Economic Theory Commons^™

Axiomatic Marxian Exploitation Theory: A Survey Of The Recent Literature, Rylan Chinnock, Roberto Veneziani, Naoki Yoshihara

Economics Department Working Paper Series

In this paper we review recent developments in axiomatic studies of Marxian exploitation theory. First, given the acute controversy over the formal definition of exploitation during the 1970-1990s, we review the study of the axiomatic frame- work, which identifies some fundamental properties – technically, domain conditions – that any definition of exploitation should satisfy. Moreover, we provide a survey on the axiomatic studies about the proper measures of exploitation which coherently preserve the basic Marxian perceptions represented by two axioms, Profit- Exploitation Correspondence Principle and Class-Exploitation Correspondence Principle. Finally, we examine the relevance of the labour theory of value in …

Can Price Controls Be Optimal? The Economics Of The Energy Shock In Germany, Tom Krebs, Isabella M. Weber

Economics Department Working Paper Series

In the wake of the global energy crisis, many European countries used energy price controls to fight inflation and to stabilize the economy. Despite its wide adoption, many economists remained skepti- cal. In this paper, we argue that price controls should be part of the policy toolbox to respond to shocks to systemically important sectors because not using them can have large economic and polit- ical costs. We put forward our arguments in two steps. In a first step, we analyze the impact on the German economy and society of the global energy crisis that followed Russia’s attack on Ukraine …

Alternative Approaches To Labor Values And Prices Of Production: Theory And Evidence, Deepankar Basu, Athanasios Moraitis

Economics Department Working Paper Series

In this paper, we discuss three approaches to estimating classical prices of production(long run equilibrium prices) in both a circulating capital model and a model that includes capital stock: the Standard Interpretation of Marx’s value theory, the New Interpretation of Marx’s value theory, and the Sraffian approach to prices of production. We add two refinements to both models: (a) allowing for differential wages rates across industries; and(b) taking account of unproductive industries in labor value calculations. We implement(a) the circulating capital models using harmonized input-output data from the World Input Output Database for 37 countries for the period 2000–2014, and …

Endogenous Business Cycles And Economic Policy, Peter Skott

Economics Department Working Paper Series

This paper examines the dynamics of Keynesian models that incorporate feedback effects from the labor market to income distribution, in- vestment, aggregate demand and output. A baseline version of the model can generate endogenous growth cycles, but cumulative divergence and economic collapse also become possible for plausible parameter values. Extensions of the model that include monetary and Öscal policy show greater robustness: the local instability of the stationary point leads to limit cycles (rather than complete collapse), even when large, destabilizing changes are made to parameters describing the private sector. The robustness of the general approach is reinforced by the …

Three Essays On The Political Economy Of Cultural Production And Creative Labor, Luke Pretz

Doctoral Dissertations

This dissertation investigates the relationships between capital, cultural production, and creative labor. Essay one theorizes the basis for the intensification of pop music stardom following the introduction of on-demand streaming technology. Prior to the emergence of on-demand streaming, record labels and broadcasters had a mutualistic relationship, wherein the near cost-free music provided by record labels formed the basis for radio broadcasts, which in turn formed the basis for the consumption of that music. Following the emergence of on-demand streaming the mutualistic relationship was ruptured. Broadcasters, in the form of streaming platforms, transitioned to the cost-efficient cultivation of masses of highly …

An Economy Of Care: George Eliot's Middlemarch And Feminist Care Ethics, Madison V. Newman

Masters Theses

This thesis assesses the centrality of care relationships in George Eliot’s Middlemarch and, by doing so, seeks to provide a nuanced understanding of individual and collective morality. Using the ethics of care as a methodological framework to acknowledge the importance of care acts and successful care relations – especially those complicated by the presence of dichotomized socioeconomic hierarchies – will allow readers to engage more fully with this text, its author, her relations, her characters, and the community of readers; reading Eliot’s work from this lens will allow us to validate every interaction, every thread of connectedness, and every act …

