老龄化经济学分析的深入.     

Knowledge and attitudes of adolescents regarding home economics in Tromsø, Norway

The purpose of this study was to investigate the knowledge and attitudes of adolescents in Tromsø relating to nutrition; whether pupil behaviour and attitudes regarding nutrition had changed in the tenth grade compared with the eighth grade; and whether this was linked to pupils’ home economics lessons in grade 9. In total, 606 adolescents (321 boys and 285 girls) were studied on two different occasions – 2002 and 2005. A food frequency questionnaire focusing on 16 different food and beverage groups was used. It investigated knowledge and attitudes, the amounts of food items consumed and the socio‐economic situation of the participants and their families. The study produced interesting findings. The boys had surprisingly low knowledge of fruit and vegetables that did not change in a positive direction, between the eighth and tenth grades. The change among the girls was very small and therefore this study concludes that the teaching of home economics had no significant influence on the pupils’ knowledge of and attitudes towards eating fruit and vegetables. The study of home economics does not appear to enhance adolescents’ skills and attitudes to the extent expected from the curriculum. But there are gender differences at both grades. Changes in the home economics course are necessary to improve children's and adolescents’ knowledge and attitudes. Increased focus on the scope and variety of teaching methods will be a key to improvement. Future research is required to understand the potential of the home economics curricula to change adolescents’ knowledge about and attitudes to home economics in Norway.     

Firm Characteristics as Determinants of Capital Structures in Australia

This study investigates capital structures of Australian firms in relation to firm characteristics. Using an unbalanced panel of 367 firms observed over a 15‐year period from 1992 to 2006, our panel data regression results show that debt–asset ratio is positively related to asset tangibility but inversely related to growth prospects and business risk measured by unlevered beta of equity. We also find that although levered firms are generally more profitable than unlevered firms, profitability decreases the debt ratio of levered firms. We do not find that firm size affects the capital structure of Australian firms. These results are consistent with the pecking order and the agency cost theories but contradict the trade‐off theory.