Cambridge Journal of Economics - Advance Access

Did Kaldor anticipate the New Economic Geography? Yes, but ...

Bhattacharjea, A. — Wed, 18 Nov 2009 06:33:53 PST

After providing a self-contained introduction to the branch of mainstream economics known as the ‘New Economic Geography’ (NEG), this paper shows that many of its basic assumptions, mechanisms, results and policy prescriptions were anticipated by Nicholas Kaldor more than two decades earlier. A comparative assessment foregrounds the strengths and weaknesses of the two approaches. Kaldor inappropriately clubbed together several very different types of scale economies and failed to explain the dispersion of manufacturing activities in a satisfactory way. NEG sidesteps distributional issues, makes questionable predictions, analyses development and structural change as movements between static equilibria and ignores or caricatures history. Some seemingly fundamental methodological differences, involving Kaldor's dynamic perspective and his disdain for equilibrium analysis based on optimising ‘microfoundations’, are not irreconcilable in light of his later writings and recent extensions of NEG.

The loanable funds fallacy: saving, finance and equilibrium

Hayes, M. G. — Tue, 17 Nov 2009 04:56:47 PST

The loanable funds controversy cannot be settled without prior agreement on the meanings of income and equilibrium. The essential claim of loanable funds theory is that disequilibrium in the goods market affects the rate of interest. This paper introduces financial accounting concepts and a new understanding of the principle of effective demand to clarify that loanable funds theory relies on a concept of income other than current income, namely yesterday's income in the case of Robertson, or full-employment equilibrium income in the case of Hicks. In Robertson's case, this is a matter of bad accounting, a confusion between an income statement and a balance sheet. In Hicks's more subtle case, it is about the inapplicability of Walras’ Law to a monetary economy. Keynes's principle embodies a Marshallian concept of system equilibrium under which the goods market is treated as never in disequilibrium in the sense required by loanable funds theory.

Corporate limited liability and the financial liabilities of firms

Toporowski, J. — Thu, 12 Nov 2009 02:03:10 PST

This paper examines the recent proposal to eliminate the limited liability of company owners, in the context of the overall composition of the financial liabilities of firms. The traditional neo-classical view of the firm holds that the relative price of different financing only affects the way in which firms finance their activities. However, the paper argues that the behaviour of different firms is affected by the composition of their financial liabilities. The elimination of limited liability for equity will tend to shift the structure of corporate liabilities towards debt instruments, which do have limited liability, or towards regular insurance premiums that would reallocate that liability among firms or shareholders. The paper concludes that this shift in liabilities may stabilise financial markets, and this may eliminate some of the increasing concentration on speculation that is a feature of financial market capitalism.

How is technology made?--That is the question!

Bijker, W. E. — Wed, 11 Nov 2009 09:07:48 PST

This article reviews constructivist technology studies, and especially the social construction of technology (SCOT). To investigate how these constructivist studies regard the ontology of technology, I will trace their historical development in units of analysis, methodological approaches and research questions. Constructivist technology studies are relativistic in only one sense: methodological. They are agnostic with respect to the ontology of technology. Constructivist studies of technology thus do not primarily answer the question ‘what is technology?’; they trace the process ‘how to make technology’.

Is cumulative growth in manufacturing productivity slowing down in the EU12 regions?

Alexiadis, S., Tsagdis, D. — Tue, 10 Nov 2009 11:28:55 PST

The cumulative causation in the relation between labour productivity and output growth, known as Verdoorn's Law, is empirically tested using data from 109 EU12 regions during the period 1977–2005. Several specifications of Verdoorn's Law are put forward in this paper, which attribute the process of cumulative causation to a series of factors, including manufacturing agglomeration, spatial interaction, and responses to the problems of growth. The findings suggest that, although cumulative causation holds over this period, the slowdown of its pace is, nonetheless, apparent post 1992. Revisions in responses (e.g. policy) along with further research are thus recommended.

Distribution, aggregate demand and productivity growth: theory and empirical results for six OECD countries based on a post-Kaleckian model

Hein, E., Tarassow, A. — Tue, 10 Nov 2009 11:28:39 PST

Empirical research based on the Bhaduri/Marglin-variant of the Kaleckian model has recently shown that aggregate demand in many medium-sized and large open economies tends to be wage-led in the medium to long run, even in a period of increasing globalisation. In this paper we extend this type of analysis and integrate the effects on productivity growth, theoretically and empirically. Productivity growth is introduced into the theoretical model making use of the Verdoorn effect or of Kaldor's technical progress function and hence of a positive relationship between GDP or capital stock growth and productivity growth. Further on, a cost-push or Marx/Hicks-effect and hence a positive impact of real wage growth or the wage share on productivity growth is taken into account. In the empirical part we estimate productivity growth equations for six countries introducing these two effects. Finally, economic policy conclusions are drawn.

