Political aspects of the capital controversies and capitalist crises

The Cambridge controversies about the theory of capital were ultimately underpinned by a clash between two different visions of capitalism, the neoclassical view, according to which distribution depends on the supply and demand curves of capital and labor, and the post Keynesian view, according to which distribution depends on political and institutional factors instead. I shall argue that the distinction between “meritocratic capitalism” and “patrimonial capitalism,” which underpins the discussions surrounding Thomas Piketty’s Capital in the Twenty-First Century, is also connected to those two different visions of capitalism, which were behind the Cambridge controversies. These two visions of capitalism have important implications for our understanding of political power over workers, and also to our understanding of political power over land and its natural resources. The role of land and natural resources was not discussed in the Cambridge controversies, but is addressed in Piero Sraffa’s Production of Commodities, and is implied in Piketty’s inclusion of land in his definition of capital, which brings in a geographical dimension to our understanding of capitalism and capitalist crises, as I shall argue.     

Brain metastases in non-small cell lung cancer patients on epidermal growth factor receptor tyrosine kinase inhibitors: symptom and economic burden

Objective: This study describes the symptom and economic burden associated with brain metastases (BM) in patients with non-small cell lung cancer (NSCLC) receiving epidermal growth factor receptor (EGFR) tyrosine kinase inhibitors (EGFR-TKIs).

Methods: This retrospective study included adults with ≥2 medical claims, within 90 days, for lung cancer and ≥1 administration of EGFR-TKIs. Based on ICD-9 codes, patients were stratified into cohorts by type of metastases (BM, other metastases [OM], or no metastases [NM]), and by when the metastasis diagnosis occurred (synchronous or asynchronous).

Results: The population (synchronous BM [SBM]?=?24, synchronous OM [SOM]?=?23, asynchronous BM [ASBM]?=?15, asynchronous OM [ASOM]?=?49, NM?=?85) was mostly female (57%), average age 69 years (SD?=?11). SBM patients experienced more fatigue and nausea/vomiting compared with SOM and NM patients and more headaches and loss of appetite than NM patients. ASBM was associated with more fatigue, nausea/vomiting, headaches, pain/numbness, altered mental status, and seizures than NM, and more headaches and pain/numbness than ASOM. SBM patients experienced a greater increase in per-member-per-month all-cause total healthcare costs after diagnosis ($20,301) vs SOM ($9,131, p?=?.001) and NM ($2,493, p?=?.001). ASBM’s cost increase between baseline and follow-up ($7,867) did not differ from ASOM’s ($4,947, p?=?.195); both were larger than NM ($2,493, p?=?.001 and p?=?.009, respectively).

Limitations: EGFR mutation status was inferred based on EGFR-TKI treatment, not by molecular testing. Patients were from US commercial insurance plans; results may not be generalizable to other populations.

Conclusions: Among patients with EGFR-TKI-treated NSCLC, patients with BM experienced more symptoms and, when diagnosed synchronously, had significant increases in total medical costs vs patients with OM and NM. Therapeutic options with central nervous system activity may offer advantages in symptomatology and costs in EGFR-mutated patients with BM.     

Trade policy, cross-border externalities and lobbies: do linked agreements enforce more cooperative outcomes?

We analyze whether linking international cooperation in trade policy to environmental policy (or other issues with nonpecuniary externalities) promotes more cooperation in both policies, or whether cooperation in one is strengthened at the expense of the other. In the context of self-enforcing agreements, we show that if the policies are independent in the government's objective function, then linkage promotes cooperation in one policy at the expense of the policy that is easier to enforce under no-linkage. However, if the linked policies are not independent and if these policies are strategic complements, then linkage can sustain more cooperation in both issues than no-linkage. The policies are strategic complements only if (i) the production externality has cross-border effects; (ii) the weight on the externality cost is high; (iii) import competing lobbies are not “powerful”.     

Least-Cost Avoidance: The Tragedy of Common Safety

This article shows that the least-cost avoider approach in tortis not necessarily the optimal way to attain least-cost avoidancewhen accidents can be avoided by either of two parties. Whenparties do not observe each other's costs of care at the timeof the accident and are unable to determine which party is theleast-cost avoider, they fail to anticipate the outcome of theadjudication. Under these circumstances, accident avoidancebecomes a commons problem because care by each individual partyreduces the prospect of liability for both parties. As a result,parties suboptimally invest in care. We show that regulationremoves this problem and is superior to tort liability bothwhen parties act simultaneously and when they act sequentially.We further examine how different liability rules perform inthis respect. (JEL K13, K32)     

Reputation, Honesty, and Efficiency with Insider Information: an Experiment

We conduct an experimental study of sales of insider information about an asset's future value, where the insiders cannot purchase the underlying asset. We examine whether such information is purchased, the quality of the information provided, and the subsequent accuracy of purchase decisions in the underlying asset market. Our design explores whether reputation, in a repeated game of finite (but uncertain) duration, is an effective constraint on deliberate strategic misinformation. The insiders have an immediate incentive to state that the asset value is high when its true value is low. We suggest an application to insider trading in financial information markets. With fixed matching, cooperative outcomes featuring truthful revelation are frequently achieved and sustained, even though this suggests subjects have sophisticated beliefs about the beliefs and behavior of others. As a comparison, we also conduct a control treatment with random rematching. Here, information purchase is less frequent, the rate of truthful revelation decreases, and efficiency is diminished. Our results suggest that most people anticipate that others realize the potential value of a good reputation.     

Are price limits on futures markets that cool? Evidence from the Brazilian Mercantile and Futures Exchange

This article investigates the impact of price limits on theBrazilian futures markets using high frequency data. The aimis to identify whether there is an ex ante cool-off or magneteffect. For that purpose, we examine a tick-by-tick data setthat includes all contracts on the São Paulo stock indexfutures traded on the Brazilian Mercantile and Futures Exchange(BM&F) from January 1997 to December 1999. The results indicatethat, altogether, there is a dominant cool-off effect in playand that the latter is much stronger for the floor rather thanceiling price. This explains why we observe more hits to theceiling rather than to the floor in our sample despite the factit covers one of the most turbulent periods for emerging markets.We then build a trading strategy that accounts for the cool-offeffect in the conditional mean so as to demonstrate that thelatter has not only statistical but also economic significance.The Sharpe ratio is indeed way superior to the buy-and-holdbenchmarks we consider.     

Classical Surplus Theory and Heterodox Economics

It has recently been suggested that heterodox economics can benefit from an engagement with classical surplus theory. However, caution is often recommended due to the ideological concepts that are embedded in classical political economy. This article argues that many of the ideological concepts that are often attributed to classical political economy are actually not part of classical political economy, but rather of a “vulgar” form of political economy, a project that emerged after Ricardo. This vulgar project, often termed as “Ricardian economics,” is often mistakenly taken to be a development of classical political economy, but it is actually a rupture with the classical political economy of Petty, Smith, and Ricardo, as Marx, and later Sraffa, argued. Once this is acknowledged, the relationship between classical political economy and heterodox economics becomes clearer.     

Restricted Kalman filtering revisited

We propose a more compact and general derivation of results concerning the estimation of linear state space models with linear restrictions in the state vector. The resulting methodological contributions are that the restricted Kalman filtering is valid regardless of the type of linear restriction being considered, and that linear restrictions can be carried out by any type of state smoothing.