Recent Economic Thought – serie

This work offers a fresh look at the paradigmatic foundations and basic theoretical propositions of economics. Twelve authors - each of them with his own distinct contribution to economics - make a step forward by reinterpreting major areas of micro and macroeconomics in line with modern evolutionary thinking. This volume offers a unified approach to economics that allows developments in various strands of evolutionary economics to be integrated and major positions of Neoclassical Economics to be reconsidered. The chapters on "Evolutionary Macro Economics" explore macro areas such as the division of labour and knowledge, technology and institutions, population thinking, meso economics, techno-economic trajectories and industrial sectors. By telescoping structure into time, they highlight the processes of structural change and co-evolution between technologies and institutions, and provide a causal-explanatory core for a modern - evolutionary - theory of economic growth and economic development. The chapters on "Evolutionary Micro Economics" offer insights into the knowledge based theories of the firm and take up the issues of cognitive and behavioural routines.The contributions explore the processes of complex human choice, creativity, and adaptation in selective and path-dependent environments. The discussions make an essential contribution to the cognitive and behavioural foundations of modern institutional economics.

This study investigates industrial policy during a time of deregulation, privatization and a growing interest in small government. This book brings together scholarship from different countries, different institutional contexts, and different theoretical perspectives, including the neoclassical "market" approach, game theoretical models, and institutional economics.

IS-LM is perhaps the prime example of "cognitive dissonance" in economics, and is problematic to many economists. On the one hand, the IS-LM model is still taught by many academic economists or they use it to derive the AD-AS approach. On the other hand, the same economists realize the limitations of the basic IS-LM model and would not now use it for policy analysis, as they did in the past. The distinction between pedagogical and analytical efficacy is made by all the authors in this volume regarding the IS-LM model. Indeed, even those who would reject using the model for modern policy analysis still see the basic model as useful for teaching purposes. Moreover, in an augmented form, some of the authors in this volume would even see fit to use IS-LM for modern policy analysis. The model's "plasticity" has enabled it to undergo a metamorphosis into augmented form, enabling its continuing utilization in economics accordingly.

This collection assesses the development of 'Coasean Economics', those aspects of economic analysis that have evolved out of the work of Ronald Coase. Two major strands of research can be identified here: law and economics and the New Institutional Economics. While both law and economics and the analysis of institutions by no means originated with, or evolved solely from, Coase's work, it is undeniable that his contributions, particularly in "The Nature of the Firm" and "The Problem of Social Cost", played a major role in shaping the contemporary manifestations of these areas of inquiry. This volume focuses on the firm, the Coase theorem, and law and economics - those aspects of economic analysis with which Coase is most closely identified. Along with these come several essays on methodology and one on transitional economies, all against the underlying background of Coase's contributions and influence, and the implications of these for how we do economics. Taken together, this volume offers a unique perspective on 'Coasean Economics' as well as on the potential future direction of economic analysis.

Regulatory reform represents a major shift in the US Government's role toward price determination in the transportation and telecommunication industries. The resulting policy emphasizes dependence on market forces to set prices and to encourage efficient production techniques. While extensive research investigates the influence of deregulation on prices, profits and productivity, the effect on labour markets has not received the same scrutiny. Firms in these industries are of major importance to business operations in other industries because they provide the critical services of transporting goods and transmitting information. This may partly explain such extensive research on the product-market aspects of regulatory reform. Examining labour markets in the transportation and telecommunications industries is also highly warranted, as historically these industries represented some of the most heavily unionized sectors in the economy. The extent to which regulatory reform has encouraged product market competition may not necessarily result in the same degree of competition across industries.This work debates the notion that research on regulatory reform and labour markets should develop within the framework of the competitive model. It presents diverging views on wage and employment determination in distinctly different deregulated industries.