Capital account liberalisation and poverty: how close is the link?

Arestis, P., Caner, A. — Tue, 10 Nov 2009 11:28:20 PST

The literature on the theoretical and empirical aspects of the relationship between finance and economic growth is both substantial and extensive. The same cannot be said on the relationship between financial development and poverty reduction—an equally important aspect. In this study, we visit the theoretical arguments and conduct an empirical analysis of the relationship between the capital account dimension of financial liberalisation and poverty for developing countries for the period 1985–2005. In particular, we employ the ‘system GMM’ technique to test whether capital account liberalisation has helped alleviate poverty, and also whether the extent to which capital account liberalisation affects poverty depends on the quality of institutions. We also use OLS and IV techniques to verify our findings. Our findings indicate that there is no statistically significant relationship between the degree of capital account liberalisation during the period and the poverty rate. Developing countries with higher institutional quality have lower poverty rates, but the effect has low statistical significance. A higher degree of capital account liberalisation is associated with a lower income share for the poor.

Capital and interest in horizontal innovation models

Park, M.-S. — Mon, 09 Nov 2009 07:47:56 PST

Horizontal innovation models have a common structure of three sequentially connected sectors. This structure—production of commodities by means of commodities—necessitates the compounding of interest on an input that goes through multiple production periods before the final good is produced. I argue that this aspect is missed (or deliberately assumed away) in typical horizontal innovation models and that this practice generates internal inconsistency in relation to the long run nature of the models. Though discussion is carried out in particular reference to Barro and Sala-i-Martin's ‘lab-equipment’ model, implications are general.

The sociomateriality of organisational life: considering technology in management research

Orlikowski, W. J. — Thu, 05 Nov 2009 02:20:37 PST

Drawing on a specific scenario from a contemporary workplace, I review some of the dominant ways that management scholars have addressed technology over the past five decades. I will demonstrate that while materiality is an integral aspect of organisational activity, it has either been ignored by management research or investigated through an ontology of separateness that cannot account for the multiple and dynamic ways in which the social and the material are constitutively entangled in everyday life. I will end by pointing to some possible alternative perspectives that may have the potential to help management scholars take seriously the distributed and complex sociomaterial configurations that form and perform contemporary organisations.

Household vulnerability estimates of Roma in Southeast Europe

Milcher, S. — Wed, 04 Nov 2009 11:49:00 PST

The paper analyses household poverty and vulnerability among Roma and non-Roma in nine countries in Southeast Europe. Vulnerability to poverty is estimated by applying a model that makes use of estimated consumption and the estimated variance of consumption. The estimations suggest that vulnerability differs greatly from poverty in that it captures a larger population that is at risk. In particular, a larger share of Roma is estimated to be vulnerable than is currently observed to be poor. The results demonstrate that poverty reduction or prevention policies necessitate additional targeting of those households that are vulnerable.

Globalisation, corporate legal liability and big business houses in India

Gupta, C. D. — Tue, 29 Sep 2009 05:05:14 PDT

This paper situates the development of the limited liability partnership in India in the context of the real processes of neoliberal ‘globalisation’ and ‘liberalisation’, which will distinguish it from the idealised versions put forward by neoclassical theorists. In these processes big business has driven a particular type of ‘liberalisation’ to expand and enhance its profit opportunities, often using unorthodox methods like legal provisions for the Hindu Undivided Family to gain tax exemptions over the years of change in state policy from dirigisme to neoliberalism. The support by big business for the limited liability partnership, which apparently benefits very small partnerships, can be understood by looking at the ways in which this legal form is likely to further enhance profits by helping big business reduce its potential liabilities.

How monist is heterodoxy?

De Langhe, R. — Sat, 26 Sep 2009 04:12:19 PDT

Some heterodox economists, most notably Tony Lawson, have come under suspicion of not being true pluralists, but ‘strategic pluralists’: their advocacy of pluralism is thought to be merely instrumental to a hidden monist agenda. This paper does not aim to judge the accused but rather to assess the accusations; the focus is on clarifying the notion of pluralism itself. First a paradox is found to lie at the core of scientific pluralism. Different responses to this paradox can be traced to different views on pluralism found in the literature. The resulting classification allows an analysis of the current controversy among pluralists and provides an understanding of the different aspects of the debate.

