Economic Theory Commons^™

Aristotle's Difficult Relationship With Modern Economic Theory, Spencer J. Pack

Economics Faculty Publications

This paper reviews Aristotle's problematic relationship with modern economic theory. It argues that in terms of value and income distribution theory, Aristotle should probably be seen as a precursor to neither classical nor neoclassical economic thought. Indeed, there are strong arguments to be made that Aristotle's views are completely at odds with all modern economic theory, since, among other things, he was not necessarily concerned with flexible market prices, opposed the use of money to acquire more money, and did not think that the unintended consequences of human activity were generally beneficial. The paper argues however, that this interpretation goes …

Utility Functions, Future Consumption Targets And Subsistence Thresholds, Ashok Guha, Brishti Guha

Research Collection School Of Economics

If the consumer’s risk aversion behavior varies intertemporally and if the risk aversion coefficient on future consumption becomes very large, the consumer tends to aim at a fixed future consumption target. A by-product is a reinterpretation of subsistence theories of consumption.

The Multiple Dimensions Of Male Social Status In An Amazonian Society, Christopher Von Rueden, Michael Gurven, Hillard Kaplan

ESI Publications

"In all human societies, individuals differ in social status depending upon their age and personal ability (Sahlins, 1958; Service, 1971). In laboratory-based small group studies, status hierarchies emerge spontaneously (Bass, 1954; Campbell et al., 2002; Kalma, 1991). Even among “egalitarian” foragers, who are characterized by widespread resource sharing (Kaplan & Gurven, 2005; Winterhalder, 1986) and some degree of status-leveling (Cashdan, 1980), certain individuals consume more resources, get the best pick of mates, and take a more central role in group decision-making (Boehm, 1999; Trigger, 1985; Wiessner, 1996). Whether implicit or overt, classification by social status is a human universal. While …

Indescribability And Asymmetric Information At The Contracting Stage, Takashi Kunimoto

Research Collection School Of Economics

Maskin and Tirole [Maskin, E., Tirole, J., 1999. Unforeseen contingencies and incomplete contracts. Review of Economic Studies, 66, 83–114] show that indescribability does not matter for contractual incompleteness when there is symmetric information both at the contracting stage and at the trading stage. Following their setup, I show that with asymmetric information at both stages, indescribability can matter.

Economics Works! Experiments In High School Classrooms, Stephen L. Jackstadt, Paul Johnson, Bart J. Wilson

Economics Faculty Articles and Research

Economic experiments are a unique form of active learning. Students apply the scientific method by testing hypotheses and discovering for themselves how markets work. The authors conducted teacher training courses in experimental economics over a three-year period and conducted surveys to track teachers' adoption of classroom experiments. This paper discusses the survey results and describes how the training was revised accordingly. The primary conclusion of this article is that classroom experiments must be compatible with the school environment; that is, they should emphasize non-monetary incentives and hand-run experiments as well as be explicitly tied to school curricula.

Why Brazil Has Not Grown: A Comparative Analysis Of Brazilian, Indian, And Chinese Economic Management, Fernando Ferrari-Filho, Anthony Petros Spanakos

Department of Political Science and Law Faculty Scholarship and Creative Works

This paper does not aim to dispute that Brazil would benefit from reforms in any or all of these areas. Rather, the paper offers a skeptical perspective on reform menus and proposes an alternative explanation for the faster growth of Brazil’s peers India and China2. The paper begins by introducing (section 1) the idea of the BRICs countries, to establish the basis for comparisons of most similar cases. It then surveys the results of a generation of Washington Consensus era growth (section 2). Although there is a considerable amount of divergence over what causes growth, it seems that something approaching …

Financial Frictions, Capital Reallocation, And Aggregate Fluctuations, Jürgen Von Hagen, Haiping Zhang

Research Collection School Of Economics

We address an important business cycle fact, i.e., the amplified and hump-shaped responses of output to productivity shocks, in a dynamic general equilibrium model with financial frictions. Models with financial frictions in the current literature have either the amplification mechanism or the propagation mechanism. Our model shows that the dynamic interaction of borrowing constraints, endogenous capital accumulation, and capital reallocation among agents with different productivity constitutes a mechanism through which the effects of productivity shock on aggregate output are amplified and propagated, more in line with the empirical evidence than other related models in the literature.

The Consequences Of Information Revealed In Auctions, Brett E. Katzman, Matthew Rhodes-Kropf

Faculty Articles

This paper considers the ramifications of post-auction competition on bidding behavior under different bid announcement policies. In equilibrium, the auctioneer’s announcement policy has two distinct effects. First, announcement entices players to signal information to their post-auction competitors through their bids. Second, announcement can lead to greater bidder participation in certain instances while limiting participation in others. Specifically, the participation effect works against the signalling effect, thus reducing the impact of signalling found in other papers. Revenue, efficiency, and surplus implications of various announcement policies are examined.