Ideas linked to rational choice theory started to appear frequently in the economics literature in the 1960s and 1970s, but the attention given to rationality widened to include commentators presenting far-reaching appraisals and critiques. The literature grew to a steady flow and spanned diverse areas of thought including socialist and "rational-choice Marxist" assessments, and other approaches including institutional, sociological, psychological, ethical, choice-theoretical, strategic, and game-theoretical treatments of rationality. This diversity of literature led to the creation of this volume. What does rationality mean? Was there some common core of meaning that held all of these seemingly disparate developments together, or were there discernable schools of thought with peculiarities that set them clearly apart from one another? The essays in this volume illustrate that diversity, and despite the variety of approaches there remains a common core of meaning that accommodates not so much a radically different set of concepts of rationality as a highly variegated array of methods and approaches to this subject.Contributors address topics of their choice on the concept of rationality in economics, and the selection of these contributors is meant to represent a variety of backgrounds and approaches.

A collection of scholarly work re-evaluating Keynes's revolution in economic thought, both in the method of macroeconomic reasoning and in policy-making. This book brings together mostly a younger generation of economists to revisit Keynes's interpretation of the classics and its impact on macroeconomic theory and policy. There has been a considerable advance in the literature re-interpreting the classics and the early neoclassical economists. Most of the contributing authors have themselves been active participants in this reinterpretation. The participation of Robert Clower, an active participant in the Keynes versus the classics debate since the 1960s, brings a particularly significant retrospective to this fresh look at the record. The text will be of interest to policy-makers and economists, especially those working in the areas of macro and monetary economics.

This volume provides insights into the political and economic forces that shape the international, sub-national and ethnic conflicts of the present post-Cold War era. The larger vision is that war must be studied as a syndrome of historical events that occur as a conjuncture of contributing causes. Each study within this volume examines a facet of the conflict process. Taken together, these facets are more than their constituent parts: theoretical political and economical models, historical studies, environmental issues, military and strategic analysis and statistical estimations. War appears as an endogenous aspect of systems of social interaction. The point of the volume is not simply to be interdisciplinary for its own sake. It aims to shed light on the internal dynamics of war and to lead to public policy to alleviate or eliminate it.

Corruption has been part of our economic and political life since ancient times. During the past few years, there has been a resurgence of interest in understanding the impact that corruption has on our societies. The objective of this volume is to stimulate further studies on corruption by providing a review of existing work in this field and raising some questions that warrant further research. Contributors to the text synthesize studies dealing with various aspects of corruption and present some new questions regarding the origin and impact of corruption. Accordingly, the volume has two aims. First, it attempts to bring together essential elements of different approaches that have been used to understand corruption. Second, many of the contributors propose a shift in the focus of studies on corruption away from bribery-type activities to corruption that results in distortion of economic policies. The text seeks to define and model corruption. The contributions in this volume examine the political economy of corruption - that is, why it continues to exist - as well as its consequences, and what measures, if any, can be brought to bear on this phenomenon.

A sequel to "Economics and Religion: Are They Distinct?", this volume presents a set of case studies of ways in which economics and theology may actually have been combined in the real world. As in the previous volume, these case studies were written first and then sent as a complete set to a second group of authors whose function was to act as a jury. The commentators were asked whether the combination of (putative) insights of theology with the (putative) scientific knowledge supplied by economics are intellectually defensible or actually fruitful. The case studies are printed in the first part of this book in roughly chronological order of their historical emergence. The interpretative essays are printed in the second part in alphabetical order.

This text develops the view that redistributing employment is a "feasible capitalist" solution, not just to the unemployment which particular groups suffer, but also to the work that others have to contend with, including many women. Putting the redistribution of employment on the policy agenda opens up debate on how to ensure a more equitable and fulfilling relationship between the ways people gain their livelihoods and the lives they lead. Growing insecurity in labour markets and changing patterns in the commodification of labour have led to a redistribution of paid and unpaid labour time as the structure of power relations, the gender order, discrimination, and state regulation have been modified. The first main trend affecting insecurity is mass unemployment and the growth of workless households. A second notable trend is a gender-based redistribution of hours worked. The third major trend is a shift from full-time waged work to full-time self-employment. Part I of this book presents the main economic theories driving the continuing divide between the intensification of work and the extension of idleness.Part II documents the ways in which the shift to mass idleness in advanced industrial countries has hit some groups particularly hard: the youngest and oldest age groups and other groups, including disabled workers, have traditionally been subject to discrimination in the labour markets. Part III provides a set of policy prescriptions.