Economic Growth In Dual And Mature Economies: Revisiting The Pasinetti And Neo-Pasinetti Theorems, Peter Skott

Economics Department Working Paper Series

This paper (i) examines the role of income distribution in the determination of the average saving rate and the growth process in dual and mature economies, and (ii) revisits the Pasinetti and neo-Pasinetti theo- rems. The profit share may influence saving because of differences in the saving rates across households (the Pasinetti theorem) or because firms retain part of their earnings (the neo-Pasinetti theorem). The two mechanisms are not mutually exclusive, and the alignment between warranted and natural growth rates in mature economies can happen through feed- back e¤ects from employment to the distribution of income.

Mmt And Policy Assignment In An Open Economy Context: Simplicity Is Useful, Oversimpliflication Not So Much, Arslan Razmi

Economics Department Working Paper Series

Modern Monetary Theory (MMT) has recently received significant attention in academic and policy circles. Critics question the sustainability of MMT-prescribed approaches to fiscal and monetary policy, especially over extended periods of time, in the presence of international financial markets, and for developing country governments that borrow in foreign currency. I formalize some of these arguments using a dynamic, open economy, Tobin-Markowitz portfolio balance environment that takes into account: (1) the role of expectations in the foreign exchange market and the feedback mechanisms between these and the exchange rate and inflation, and (2) interactions between the current account, debt accumulation, and …

A Critical Reinterpretation Of Shacklean Decision Theory, Se Ho Kwak

Economics Department Working Paper Series

Shackle was one of the representative critics of probability calculus. His alternative decision theory was mathematically reformalized by Katzner till 1990s. Following the Katzner’s reformalized framework, this paper presents a new interpretation of Shacklean theory by focusing on the common stage structure of the decision-making. This paper shows that the characteristics of Shackle-Katzner framework can be explained as: (1) the non-distributive and non-additive ordinal measure of subjective uncertainty, (2) the incomplete list of imaginable future states, (3) the valuation of “importance” reflecting various types of loss- psychology, and (4) the final choice of the action is made on the set …

A Functional Representation Of Potential Surprise Ordering, Se Ho Kwak

Economics Department Working Paper Series

In the history of economic thought, Shackle was one of the representative critics about probability based economic theory. Specifically, he constructed his own concept of subjective uncertainty called potential surprise to replace probability. In 1980s, the potential surprise is axiomatized by Katzner as Kolmogorov-styled measure defined on the 𝜎-field over the set of possible states. In this paper, potential surprise function is reconstructed as the functional representation of potential surprise ordering on the space of hypotheses about future called monad.

Inflation In Times Of Overlapping Emergencies: Systemically Significant Prices From An Input-Output Perspective, Isabella M. Weber, Jesus Lara Jauregui, Lucas Teixeira, Luiza Nassif Pires

Economics Department Working Paper Series

In the overlapping global emergencies of the pandemic, climate change and geopolitical confronta- tions, supply shocks have become frequent and inflation has returned. This raises the question how sector-specific shocks are related to overall price stability. This paper simulates price shocks in an input-output model to identify sectors which present systemic vulnerabilities for monetary stability in the US. We call these prices systemically significant. We find that in our simulations the pre-pandemic average price volatilities and the price shocks in the COVID-19 and Ukraine war inflation yield an almost identical set of systemically significant prices. The sectors with system- ically …

Systemic Cycles Of Accumulation And Chaos In The World Capitalist System: A Missing Link, Giorgos Galanis, Christian Koutny, Isabella Weber

Economics Department Working Paper Series

We re-examine the Systemic Cycles of Accumulation (SCA) of Arrighi (2010) and Arrighi and Silver (1999) which provide a framework for the analysis of the cyclical patterns of geographical expansion of trade and production and the related shifts of hegemonic power within the world capitalist system. Within the SCA framework, the last stage of a hegemonic cycle is characterized by what is called ‘systemic chaos’, however the drivers of these chaotic dynamics have not been explicitly analyzed. This article fills this gap by providing a link between the accumulation process, the spatio-temporal fix, and systemic chaos, in three steps. First, …