Law, finance and development: further analyses of longitudinal data

Sarkar, P., Singh, A. — Sat, 26 Sep 2009 04:12:09 PDT

This paper analyses a longitudinal dataset on legal protection of shareholders over a 36 year period, 1970–2005, for four advanced countries, the UK, France, Germany and the USA. It examines two aspects of the legal origin hypothesis—whether shareholder protection is higher in the common law countries (UK and USA) than in the civil law countries (France and Germany) and whether shareholder protection matters for stock market development in the short and long runs. It also examines the ‘causation’ issue and the ‘endogeneity’ problem—whether greater shareholder protection leads to stock market development or whether stock market development leads to changes in law. The paper casts serious doubt on the validity of the basic theses of the Anglo Saxon legal and developmental model.

On making infrastructure visible: putting the non-humans to rights

Pinch, T. — Tue, 22 Sep 2009 08:06:14 PDT

Using the author's own experiences in local politics, the paper examines several cases in which pieces of mundane infrastructure are contested. The cases include eruvs, traffic-calming technologies, and invisible dog fences. The argument is that in contra distinction to abstract philosophical approaches to technology, the social construction of technology (SCOT) needs to return to the examination of the mundane embeddedness of technologies in everyday life. It is argued that an adequate approach to the role of the human and the non-human should not buy into a distinction between ontology and epistemology but instead should focus upon the contested interaction of humans and non-humans in everyday life and thereby restore the analysis of intentionality and meaning to its rightful place at the core of the sociology of technology.

Technological revolutions and techno-economic paradigms

Perez, C. — Tue, 15 Sep 2009 10:58:01 PDT

This paper locates the notion of technological revolutions in the neo-Schumpeterian effort to understand innovation and to identify the regularities, continuities and discontinuities in the process of innovation. It looks at the micro- and meso-foundations of the patterns observed in the evolution of technical change and at the interrelations with the context that shape the rhythm and direction of innovation. On this basis it defines technological revolutions, examines their structure and the role that they play in rejuvenating the whole economy through the application of the accompanying techno-economic paradigm. This over-arching meta-paradigm or shared best practice ‘common sense’ is in turn defined and analysed in its components and its impact, including its influence on institutional and social change.

Wage-size relation and the structure of work-force composition in Italian manufacturing firms

Bottazzi, G., Grazzi, M. — Tue, 15 Sep 2009 10:57:48 PDT

In this paper we study the impact of firms’ productivity and scale of activity on the cost of labour for Italian manufacturing firms, investigating how the work-force composition affects the total expenditures for wages. Our analysis reveals that once productivity differences among firms are accounted for, size still retains a positive effect on cost of labour. We show that the source of this phenomenon is the relatively higher proportion of non-production workers in bigger firms, which results in a cost of labour for white collar workers that increases with increasing firm size.

Comment: The nature of the ADAS model based on the ISLM model

Boyd, D. — Fri, 28 Aug 2009 04:58:52 PDT

Rao suggests that the Rowan demand curve does not exist but that result is obtained through treating the system as a simultaneous equation problem that will inevitably obtain the standard aggregate demand (AD) result. The Rowan procedure is a conditional function that makes planned AD conditional on planned aggregate supply (AS)—a quintessential Keynesian process. This results in an AS-dependent AD curve that is upward sloping. This system can be shown to be stable, have a firm connection to measures of national income accounting without dependence on notions of equilibrium and implications for econometric estimations.

Technological change in Capitalism: some Marxian themes

Smith, T. — Wed, 19 Aug 2009 06:51:26 PDT

Most social theorists agree with Adam Smith's assertion that ‘consumption is the sole end and purpose of all production’, with technology serving as a means to that end. Marx acknowledged the great benefits that capitalism's unprecedented technological dynamism has brought to humanity. For Marx, however, the ‘end and purpose’ of capitalist production is the accumulation of surplus value. From this perspective technology in capitalism is, first and foremost, a means to capital's end, valorisation, with technological change furthering human ends in a profoundly partial and precarious manner. This paper reconstructs Marx's argument in favour of this general thesis. It concludes with a discussion of three illustrations. When technological development is subsumed under the valorisation imperative, technological change in the workplace will tend to reinforce coercive and exploitative social relations. Full development of the immense potential of network technologies will be systematically hampered, and technological change will tend to generate overaccumulation and financial crises.