Aiming to add to the research in the field of foreign aid, this book covers two main areas. The first involves the mechanisms through which aid influences the economies of the donor and the recipient countries; and the second looks at the country-specific assessments of the effectiveness of foreign aid. The contents of this volume are divided into four parts. Part one deals with some theoretical aspects of foreign aid, while the second part analyzes some general policy aspects. Part three turns to the donor experience and includes one paper on the Danish experience. The last part considers the recipient experience and consists of five case studies.

How successful is PPP, and its extension in the monetary model, as a measure of the equilibrium exchange rate? What are the determinants and dynamics of equilibrium real exchange rates? How can misalignments be measured, and what are their causes? What are the effects of specific policies upon the equilibrium exchange rate? The answers to these questions are important to academic theorists, policymakers, international bankers and investment fund managers. This volume encompasses all of the competing views of equilibrium exchange rate determination, from PPP, through other reduced form models, to the macroeconomic balance approach. This volume is essentially empirical: what do we know about exchange rates? The different econometric and theoretical approaches taken by the various authors in this volume lead to mutually consistent conclusions. This consistency gives us confidence that significant progress has been made in understanding what are the fundamental determinants of exchange rates and what are the forces operating to bring them back in line with the fundamentals.

The political economy of imperialism emanates from several concerns and interests. First, it departs from the fundamental premise that capitalism in its evolving forms and consolidation underlies questions and theories of imperialism and development. Second, it assumes that the foundations for a theory of imperialism and development trace to early classical writings on political economy and, in particular, to David Ricardo, Adam Smith, and Karl Marx. Third, this volume acknowledges that both positive and negative consequences accompanied the penetration of capitalism and the development of the forces and means of production throughout the world.

This text emphasizes the theoretical foundations of income inequality analysis and its extensions and applications. Following a thorough overview of the main questions that have to be addressed explicitly or implicitly when making income inequality comparisons, the volume offers a historical survey of the link between the personal and functional distributions of incomes The next chapters are devoted to a presentation of the theoretical basis of income inequality analysis and give an illuminating account of the normative, axiomatic and subjective approaches to this area and of its connections to the literature on stochastic dominance. Four studies then look at the statistical tools to be employed when assessing or ranking inequalities, whether the goal is to estimate inequality indices, derive parametric approximations to Lorenz curves or test the significance of the partial orderings that reflect Lorenz comparisons. The last nine chapters review specific issues in, and applications of, income inequality analysis.

At the very heart of the conception of the present volume lies the conviction that social economics is a highly pluralistic discipline, inspired and enriched by several often radically different world views, Schumpeterian visions, and at times even quite antagonistic social doctrines. Yet, in spite of all these differences, social economists can nevertheless be seen and also approached as some kind of economic brotherhood for various reasons dissatisfied with the austere "value-free" diet offered by the pOSitivistic neoclassical paradigm. What all social economists seem to have in common is a profound interest in values and the process of valuation in order to more fully understand both economic behavior and the possibilities of improving the economic system. Such a distinguishing characteristic is also well articulated and enshrined in Article I of the Constitution of the Association of Social Economics where we are told that the aims and objectives of the Association shall be: 1. To foster research and publication centered on the reciprocal relationship between economic science and broader questions of human dignity, ethical values, and social philosophy, [and to] encourage the efforts of all scholars who are dedicated to exploring the ethical presuppositions and implications of economic science. 2. To consider the personal and social dimensions of economic problems and to assist in the formulation of economic policies consistent with a concern for ethical values and pluralistic community and the demands of personal dignity.