Aging And Inflammation In Two Epidemiological Worlds, Michael Gurven, Hillard Kaplan, Jeffrey Winking, Caleb Finch, Eileen M. Crimmins

ESI Publications

Humans evolved in a world with high levels of infection resulting in high mortality across the life span and few survivors to advanced ages. Under such conditions, a strong acute-phase inflammatory response was required for survival; however, inflammatory responses can also promote chronic diseases of aging. We hypothesize that global historical increases in life span at older ages are partly explained by reduced lifetime exposure to infection and subsequent inflammation. To begin a test of this hypothesis, we compare C-reactive protein (CRP); levels in two populations with different epidemiological environments: the Tsimane of Bolivia and persons in the United States. …

East Asia And Global Imbalances: Saving, Investment, And Financial Development, Hiro Ito, Menzie David Chinn

Economics Faculty Publications and Presentations

We investigate the role of budget balances, financial development and openness, in the evolution of global imbalances. Financial development – or the lack thereof – has received considerable attention as a possible contributing factor to the development of persistent and expanding current account imbalances. Several observers have argued that the depth and sophistication of US capital markets have caused capital to flow from relatively underdeveloped East Asian financial markets. In this paper, we extend our previous work by examining the effect of different types and aspects of financial development. Our cross-country analysis, encompassing a sample of 19 industrialized countries and …

Do Buyer-Size Discounts Depend On The Curvature Of The Surplus Function? Experimental Tests Of Bargaining Models, Hans-Theo Normann, Bradley J. Ruffle, Christopher M. Snyder

Dartmouth Scholarship

A number of recent theoretical papers have shown that, for buyer‐size discounts to emerge in a bargaining model, the total surplus function over which parties bargain must have certain nonlinearities. We test the theory in an experimental setting in which a seller bargains with a number of buyers of different sizes. Nonlinearities in the surplus function are generated by varying the shape of the seller's cost function. Consistent with the theory, we find that quantity discounts emerge only in the case of increasing marginal cost, corresponding to a concave surplus function. We provide additional structural estimates to help identify the …

Continuing The Great Debate: The Intrinsic Value Of The Leading Index, Seth A. Morgan

Electronic Theses and Dissertations

The following work is a look into the history and value of the composite index of leading indicators. Current and past business cycle theory is explored to demonstrate the relevance of a tool like the composite index of leading indicators. An argument that business cycle theory has not proven sufficient in explaining changes in the direction of the economy is made. The notion that the composite leading index has a proven track record of successfully predicting movements in the economy is reviewed. The conclusion becomes the idea that since theory and its forecasting counterparts have not proven a reliable method …

The Science Of Persuasion In Recent Discourse On T.R. Malthus: An Exercise In The Analysis Of Rhetoric In Economics, Laila Winner

Economics Undergraduate Honors Theses

Of all the dour portraits lining the august halls of Economics, it is that of Thomas Robert Malthus which seems perhaps to scowl the most grimly. Describing an approach or policy as Malthusian in everyday conversation conjures a host of disturbing images, bare fields and squalling babies chief among them. Such allusions provoke even stronger reactions within the discipline Malthus helped to found, ranging from Keynes's fervent championship to the sneering dismissal of Samuelson. Neither the more famous Smith nor Ricardo nor even Marx can claim to have gained in their lives what the comparatively less prolific Reverend did with …

An Economic Approach To Climate Change, Matt Bogard

Economics Faculty Publications

Economics is the study of choices, and how they are made compatible. The issue of global warming can be viewed in the context of a set of choices that lead to climate change. In a free society choices are made compatible via the price system. If prices do not reflect the true cost of carbon, then carbon intensive production and consumption choices may not be compatible given the choice sets across all members of society. For example, my choice to burn fossil fuels may be incompatible with your choice to live in a coastal area given certain climate change scenarios. …

Ape205, Section 4, Real Competition, Loose Notes, Anwar Shaikh Phd

Archives of Anwar Shaikh

This collection includes:

• Profit-rate differences across firms [Handwritten research notes citing John Cable and Dennis Mueller and contrasting static and Schumpeterian explanations of interfirm profit-rate differences, followed by related equations]. (2007, September 16).
• Classical competitive process [Handwritten analytical note deriving relationships among relative prices, profit rates, output, and capital growth]. (2008, January 18).
• Quantitative Micro Software, LLC. (2004, October 27). EViews help: Structuring a workfile [Heavily annotated software-help excerpt on dated, cross-sectional, and panel-data organization, balancing, identifiers, missing values, and restructuring].
• Data in EViews regressions [Handwritten econometric note specifying a cross-industry regression and panel error components]. (n.d.).
• Chen, P. (2008, …

Experimental Gasoline Markets, Cary A. Deck, Bart J. Wilson

Economics Faculty Articles and Research

Zone pricing in wholesale gasoline markets is a contentious topic in the public policy debate. With a controlled laboratory experiment, we investigate the competitive effects of zone pricing on consumers, retail stations, and refiners vis-à-vis the proposed policy prescription of uniform wholesale pricing to retailers. We also examine the issue of divorcement and the “rockets and feathers” phenomenon. The former is the legal restriction that refiners and retailers cannot be vertically integrated, and the latter is the perception that retail gasoline prices rise faster than they fall in response to random walk movements in the world price for oil.