The role of rating agencies in financial crises: event studies from the Asian flu

El-Shagi, M. — Mon, 17 Aug 2009 12:26:28 PDT

Based on case studies from countries that have been hit hardest by the Asian financial crisis of 1997, the present paper shows that the accusation that sovereign ratings led to a severe acceleration of the crisis is unconvincing and that the empirical method often used to support accusations against rating agencies is inappropriate for the problem under analysis. Rather, it must be emphasised that ratings were downgraded in most countries very shortly before the end of the crisis. In some countries, the ratings were even further downgraded after the end of the crisis as countries started to recover. This is not in line with the thesis that the crisis was accelerated by rating agencies.

Veblen on the machine process and technological change

Latsis, J. — Mon, 17 Aug 2009 07:27:31 PDT

This paper explores Veblen's analysis of technological change. I claim that, rather than succumbing to the traditional criticisms, his approach founders due to his failure to fully articulate a social ontology. Whilst Veblen's analysis of his own time remains in many ways compelling, this failure creates a gap between meta-theoretical promise and current theoretical results. I show how work in the social studies of technology has successfully avoided the ontological problems associated with Veblenian economics. This success is tempered by the fact that the field has not yet provided an appropriate framework to systematise the ways in which technical innovations transform social relations in ways that are beyond conscious control and manipulation.

Economics, psychology and the history of consumer choice theory

Hands, D. W. — Mon, 17 Aug 2009 12:26:15 PDT

This paper examines elements of the complex place/role/influence of psychology in the history of consumer choice theory. The paper reviews, and then challenges, the standard narrative that psychology was ‘in’ consumer choice theory early in the neoclassical revolution, then strictly ‘out’ during the ordinal and revealed preference revolutions, now (possibly) back in with recent developments in experimental, behavioural and neuroeconomics. The paper uses the work of three particular economic theorists to challenge this standard narrative and then provides an alternative interpretation of the history of the relationship between psychology and consumer choice theory.

Integrating social conflict into economic theory

Vahabi, M. — Tue, 14 Jul 2009 10:00:41 PDT

The generalisation of Coasian theorem to the power relationship amounts to depicting conflict as a bargaining process between conflictual parties that are, simultaneously, both partners and adversaries. This perspective leads to different models of ‘rational conflicts’ i.e. a threat of conflict without any real clash. An alternative approach is developed by different models inspired by the Public Choice School, which build upon the logic of coercive power within the framework of a self-interested behaviour. The integration of ‘social conflicts’ in a narrowly defined individual cost/benefit theoretical framework has resulted in reducing ‘social conflict’ to real private (but not social) conflict. In other words, economic theory has considered social protesters either as potential or actual looters but rarely as a group of people struggling for a common cause. Integration of social conflict into economic theory will require: (i) abandoning the ubiquitous market model when describing conflictual relationships; (ii) accepting the logic of force or coercive power as a starting point; and (iii) expanding the idea of interest to include encompassing (including class) interest.

Board structure and executive pay: evidence from the UK

M. Guest, P. — Tue, 14 Jul 2009 10:00:26 PDT

We examine the impact of board structure on executive pay for 1,880 UK public firms over the period 1983–2002, using panel data analysis. First, the proportion of non-executive directors tends to decrease the rate of increase in executive pay whereas board size tends to increase it. Second, the proportion of non-executives strengthens the relation between the rate of increase in executive pay and changes in performance. In particular, although for firms in general the pay–performance link is much weaker when performance is poor, a higher proportion of non-executives strengthens this link considerably. Finally, firms that increase the number of non-executives in order to comply with the Cadbury Code of 1992, experience both a decline in the rate of increase in executive pay and an increase in pay–performance sensitivity.

The textility of making

Ingold, T. — Thu, 09 Jul 2009 06:10:38 PDT

Contemporary discussions of art and technology continue to work on the assumption that making entails the imposition of form upon the material world, by an agent with a design in mind. Against this hylomorphic model of creation, I argue that the forms of things arise within fields of force and flows of material. It is by intervening in these force-fields and following the lines of flow that practitioners make things. In this view, making is a practice of weaving, in which practitioners bind their own pathways or lines of becoming into the texture of material flows comprising the lifeworld. Rather than reading creativity ‘backwards’, from a finished object to an initial intention in the mind of an agent, this entails reading it forwards, in an ongoing generative movement that is at once itinerant, improvisatory and rhythmic. To illustrate what this means in practice, I compare carpentry and drawing. In both cases, making is a matter of finding the grain of the world's becoming and following its course. Historically, it was the turn from drawing lines to pulling them straight, between predetermined points, which marked the transition from the textilic to the architectonic, debasing the former as craft while elevating the latter as technology.