Growth Cycles In Mature And Dual Economies, Peter Skott

Economics Department Working Paper Series

Mature economies may experience fluctuations, but the average medium and long run growth rate matches the natural rate. Like Kaldor's neo- Keynesian models, the Marx-Goodwin tradition explains this outcome by endogenizing the distribution of income and assuming that the accumulation of capital is increasing as a function of the profit share. The application of Goodwin cycles to developing economies may be hard to justify, however. The modified Goodwin models in this paper include relative-wage norms as a central element of wage formation. Norms change endogenously, leading to path dependence (hysteresis) in the stationary solution for the employment share of the …

World Profit Rates, 1960-2019, Deepankar Basu, Julio Huato, Jesus Lara Jauregui, Evan Wasner

Economics Department Working Paper Series

In this paper we present estimates of the world profit rate using country-level data from the Extended Penn World Table 7.0 and industry-level data from the World Input Output Database. The country-aggregated world profit rate series spans the period from 1960 to 2019, and the industry-aggregated world profit rate series runs from 2000 to 2014. The country-aggregated world profit rate series displays a strong negative linear trend for the period 1960-1980 and a weaker negative linear trend from 1980 to 2019. A medium run decomposition analysis reveals that the decline in the world profit rate is driven by a decline …

Portfolio Adjustment And Panic Behavior Under True Uncertainty, Se Ho Kwak

Economics Department Working Paper Series

G.L.S. Shackle was one of the representative critics against probability- based economic theory, and influenced some Post-Keynesians and Austri- ans. During the 1980s and 1990s, his alternative framework was math- ematically reconstructed by Katzner. In this paper, we will reformalize the Shackle-Katzner framework to explain the financial decision-making of the individual. For this, the portfolio diversification between two non- monetary assets will be explained by the reformalized model introduced here, and then moved to the analysis about a case of money and a non- monetary asset. Based on these findings, a few possible scenarios of panic behavior in the portfolio …

The (Im-)Possibility Of Rational Socialism: Mises In China’S Market Reform Debate, Isabella M. Weber

Economics Department Working Paper Series

This paper investigates the long first decade of reform in China (1978-1992) to show that Mises, in particular his initiating contribution to the Socialist Calculation Debate, became relevant to the reconfiguration of China’s political economy when the reformers gave up on the late Maoist primacy of continuous revolution and adhered instead to an imperative of development and catching up. During the Cultural Revolution, Mao had rejected the notions of efficiency and rational economic management. In the late 1970s, the reformers under Deng Xiaoping’s leadership elevated these notions to highest principle. As a result, Mises’ critique that socialism could not achieve …

The Nature Of Money And The Theory Of International Trade: Thornton And Ricardo, Isabella M. Weber

Economics Department Working Paper Series

A rich recent literature reinvestigates the nature of money, but little attention has been paid to the ramifications of the ways in which we theorize money for the theory of international trade. This paper examines the logical relationship between the neutrality of money and self-balancing trade based on Henry Thornton and David Ricardo as two foundational contributions to credit and commodity money theories respectively. I show that both authors theorize trade as self-balancing whenever money is conceptualized as neutral. I distinguish two notions of the neutrality of money: ex ante and ex post neutrality. In Thornton’s Paper Credit money is …

Understanding China’S Discourse On South-South Cooperation And China-Africa Higher Education Exchange: A Field Research Study At Zhejiang Normal University’S China-Africa International Business School, Yi Sun

Doctoral Dissertations

This dissertation research attempts to distinguish China’s model from that of the traditional North-South relationship, with a focus on how China’s philosophy articulates its foreign policy and the nation’s higher education engagement with African countries. It examines the China-Africa higher education partnership in response to China’s discourse on South-South Cooperation (SSC), Africa’s human resource flows, and the benefits and constraints of current China-Africa cooperation. In order to achieve these goals, the dissertation uses one of the China-Africa partnership universities in China, Zhejiang Normal University (ZJNU) as a site for its field research. The fieldwork looks at both a student level …

