The changing face of mainstream economics

This article argues that economics is currently undergoing a fundamental shift in its method, away from neoclassical economics and into something new. Although that something new has not been fully developed, it is beginning to take form and is centered on dynamics, recursive methods and complexity theory. The foundation of this change is coming from economists who are doing cutting edge work and influencing mainstream economics. These economists are defining and laying the theoretical groundwork for the fundamental shift that is occurring in the economics profession.     

Austrian themes and the Cambridge capital theory controversies

The Review of Austrian Economics - While Austrian economists and their models were only indirectly involved in the Cambridge capital theory controversies that came to a dramatic head in 1966,...     

A Nobel Prize for Asymmetric Information: The economic contributions of George Akerlof,Michael Spence and Joseph Stiglitz

This paper reviews the research related to the asymmetric information of George Akerlof, Michael Spence and Joseph Stiglitz, for which they jointly received the 2001 Nobel Prize in Economics. After recounting their overall careers, the history of the asymmetric information idea is presented and their key papers are discussed. This is followed by an examination of various applications of the concept, including in industrial organization and microeconomic dynamics, efficiency wage theories of unem ployment, credit market rationing theory, and issues of economic development and global stability. The degree to which these latter theories can be considered to be truly Keynesian is also considered.     

Aspects of dialectics and non-linear dynamics

Three principles of dialectical analysis are examined in termsof non-linear dynamics models. The three principles are thetransformation of quantity into quality, the interpenetrationof opposites, and the negation of the negation. The first twoof these especially are interpreted within the frameworks ofcatastrophe, chaos and emergent dynamics complexity theoreticmodels, with the concept of bifurcation playing a central role.Problems with this viewpoint are also discussed.     

State-space estimation of rational bubbles in the Yen/Deutsche Mark exchange rate

State-Space Estimation of Rational Bubbles in the Yen/Deutsche Mark Exchange Rate. — This paper considers a series that uncovered interest parity predicts to be white noise and inspects it for evidence of stochastic rational bubbles. State-space methods are used that specify a bubble component of the series as an unobserved state. The technique’s effectiveness is demonstrated by Monte Carlo experiments. One span of the series is found in which a stochastic rational bubble specification clearly dominates the white noise specification. It coincides with a period of general financial turm-oil in the associated economies, i.e. Japan and Germany during 1989 and early 1990.     

The Economist Watcher: Economic Contributions of David Colander

ABSTRACT

This article gives an appraisal of the work of David Colander. After a brief biographical summary, we look at his work in methodology and the role that institutions and ‘vision’ play in his economic analysis. A crucial part of his work in this area is viewing not only the economy but also the economic profession as an adaptive complex system. This leads us to his major contributions to macroeconomics and economic education. We conclude with an overall assessment of his contributions to economics.     

POST KEYNESIAN PERSPECTIVES AND COMPLEX ECOLOGIC–ECONOMIC DYNAMICS

This paper considers the implications of complex ecologic–economic dynamics for three broad, Post Keynesian perspectives: the uncertainty perspective, the macrodynamics perspective and the Sraffian perspective. Catastrophic, chaotic and other complex dynamics will be seen as reinforcing the conceptual foundations of Keynesian uncertainty. Predator–prey models will be seen as deeply linked to Post Keynesian macrodynamic models. Finally, certain cases in ecologic–economic systems will be seen as generating such Sraffian, capital theoretic conundra as reswitching. Ecologic–economic models considered besides predator–prey will include fisheries, forestry, lake dynamics and global climatic–economic dynamics.     

Escaping the Resource Curse

According to the World Tourism Organisation (UNWTO), tourism is ‘number one in the international services trade’, accounting for 40 per cent of global trade in services and 6 per cent of total world trade.1 1. ‘Tourism – The Path Ahead’, UNWTO NEWS Year XX, Issue 3 (2006), http://www.unwto.org/newsroom/magazine/archives/news3_06_e.pdf (accessed 30 May 2007), p. 6. The tourism industry directly provides around 3 per cent of global employment, or 192 million jobs – the equivalent to one in every twelve jobs in the formal sector. The International Labour Organization (ILO) predicts that this share is likely to rise to 251.6 million jobs by 2010, or one in every eleven formal sector jobs.2 2. International Labour Organization, ‘Human Resources Development, Employment and Globalization in the Hotel, Catering and Tourism Sector’, report for discussion at the Tripartite Meeting on the Human Resources Development, Employment and Globalization in the Hotel, Catering and Tourism Sector, Geneva 2001, http://www.ilo.org/public/english/dialogue/sector/techmeet/tmhct01/tmhct-r.pdf (accessed 30 May 2007). Tourism also has an indirect impact beyond employment through tourism-related goods and services, air travel and global consumption patterns. The relevance of tourism for global political economy can no longer be ignored by analysts wishing to account for changing global patterns in poverty and inequality. Despite this, with a handful of exceptions, tourism as a significant feature of contemporary global political economy has thus far attracted little attention in the field of international political economy (IPE).3 3. See Stephen Britton, ‘The Political Economy of Tourism in the Third World’, Annals of Tourism Research, Vol. 9, No. 3 (1982), pp. 331–358; Michael Clancy, ‘Tourism and Development: Evidence from Mexico’, Annals of Tourism Research, Vol. 26, No. 1 (1999), pp. 1–20; William I. Robinson, ‘Globalisation as a Macro-Structural–Historical Framework of Analysis: The Case of Central America’, New Political Economy, Vol. 7, No. 2 (2002), pp. 221–50; Mariama Williams, ‘The Political Economy of Tourism Liberalisation, Gender and the GATS’, International Gender and Trade Network Economic Literacy Series, #4, April 2002, http://www.igtn.org/pdfs/30_TourismGATS.pdf (accessed 30 May 2007). Achieving United Nations (UN) specialised agency status in November 2003, UNWTO is the only international institution existing solely to promote the spread of the tourism industry across the globe.4 4. Address by Francesco Frangialli, Secretary-General of UNWTO, to the fifty-eighth Session of the United Nations General Assembly', New York, 7 November 2003, http://www.unwto.org/newsroom/speeches/2003/disc_sg_ag_nu_7nov03_A4.pdf (accessed 30 May 2007). Its role can be understood in a number of ways: as a campaigning organisation for the tourism industry; as a donor for tourism development projects; and as the primary source of research and statistics on global tourism.

As a result of the macroeconomic developmental benefits to be gained from the tourism industry – including employment and foreign exchange generation – a growing number of countries are generating ‘national tourism development plans’, in which tourism is seen as the foundation of a country's development.5 5. This essay draws on the author's extensive interviews with tourism development policy makers, tourism workers, private-sector representatives and civil servants in Central America. Playing a consultancy role in such strategies, UNWTO needs to be taken seriously not merely as an industry-specific UN agency, but as an organisation with the ability to influence national and international development policy, albeit within the confines of the dominant development paradigm. This essay introduces the UNWTO by analysing the emergence, structure and scope of the organisation. A review of the organisation's activities identifies two key aims that guide the institution: tourism as a tool for poverty reduction and development, and the further liberalisation of the tourism services sector. ‘Tourism development’ as framed by UNWTO is presented as a problematic process, because of the potential conflict between poverty reduction and liberalisation of the tourism industry.