On the nature of technologies: knowledge, procedures, artifacts and production inputs

Dosi, G., Grazzi, M. — Wed, 01 Jul 2009 08:42:09 PDT

In the most general terms, a technology can be seen as a human-constructed means for achieving a particular end, such as the movement of goods and people, the transmission of information or the cure of a disease. These means most often entail procedures regarding how to achieve the ends concerned, particular bits of knowledge, artifacts and of course specific physical inputs necessary to yield the desired outcomes. In fact, the procedures and the underlying knowledge they draw upon, the physical and intangible inputs implicated, and the performance characteristics of outputs are different but complementary aspects of what technology is. These things are the object of this short essay.

Uncertainty and money: Keynes, Tobin and Kahn and the disappearance of the precautionary demand for money from liquidity preference theory

Cardim de Carvalho, F. J. — Mon, 08 Jun 2009 08:55:31 PDT

Keynes answered to critics of the General Theory, in 1937, that they failed to realize that there were two main innovations in that work. The first, was the relationship between money demand and uncertainty; the second was the consumption multiplier. The relation between money demand and uncertainty was in fact the main reason to explain why aggregate demand could fall short of full employment income. However, this was explained by Keynes in 1937 by recourse to a form of precautionary demand for money. In The GT, Keynes had actually merged the precautionary demand into the transactions demand for money, making it very difficult for any reader, friendly or unfriendly, to actually see what he meant in 1937. As a result, Keynes liquidity preference theory of the interest rate in the GT exhibited some important shortcomings that were the subject of many reexaminations, including one by Richard Kahn and another by James Tobin. The paper evaluates Keynes's views, Kahn's and Tobin's solutions to Keynes's dilemmas. At its conclusion it is shown why these themes remain relevant today, particularly when financial systems are in turmoil.

Technology, objects and things in Heidegger

Harman, G — Fri, 29 May 2009 19:23:28 PDT

Defending Marshall's 'masterpiece': Ralph Souter's critique of Robbins' Essay

Endres, A. M., Donoghue, M. — Thu, 14 May 2009 09:34:41 PDT

We examine Ralph W. Souter's defence, in the 1930s, of Marshall's Principles against Robbins’ attempt to recast economics as a ‘purely formal science of implications’. Souter elaborated on Marshall's invocations progressively to increase the realism of economic science and contrasted this perspective on Marshall with Robbins’ atomistic bias, neglect of historical time and irreversibilities, arbitrary restrictions on the scope of economic science and emphasis on logical and mathematical form over content. Souter demonstrates that Robbins takes a Walrasian-inspired perspective on Marshall's equilibrium concept whereas the ‘authentically Marshallian’ equilibrium notion generally incorporates potential for endogenous change. On this and other matters Souter has doctrinal priority in drawing attention to Marshall's incipient ‘evolutionary economics’.

The impact of business group affiliation on performance: evidence from China's 'national champions'

Guest, P., Sutherland, D. — Fri, 08 May 2009 06:41:26 PDT

An important aspect of China's economic reforms has been an ambitious policy to develop 100 or so large, internationally competitive business groups. Very little is known about these national champion groups or the benefits to subsidiary firms of belonging to them. This study, building from insights and methods used in existing literature, examines the performance of subsidiaries affiliated to China's national champion groups. Our results find that they perform comparatively well. We discuss possible reasons for this finding and comment more generally on the important role that business groups now play in China's reform and development.

Why do hurdle rates differ from the cost of capital?

Driver, C., Temple, P. — Thu, 07 May 2009 07:09:41 PDT

This article considers the role of hurdle rates in the analysis of investment decisions, analysing a sample of business units from the PIMS (Profit Impact of Marketing Strategy) databank of North American companies, which provides rarely observed data on hurdle rates. Although the standard literature suggests that firms should only invest if the return exceeds the cost of capital, there are several theories that explain the use of investment hurdle rates that differ from discount rates. In fact, our data show that instances where hurdle rates are either above or below the discount rate are common. In a statistical analysis, we find that this behaviour can be explained by a combination of agency theory and real options theory. We take this as important evidence that a full explanation of capital investment cannot be accomplished without a consideration of behavioural and strategic influences on the investment decision.