David B. Smith This is a book about the application of economic theory to a unique form of social control - public utility regulation. A central theme of this work is to examine the role that economics has played in shaping the rationale and direction of regulatory practices. While economic theory has played an important role in the shaping of regulatory policy in the past, it has an even greater potential role to play in the future as the regulatory community grapples with the many challenges of a changing economic environment. This is a very timely and much needed piece of work that can serve as a reference for decision makers who are facing the challeng­ ing problems of deregulation and competition. This work is comprised of 13 selected articles that guide the reader from an initial discussion of why we decided to regulate certain industries in the first place to a specific analysis of what role economic theory has played in the electric, natural gas, telecommunications, and water indus­ tries, and whether it should be allowed to play an even more dominant role in the future. The reader is then provided with a more modern version of what economists mean by the concept of natural monopoly and a menu of policy options that will allow society to derive any benefits from such a market structure.

Warren J. Samuels Each book in this series explores the present status of its field in terms of where it is, how it got there, the existing tensions within the field, and something of how the field might develop in the future. Each book presumes that work in each field is neither settled nor unequivocal. Each book attempts to comprehend its field as an evolving, developmental process or set or efforts. This particular book, covering neoclassical economics, is the third of three in the field of the History of Economic Thought. The others are Pre-Classical Economic Thought, edited by S. Todd Lowry, and Classical Political Economy, edited by William O. Thweatt. Each one conducts the same kind of analysis as the others in the series, with the understanding that here we are dealing with the history of interpretation, rather than a substantive body of analysis of a certain aspect of the economy: for example, labor or international trade. (That understanding must be com­ plex and subtle, inasmuch as revision of interpretation of earlier ideas is part of the process-both cause and consequence-of re-analyzing the economy. ) In this group we are interested in how recent and contemporary writers have interpreted the history of economic thought differently, both among themselves and from earlier writers. 1 NEOCLASSICAL ECONOMIC lHEORY 2 Several topics must be discussed to place such work in perspective, in part as it is here applied to the history of the interpretation of neoclassical economics.

1 Warren J. Samuels The study of economics as discourse requires a perspective that focuses on the relationships among knowledge (or truth), discourse (or lan­ guage), and meaning. Central to this task is the recognition that the con­ duct of economic analysis uses words and that words embody meanings that are applied to the object of study, but do not necessarily derive from that object although they define that object for us. Knowledge Economists are engaged in efforts to understand and explain the econ­ omy. In the pursuit of this knowledge they have attempted to make coherent the respect(s) in which belief is to be accepted as knowledge, or the sense(s) in which this knowledge has the quality of "truth. " The field of methodology in economics parallels the fields of epistemology and philosophy of science in the attempt to make sense of and to prescribe the terms on which efforts at knowledge may be accepted as "true," or the terms on which statements can be accepted as "knowledge. " The conduct of such methodological inquiry typically treats economics as a science 1 2 ECONOMICS AS DISCOURSE engaged in the pursuit of truth as an epistemological category - though there have almost always been economists who were skeptical of the status of economics as a science, and the pursuit of knowledge is only one of three putative function of economics, the other two being psychic balm and social control.

Ira Horowitz Depending upon one's perspective, the need to choose among alternatives can be an unwelcome but unavoidable responsibility, an exciting and challenging opportunity, a run-of-the-mill activity that one performs seem­ ingly "without thinking very much about it," or perhaps something in between. Your most recent selections from a restaurant menu, from a set of jobs or job candidates, or from a rent-or-buy or sell-or-Iease option, are cases in point. Oftentimes we are involved in group decision processes, such as the choice of a president, wherein one group member's unwelcome responsibility is another's exciting opportunity. Many of us that voted in the presidential elections of both 1956 and 1984, irrespective of political affiliation, experienced both emotions; others just pulled the lever or punched the card without thinking very much about it. Arriving at either an individual or a group decision can sometimes be a time consuming, torturous, and traumatic process that results in a long­ regretted choice that could have been reached right off the bat. On other occasions, the "just let's get it over with and get out of here" solution to a long-festering problem can yield rewards that are reaped for many 1 ORGANIZATION AND DECISION THEORY 2 years to come. One way or another, however, individuals and organiza­ tions somehow manage to get the decision-making job done, even if they don't quite understand, and often question, just how this was accomplished.