Application Of The Fractal Market Hypothesis For Modelling Macroeconomic Time Series, Jonathan Blackledge

Articles

This paper explores the conceptual background to financial time series analysis and financial signal processing in terms of the Efficient Market Hypothesis. By revisiting the principal conventional approaches to market analysis and the reasoning associated with them, we develop a Fractal Market Hypothesis that is based on the application of non-stationary fractional dynamics using an operator of the type
∂² / ∂x² − σ^q(t) * ∂ ^q(t)/ ∂t^q(t)

where σ⁻¹ is the fractional diffusivity and q is the Fourier dimension which, for the topology considered, (i.e. the one-dimensional case) is related to the Fractal …

Regional Electricity In The United States, Sergio Luis Contreras

Open Access Theses & Dissertations

Elasticity coefficients are estimated for the different regions in the United States. Residential, commercial, industrial, and the nonprofit sectors are examined. Demographic, climatic, and regional variables are used to estimate electricity demand. The negative income estimator that appears when paired with the number of households estimator implies that residential electricity is an inferior good. Even though it is a substitute good, natural gas does not show any significance for any sectors in the economy.

Exchange Rates, Anwar Shaikh Phd

Archives of Anwar Shaikh

This collection includes.

• Shaikh, A., PhD. (2008, April 27). Handwritten notes titled “trade, dependency, and unequal exchange (Cortland–Cornell)” [Unpublished handwritten notes].

• Shaikh, A., PhD. (1995, July 6). Summary of my XR theory [Unpublished manuscript].

• Shaikh, A., PhD. (1992, November 19). Notes on exchange rates [Unpublished notes].

Another Example Of A Credit System That Coexists With Money, Gabriele Camera, Yiting Li

Economics Faculty Articles and Research

We study an economy in which exchange occurs pairwise, there is no commitment, and anonymous agents choose between random monetary trade or deterministic credit trade. To accomplish the latter, agents can exploit a costly technology that allows limited recordkeeping and enforcement. An equilibrium with money and credit is shown to exist if the cost of using the technology is sufficiently small. Anonymity, record-keeping and enforcement limitations also permit some incidence of default, in equilibrium.

A Revelation Principle For Dominant Strategy Implementation, Jesse Schwartz, Quan Wen

Faculty Articles

We introduce a perfect price discriminating (PPD) mechanism for allocation problems with private information. A PPD mechanism treats a seller, for example, as a perfect price discriminating monopolist who faces a price schedule that does not depend on her report. In any PPD mechanism, every player has a dominant strategy to truthfully report her private information. We establish a revelation principle for dominant strategy implementation: any outcome that can be dominant strategy implemented can also be dominant strategy implemented using a PPD mechanism. We apply this principle to derive the optimal, budget-balanced, dominant strategy mechanisms for public good provision and …

[Introduction To] The Street Porter And The Philosopher : Conversations On Analytical Egalitarianism, Sandra J. Peart, David M. Levy

Bookshelf

Adam Smith, asserting the common humanity of the street porter and the philosopher, articulated the classical economists' model of social interactions as exchanges among equals. This model had largely fallen out of favor until, recently, a number of scholars in the avant-garde of economic thought rediscovered it and rechristened it "analytical egalitarianism." In this volume, Sandra J. Peart and David M. Levy bring together an impressive array of authors to explore the ramifications of this analytical ideal and to discuss the ways in which an egalitarian theory of individuality can enable economists to reconcile ideas from opposite ends of the …

The Ethical Lacunae In Friedman's Concept Of The Manager, Jonathan B. Wight, Martin Calkins

Economics Faculty Publications

This article challenges along two lines Milton Friedman's injunction that the sole role of the business manager is to maximize profits for shareholders using all legal and ethical means. First, it shows how Friedman overly narrows the manager's moral duties to consequentialist profit maximization and thereby fails to account for a wide range of values and virtues necessary for good management. Second, it illustrates how more oblique approaches to management as well as Adam Smith's virtue-based model better capture the moral imagination and relational aspects of leadership that are critical to good management today. In the end, this article suggests …