What's special about human technology

Aunger, R. — Thu, 30 Apr 2009 03:11:41 PDT

Human technology is difficult to understand because it is so complex. However, human technology evolved from the simpler technologies of other species. Comparison with these other technologies should illuminate why human technology is distinct. Some birds and primates make tools, or simple technological objects whose function is closely related to their form. Humans, on the other hand, make machines—relatively complex objects whose functionality derives from the interaction of parts with respect to one another (e.g. a bow and arrow). Making machines requires a cognitive advance called ‘second-order instrumentality’, or the ability to invest in the production of an object that only has utility as part of, or for the making of, other objects. This ability enabled human societies to develop specialised forms of organised production, which in turn allowed the stock of artefacts to diversify and accumulate, whereas the technological repertoires of other species remain at a relatively constant level of complexity.

Alfred Marshall on big business

Kerstenetzky, J. — Tue, 28 Apr 2009 05:01:16 PDT

The purpose of this article is to explore Marshall's perspective on the changes of size and organisation of firms in his time and, more generally, the environment of monopolistic tendencies. It examines the Marshallian evolutionary approach to business organisation as already presented in his Principles of Economics and identifies the quality of this approach as responsible for the keen perceptions made in Industry and Trade, the book in which business organisation and monopolistic tendencies are investigated. The consideration of Industry and Trade includes a comparison that identifies similarities between propositions about big business by Marshall and Alfred Chandler, the author whose work stands as the paradigm for the study of the genesis and development of big business. As an exploration of Industry and Trade, this article contributes to the assessment of a still very little studied book and draws attention to Marshall's method of combining theory and history.

Archaeologies of technology

Dobres, M.-A. — Tue, 28 Apr 2009 05:01:01 PDT

Archaeologists make use of several different ontologies to research and develop theories about ancient technology. After briefly sketching out central features of mainstream (materialist) technovisions, this essay concentrates on recent ontological trends emphasizing the ‘mutual becoming’ of people and products. Symbolic and structuralist orientations enable archaeologists to ‘see’ something of the social values and cognitive structures shaping technological traditions in the deep past. As the question of gender has become an explicit topic of interest, archaeologists are able, at long last, to theorise about ancient technicians as thinking and feeling women and men. To appreciate ancient technology ‘as if people mattered’, I outline my own preferred ontology—grounded in phenomenology and agency theory. It argues that the ancient technician's body was a mindful, sensual, socially constituted and gendered being making sense of the world—and themself—by working through it. Chaîne opératoire data on technical gestures and related strategic choices of artifact manufacture, use, and repair provide the necessary empirical and interpretive link between the making of personhood and the making and use of products within the (ancient) body politic.

Engineering and the dual nature of technical artefacts

Kroes, P. — Fri, 24 Apr 2009 07:31:08 PDT

An analysis of the descriptions of technical artefacts by engineers shows that they use structural and functional concepts in their descriptions. On the basis of this I argue that engineers use a structure-function conception of technical artefacts: technical artefacts are physical structures with functional properties. Taking into account the different nature of structural (physical) and functional properties, I put forward the claim that technical artefacts have a dual nature. This dual nature is interpreted in an epistemological and an ontological sense. In order to explicate the role of human intentions in the ontology of technical artefacts the paper closes with a brief examination of the relation between this dual nature conception of technical artefacts and Thomasson's theory of the metaphysical status of artefact kinds as mind-dependent entities.

Works councils and employment growth in German establishments

Jirjahn, U. — Tue, 21 Apr 2009 13:56:55 PDT

Using data from German manufacturing establishments, this article examines the relationship between works councils and employment growth. Taking the endogeneity of councils into account, the estimates show a positive growth effect of works councils. This suggests that the performance-enhancing voice role of German works councils dominates their monopoly role. Moreover, the findings of this study support the hypothesis that workers are more likely to implement a council to protect their quasi-rents when the establishment is facing a long-term crisis.