Long before policy analysis emerged as a separate profession with its own graduate schools, economists offered advice about government policies. Positive economics provides the tools for predicting the impacts of prop­ osed policies; normative economics, especially welfare theory, offers a framework for valuing the impacts of policies in terms of efficiency and simple notions of equity. With the expansion of economic theory into ever wider fields of human behavior, it is no wonder that economists have prominence as teachers and practitioners of policy analysis. Indeed, many economists see policy analysis as essentially applied economics. Though other social scientists might object to this somewhat parochial view, economics and policy analysis share much in commom in terms of develop­ ment and prospects. The purpose of this volume is to trace these interrela­ tionships and explore the tensions that they create. Tensions arise for several reasons. Changes in the discipline of econ­ omics affect the findings, methods, and personnel offered to policy analy­ sis. For example, on the one hand, the "new institutional economics" appears to be extending the influence of economists to questions involving nonmarket oranizations, while on the other hand, the apparently growing emphasis within the economics profession on creating rather than empir­ ically testing theory suggests that fewer of the best young scholars will be drawn to policy-relevant research. Within the schools of policy analysis, the drift toward public management may reduce the demand for traditional economic training.

This volume addresses a range of issues pertaining to the presence of risk in environmental policy. Topics covered include individual perceptions of risk, the valuation of environmental risks, the reporting and discussion of risks in the media, alternative government roles in addressing environmental risks, and examples of several public policy issues involving risks - biotechnology, hazardous waste facilities, and occupational hazards. These issues are viewed in the context of collective perceptions of entitlements that determine individual and group exposures to environmental risks. The book includes contributions from scholars in the field of risk and uncertainty across a number of disciplines including decision sciences, psychology, environmental economics and risk and uncertainty.

While much has been gained from the traditional legal scholars' doctrinal mode of analysis of the takings issue, this volume is presented in the belief that contributions from scholars from the various schools of thought that comprise law and economics can complement the traditional doctrinal approach to law. As the discipline of law and economics continue to advance, it remains heterodox; there are several vantage points from which to describe and analyze the interrelationships between law and economics. It is hoped that the analyses from the several vantage points provided here will complement the prodigious body of existing doctrinal, legal analysis of the takings issue and deepen the understanding of the jurisprudential questions and economic issues surrounding the takings issue. To this end, each contributor to this volume was selected as "representative" of one of the schools of thought comprising law and economics. In addition, each was provided with a collection of recent US Supreme Court cases (summarized in Chapter 1) along with President Reagan's Executive Order.The sole charge to each contributor was to conduct a legal-economic analysis of the cases and the President's Executive Order from the vantage point of their respective school of thought.

For much of the last three decades or more, economic methodology has been dominated by the work of Karl Popper who advocated the position that science is what it is by virtue of its adherence to certain ideals. The methodology of science is therefore not empirical or descriptive, but rather a set of rules for producing "rational" or "objective" knowledge. This volume presents alternatives to an exclusively Popperian methodology; its purpose is not to reject Popper, but to show there are other ways of construing methodology. The book is divided into three parts. Part One contains two critical surveys - one dealing with the rule-based tradition which has had a great influence on economic methodology in the last three decades and the other arguing for the social conditioning of knowledge. Part Two is concerned with auxiliary hypotheses needed to link rational choice at the social and individual levels. Part Three follows up on aspects raised in linking rational choice at the social and individual levels by looking at specific issues, including rhetoric and economics and gender and economic research.