The Environmental Kuznets Curve Hypothesis As A Problematic: Beyond "Falsificationism", Paul Erb

Masters Theses

Halfway into its third decade, the debate surrounding the environmental Kuznets curve (EKC) hypothesis has stalled with political economists and socio-ecologists ascendant and modernization theorists scrambling to give their apparently moribund perspective new life. But beyond the rise and fall of the EKC, there remains a second-order question and decades of data: how do the theoretical perspectives of these contenders shape what their protagonists do and don't see? How have they mistaken episodes of "talking past each other" for genuine dialogue? Which perspective has had the biggest impact on the other’s way of thinking? A qualitative and quantitative analysis compares …

Free Market Authoritarianism And The Election Of Donald Trump, Sarah Tanzi

Doctoral Dissertations

The 2016 Presidential Election of Donald Trump was unexpected by most mainstream media, political, and academic analysts. In this dissertation, I use a combination of historical analysis of economic data, polling statistics, and discourse analysis to understand Donald Trump’s rise in its historical and political context. I argue that the election of Donald Trump did not indicate a dramatic sea change in political culture, but a continuation of a decades-long process. The path to Trump’s election was laid out in structural changes in our economic, political, and cultural landscape. I argue that the coalescence of right-wing factions that brought Trump …

Three Essays On The Theory Of Environmental Regulation: Hybrid Price And Quantity Policies And Regulation In The Presence Of Co-Pollutants, Insung Son

Doctoral Dissertations

This dissertation contains three original essays in the economic theory of environmental regulation. The main motivations for this work are two problems: the design of greenhouse gas (GHG) policies when emissions of these gases interact with so-called co-pollutants and the design of hybrid price and quantity policies to deal with the uncertainty in the benefits and costs of controlling GHG emissions. Abstract Concerns about how best to control GHGs have generated intense interest in the co-benefits and adverse side-effects of climate policies. Efforts to reduce CO₂ emissions can reduce emissions of flow pollutants that are emitted along with CO …

Master's Tools And The Master's House: A Historical Analysis Exploring The Myth Of Educating For Democracy In The United States, Timothy Scott

Doctoral Dissertations

Over the past forty-years, neoliberal education reform policies in the U.S. have spurred significant resistance, often galvanized by claims that such policies undermine public education as a vital institution of U.S. democracy. Within this narrative, many activists call to “save our schools” and return them to a time when public schools served the common good. With these narratives in mind, I explore the foundational and persistent power structures that characterize the U.S. as a means to reveal the fundamental purpose of its public education system. The questions that guide my research include: (1) With an understanding that capitalism, white supremacy, …

Three Essays On The Macroeconomic Impacts Of Rent Seeking, Kurt Von Seekamm

Doctoral Dissertations

Chapter 1 of this dissertation focuses on the political economy of rent seeking. Using trading in financial markets, patent litigation and managerial privilege as descriptive examples from the modern economy, it identifies situations where rent seeking opportunities occur. The challenge of correctly distinguishing between productive activities and rent seeking activities demonstrate the empirical challenges of examining rent seeking. This chapter also suggests that in addition to the opportunity cost of physical capital, modern rent seeking has a significant opportunity cost in the form of the misallocation of human capital. Chapter 2 explores the relationship between increased rent seeking, aggregate demand, …

Three Essays On Macroeconomic Implications Of Contemporary Financial Intermediation, Hyun Woong Park

Doctoral Dissertations

This dissertation contributes to the growing literature on macroeconomic models with a financial intermediary sector. The first two chapters use the circuit of capital modeling methodology to study the relation between growth and profitability in capitalist economy where credit is essential, and the third uses a more standard macrodynamic model to investigate how securitized banking, which relies on short-term collateralized borrowing, as opposed to traditional commercial banking, generates procyclical bank leverage, which in turn leads to supply-led fluctuation in credits and ultimately to a boom-bust cycle of asset prices. In chapter 1, I extend the baseline model of circuit of …