Little innovation, many jobs: An econometric analysis of the Italian labour productivity crisis

Lucidi, F., Kleinknecht, A. — Fri, 17 Apr 2009 07:47:14 PDT

Over the past 20 years, Italy has realised changes in labour legislation, leading to a decentralisation of wage bargaining and increased flexibility in labour relations. Both these factors have helped to curb wage growth and to enhance employment growth, but have also led to a crisis in Italian labour productivity growth. Our estimates among 3,000 firms show that firms with a high share of flexible workers, a high labour turnover and lower costs of labour (relative to capital) experienced significantly lower rates of labour productivity growth. Our findings raise doubts about the mainstream call for flexibilisation of European labour markets. We argue that the Italian shift towards a low-productive and labour-intensive growth path is problematic against the background of an ageing population.

Public debt sustainability and alternative theories of interest

Aspromourgos, T., Rees, D., White, G. — Mon, 06 Apr 2009 10:03:27 PDT

This paper reappraises sustainable trajectories of public debt and fiscal balance, with particular reference to the possible relations between the interest rate on debt and the growth rate of the economy. From the standpoint of the approach to the theory of interest proposed by Keynes—and, in a certain sense, also by Sraffa—the analysis opens up the possibility of sustaining permanent primary budget deficits. However, the extent to which this standpoint enables one to revise the spectrum of feasible empirical magnitudes for sustainable fiscal balances appears rather modest.

Accumulation of knowledge and accumulation of capital in early 'theories' of growth and development

Prendergast, R. — Tue, 31 Mar 2009 03:33:19 PDT

This paper argues that prior to Adam Smith economic progress was largely conceived as being based on the accumulation of knowledge. The development by Turgot and Smith of a concept of capital that subsumed other factors contributing to development led their followers to focus on capital to the neglect of the independent role of knowledge. The paper demonstrates that this paradigmatic shift was identified and challenged by Bentham, Hodgskin and Rae who argued for the independent role of innovation but without lasting impact.

Ambiguity and uncertainty in Ellsberg and Shackle

Basili, M., Zappia, C. — Thu, 12 Mar 2009 09:19:11 PDT

This paper argues that the similarities between Ellsberg's and Shackle's frameworks for discussing the limits of the probabilistic approach to decision theory are more important than usually admitted. The paper discusses the grounds on which the ambiguity surrounding the decision-maker in Ellsberg's urn experiments can be deemed analogous to the uncertainty faced by Shackle's entrepreneur taking ‘crucial decisions’. The two authors’ insights are assessed, and special attention is paid to the criteria for decision under uncertainty they put forward. The paper establishes a link between Ellsberg's and Shackle's perspectives and the non-additive probability approach of Gilboa and Schmeidler, an approach that offers an alternative to standard probability calculus, which can be of use to analyse both ambiguity and uncertainty. The comparison between Ellsberg and Shackle draws on an interpretation of Keynes's Treatise on Probability emphasising Keynes's rejection of both well-defined probability functions and maximisation as a guide to human conduct. It is shown that Keynes's viewpoint implies a reconsideration of the boundaries of probability theory that is in the same vein of Ellsberg's and Shackle's concern in the years of the consolidation of Savage's new probabilistic mainstream.

Structural change and the BOP-constraint: why did Latin America fail to converge?

Cimoli, M., Porcile, G., Rovira, S. — Thu, 05 Mar 2009 14:55:44 PST

This paper discusses why Latin America failed to achieve sustainable convergence with the developed world since 1960 and analyses different phases of convergence and divergence using a structuralist-Keynesian approach. First, it is argued that there are critical differences between Latin America, the developed economies and the Asian economies as regards the evolution of the income elasticity of the demand for imports (), the rate of growth of exports and the balance-of-payments-constrained rate of growth. The income elasticity of the demand for imports in Latin America showed an upward trend, particularly after the mid-1970s, which was not matched by a similar increase in exports—a pattern in sharp contrast with that of the East Asian countries. The evolution of and exports are used to set forth a typology of Latin American economic growth since 1960. In addition, the paper relates elasticities and the less favourable Latin American performance to the intensity and direction of structural change. Using a broad sample of developed and developing economies, it is shown that the developing countries that succeed in reducing the income gap are those that transformed their economic structures in favour of sectors with higher Schumpeterian and Keynesian efficiency.