K Stock Notes, Anwar Shaikh Phd

Archives of Anwar Shaikh

This collection includes:

• K stock notes. Unpublished manuscript notes. Author: Anwar Shaikh, PhD.
  • Contents include:
    • Notes on capital stock measurement and the construction of capital stock series.
    • Notes on the perpetual inventory method (PIM) and related capital stock calculations.
    • Notes on deflators, price indexes, and the relationship between nominal and real capital measures.
    • Notes on chain-weighted capital stock measurement and aggregation problems.
    • Notes on quality adjustment and the measurement of real capital stock.
    • Mathematical derivations and equations concerning capital accumulation, depreciation, investment, and capital-output relationships.
    • Typed and handwritten annotations concerning theoretical and empirical approaches to capital measurement.
    • Handwritten notes …

Cultural Advantages In China: Tale Of Six Cities, Florentin Smarandache, Fu Yuhua, Victor Christianto

Branch Mathematics and Statistics Faculty and Staff Publications

Nowadays, plenty of factories from Europe and other developed countries have been relocated to this country, considering its tremendous economic scale and rapid growth rate during the past three decades. But most of what happens inside the China nowadays is deeply hidden from the outside world (“the foreigners” as China people would call). This fact is partly because most reports on China were written by the so‐called fly‐high experts who are busy completing their reports despite a busy schedule. Very few books or reports were written by people inside, or at least “foreigners” who spent a few years in China. …

Trade Lecture, Anwar Shaikh Phd

Archives of Anwar Shaikh

This collection includes:

• Gallagher, K. P. (2008). Deal or no deal: Current proposals on international trade amount to deregulation in the developing world and protectionism for the rich. The Guardian.
• Barro, R. J. (1984). Changes in exchange rates and relative price levels, high inflation countries. In Macroeconomics. John Wiley and Sons.
• Machlup, F. (1950). Three concepts of the balance of payments and the so-called dollar shortage. Economic Journal, LX.
• Yeager, L. B. (1976). International monetary relations: Theory, history, and policy (2nd ed.). Harper and Row.
• Shaikh, A. (2008). Real exchange rate vs. adjusted rulcratio. …

Kalecki Eichner, Anwar Shaikh Phd

Archives of Anwar Shaikh

This collection includes:

• Shaikh, A. (n.d.). Kalecki / Eichner (Unpublished manuscript) (p. 1).
• Forman, C. (2008). Empirical studies on profits, concentration, entry, and investment (Unpublished manuscript) (pp. 2-3).
• Board of Governors of the Federal Reserve System. (2007). L.109 commercial banking (1) (Federal Reserve statistical release) (p. 4).
• Shaikh, A. (2000). Eco 204: Competition (Unpublished manuscript) (p. 5).
• Shaikh, A. (1980). Notes on Kalecki's theory of price (Unpublished manuscript) (pp. 6-10).
• Shaikh, A. (2000). New Eco 204: Price - Kalecki & PK theories (Unpublished manuscript) (p. 11).
• Shaikh, A. (2007). Unequal profit rates and theories of competition and oligopoly (Unpublished manuscript) …

Xr Chapter Book, Anwar Shaikh Phd

Archives of Anwar Shaikh

This collection includes:

• Purchasing power parity adjustments to price and quantity indexes — Shaikh, A., PhD. Unpublished manuscript, dated November 9, 2008.
• Real exchange rate vs. adjusted relative real unit labor costs — Shaikh, A., PhD. Unpublished chart, undated; underlying series extend from 1960 to 2007.
• Handwritten notes on relative cost-price of capital goods between two countries — Shaikh, A., PhD. Unpublished manuscript notes, undated.
• Solving for post-trade prices of production — Shaikh, A., PhD. Unpublished manuscript notes, dated November 1, 2008.
• Handwritten notes on the real exchange rate identity — Shaikh, A., PhD. Unpublished manuscript notes, undated.
• Annex table …

Ape205, Section 4, Real Competition, Comp. And Industrial Rates Of Return, Anwar Shaikh Phd

Archives of Anwar Shaikh

This collection includes:

• Shaikh, A. (2007, September). Competition and industrial rates of return [Annotated version 4 conference paper developing a classical-Marxian account of profit-rate equalization and testing total-capital and incremental returns with OECD and US industry data].
• Profit rate equalization theory and evidence [Annotated one-page research-note fragment outlining econometric tests based on sectoral structural premia, dynamic adjustment, unit roots, OLS, and panel methods]. (2008, February 4; originally dated January 13).

The Measurement Of Capital, Anwar Shaikh Phd

Archives of Anwar Shaikh

This collection includes:

• Unpublished manuscript, The measurement of capital, by Anwar Shaikh
• Unpublished manuscript, The measurement of capital, by Anwar Shaikh