This book began when a letter reached my desk in November 1989. Written by Warren Samuels, professor of economics at Michigan State University and editor for Kluwer Academic Publishers, the letter reviewed the philosophy behind Kluwer's series on recent economic thought and accordingly expressed interest in the controversies that surround con­ temporary topics in the discipline. It graciously went on to invite me to organize, consonant with that philosophy, a volume of chapters on saving. Soon thereafter I learned that the chapters were to be original compositions. I also learned that I would have substantial flexibility in structuring the volume and in recruiting contributors, who logically would be authorities in the field. Succinctly, Samuels was inviting me to work with leading scholars in exploring the current controversies in saving, one of my favorite subjects. That invitation was simply too tempting to refuse. Preparation of the book's outline went smoothly. It was obvious that the statistics of saving should be covered along with the theories of saving. It was equally obvious that special issues must be addressed: Ricardian Equivalence, supply-side doctrine, and economic development among others. These themes should be handled so as to bring out the ideological tensions in the profession, and that criterion helped to shape the list of potential contributors. That is, both sides of a conflict should be represented, and both should be given the same treatment.

William Darity, Jr. In 1984 the Kluwer series in Modern Economic Thought, under the editorial direction of Warren Samuels, brought out a book under my editorship entitled Labor Economics: Modern Views. It consisted of a series of essays and commentaries that sought, in a critical fashion, to assess the state of the art in the field of labor economics with respect to several themes. These included methodology versus practice, the analysis of discrimination by gender and race, the phenomenon of persistent racial differences in un­ employment exposure, occupational safety and health regulation, dual versus segmented labor markets, and the remnants of the Phillips curve trade-off between unemployment and inflation. Nearly a decade later I was approached by Warren Samuels and Kluwer about editing a new book that would again address where things stand in labor economics. In proceeding with the development of this current book I was a struck by the extent to which the research thrust that was apparent in the early 1980s remains intact as we move toward the 21st century. The vast majority of scholarship in the labor subfield is dominated by the methodological orientation of applied neoclassical microeconomics, supplemented by incursions from the themes that occupy the so-called "pure theorists," particularly of the game theoretic variety.

When we first invited the group of distinguished scholars represented here to contribute to a new volume on Austrian economics, four themes were stressed: tensions, new directions, selectivity, and criticism. In this brief introduction we will explain why those themes were emphasized and thereby shed light on our intentions and aspirations for the volume. The subtitle "Tensions and New Directions" indicates clearly the intent of the volume desired. If we take the 1871 publication of Carl Menger's Principles of Economics (Grundsiitze der Volkswirthschaftslehre) as mark­ ing its birth, the Austrian tradition is now well over one hundred years old. The origins of the so-called "Austrian Revival" are more difficult to pinpoint precisely, but many would accept two decades as a reasonable estimate of its lifespan. In any case, since the mid-1970s several collections of articles written by Austrians have been published. The intent of these collections appeared to be to educate, persuade, and inspire various audiences. Uninformed readers needed to be told about the specifics of the Austrian position, to be shown how it differed from and improved upon its rivals. The initiated needed to be reassured that their commitment to a novel program was justified. As such, much of the recent Austrian literature has consisted either of exegetical accounts of the views of past figures, or of critical assessments of the positions of alternative research programs in economics from an Austrian perspective.

Marc R. Tool This book of especially solicited contributions is intended to appraise, re- fine, and extend the institutionalists' evolutionary theory of political eco- nomy in six different areas of inquiry. These areas are the institutionalist challenge to move beyond dissent, methodology of institutional econo- mics, theory of instrumental value, institutionaUst theory of labor markets, institutionalist theory of economic development, and institutionalist policymaking. This collection appears at an especially opportune time. There is wide- spread and accumulating analytical dissatisfaction with received economic doctrine (West and East) and its often abortive application to policy. The traditional neoclassical and Marxist views of how to order and operate a political economy are now heavily discounted, especially by those who must bear the brunt of flawed or ineffectual policies derived from these views. Appeals are increasingly made for more populist and pragmatic, less doctrinaire and dogmatic, approaches to problem solving. Instituti- aUsts are responding to this concern by contributing poUcy-relevant analysis.