Productive Stagnation And Unproductive Accumulation In The United States, 1947-2011., Tomas N. Rotta

Doctoral Dissertations

My doctoral research addresses the question of how productive and unproductive forms of capital accumulation interact in the United States. My contribution is to first develop a new understanding of the labor theory of value in order to better explain how financial and rentier forms of revenues relate to the wealth created in productive activities. Second, I offer an innovative analysis of historical trends regarding unproductive accumulation in the postwar United States economy. For that purpose, I propose a new methodology to estimate Marxist categories from conventional input-output matrices, national income accounts, and employment data. A core feature of my …

Solving The "Coffee Paradox": Understanding Ethiopia's Coffee Cooperatives Through Elinor Ostrom's Theory Of The Commons, Susan Ruth Holmberg

Open Access Dissertations

This dissertation evaluates the applicability of Elinor Ostrom’s theory of the commons to other forms of collective action by mapping it on a case study of the Oromia Coffee Farmers Cooperative Union in Ethiopia and its efforts to overcome the vast disparities that have long structured the global coffee commodity chain (the “Coffee Paradox”). The conclusions I draw are the following. While Ostrom’s theory has serious omissions, it also sheds much needed light on the struggles of Ethiopia’s coffee farmers to overcome their poverty. Both the design principles that Ostrom identifies for governance rules and her list of predictors for …

Three Essays On Conflict And Cooperation, Sungha Hwang

Open Access Dissertations

Conflict theory has in recent years found important applications and made contributions in fields such as economics, political sciences and evolutionary biology. Economists have examined various aspects and implications of appropriation, a typical example of conflicting economic interests, in rent-seeking models. Political scientists, focusing on political turmoil such as war, civil war and demonstration, have scrutinized the effects of conflictual outcomes on political transitions and political systems. More importantly, early human lethal conflict is being recognized as a key factor in explaining human cooperation in evolutionary biology. The first essay concerns the technical aspects of conflict theories. Two well-known forms …

Post-Marxism After Althusser: A Critique Of The Alternatives, Ceren Ozselcuk

Doctoral Dissertations 1896 - February 2014

This dissertation provides a particular Marxian class analytical political economy critique of post-Marxism. The dissertation demonstrates the ways in which different positions within post-Marxism continue to essentialize the conceptualizations of class and capitalist economy. What distinguishes this dissertation from other dominant critiques of post-Marxism is the anti-essentialist epistemological and ontological position it adopts. By adopting an anti-essentialist epistemological position the dissertation is able to demonstrate the discontinuities and continuities between post-Marxism and the Marxian tradition. The dissertation does this by reading the heterogeneous and disparate post-Marxian approaches as so many different ways to "resolve" the central tension of the Althusserian …

From Lane To Lee A Quarry's Potential, Center For Economic Development

Center for Economic Development Technical Reports

In collaboration with a student team from the Department of Landscape Architecture and Regional Planning at the University of Massachusetts Amherst, the Community Development Corporation of Lee explored the potential reuse of an industrial parcel owned by Lane Construction Corporation in Lee, Massachusetts. The 243-acre property is currently in operation as a gravel and sand operation and asphalt processing plant in Lenox Dale, north of Lee center.

Identified as one of the largest industrial zoned parcels in New England, the Lane site has great economic potential in the future development of the town and the surrounding region. However, the site …

The Film Industry Cluster Development Recommendations For Western Massachusetts, Center For Economic Development

Center for Economic Development Technical Reports

California is home to the world's largest movie clusters. It grew out of the need to extend beyond New York's confined environment. The opportunities that lay ahead were carefully planned and exploited. For Western Massachusetts to learn from this example it will have to discover a niche that can be marketed as truly worthy of attracting businesses away from established clusters. This will require a top-down approach from government bodies to ensure that a successful cluster fits wit the New England lifestyle. Current opportunities exist within factory towns that have available old mill buildings and infrastructure. Unfortunately the establishment of …