Marxism and the critique of social rationality: from surplus value to the politics of technology

Feenberg, A. — Wed, 04 Mar 2009 05:25:36 PST

The most effective way to silence criticism is a justification on the very terms of the likely critique. When an action is rationally justified, how can reason deny its legitimacy? This paper concerns critical strategies that have been employed for addressing the resistance of rationality to rational critique, particularly with respect to technology. Foucault addressed this problem in his theory of power/knowledge. This paper explores Marx's anticipation of that approach in his critique of the ‘social rationality’ of the market and technology. Marx got around the silencing effect of social rationality with something very much like the concept of underdetermination in his discussion of the length of the working day. There are hints of a critique of technology in his writings as well. In the 1960s and 1970s, neo-Marxists and post-structuralists demanded radical changes in the technological rationality of advanced societies. Soon technical controversies spread, primarily through the influence of the environmental movement. The concept of underdetermination was finally formulated clearly in contemporary science and technology studies, but without explicit political purpose. Nevertheless, this revision of the academic understanding of technology contributes to weakening technocratic rationales for public policy. A new era of technical politics has begun.

Private contributions to collective concerns: modelling donor behaviour

von Kotzebue, A., Wigger, B. U. — Wed, 04 Mar 2009 05:25:27 PST

The obvious discrepancy between the predictions of the standard model of private provision of public goods and empirical indications have led many economists to search for alternative explanations of the phenomenon of voluntary contributions. Whilst concentrating on models of donor motivation, the present paper gives a non-technical survey of a sample of these approaches, and discusses their advantages and limitations.

Poverty, time and vagueness: integrating the core poverty and chronic poverty frameworks

Clark, D., Hulme, D. — Tue, 03 Mar 2009 09:00:20 PST

In recent decades there have been considerable steps forward in terms of understanding poverty. This paper identifies three ‘meta-dimensions’ of poverty, which relate to: (i) depth and severity; (ii) breadth and multidimensionality; and (iii) time and duration. The advances that have been made in terms of conceptualising, measuring and analysing poverty in each of these areas are briefly considered. It is shown that the third and final ‘meta-dimension’—time and duration—has been neglected until relatively recently. It is argued that time, and, in particular, duration is an important analytical component for understanding the experience of poverty and the processes that create and reduce poverty. The final part of the paper suggests a way of integrating time into a unified framework for understanding poverty, which can deal with the depth, breadth and duration of poverty. This involves extending Mozaffar Qizilbash's poverty and vagueness methodology to include duration.

Clarence Ayres, technology, pragmatism and progress

Mayhew, A. — Thu, 15 Jan 2009 11:14:31 PST

This paper explores the origins and continued relevance of Clarence Ayres’ definition of technology as a process involving both physical tools and a scientific method of reasoning, where science is understood to achieve cross-cultural explanatory power by virtue of technological validation. Ayres’ concept of technology derived from his training as a Pragmatist and was primarily philosophical rather than descriptive, but is congruent with the work of modern historians of technology and remains useful in addressing a variety of concerns about both the promise and dangers of technological change.

Feminist theories of technology

Wajcman, J. — Thu, 08 Jan 2009 23:43:13 PST

Feminist theories of technology have come a long way over the last quarter of a century. The expanding engagement at the intersection of feminist scholarship and science and technology studies (STS) has enriched both fields immeasurably, and I will largely focus my reflections on the literature associated with these sites. I begin by highlighting the continuities as well as the differences between contemporary and earlier feminist debates on technology. Current approaches focus on the mutual shaping of gender and technology, in which technology is conceptualised as both a source and consequence of gender relations. In avoiding both technological determinism and gender essentialism, such theories emphasise that the gender-technology relationship is fluid and situated. These deliberations highlight how processes of technical change can influence gender power relations. A feminist politics of technology is thus key to achieving gender equality.

Reality and technology

Borgmann, A. — Tue, 16 Dec 2008 13:35:47 PST

Is it possible to have a wide and deep theory of technology? Commodification provides a helpful clue. It refers to the width of the economy and suggests incisive criticism. Although it is economically precise, its moral and cultural force needs explication. In that sense it refers to the detachment of a thing or practice from its context of engagement with a time, a place, and a community. Engagement is replaced by a technological machinery. The conjunction of commodity and machinery sheds light on consumption and labour and on the discontents of life in an advanced industrial society. It also suggests a disjunctive view of the future—still more commodification or a recovery of engagement.

Limited liability, shareholder rights and the problem of corporate irresponsibility

Ireland, P. — Fri, 28 Nov 2008 20:15:41 PST

There has long been a tendency to see the corporate legal form as presently constituted as economically determined, as the more or less inevitable product of the demands of advanced technology and economic efficiency. Through an examination of its historical emergence, focusing in particular on the introduction of general limited liability and the development of the modern doctrine of separate corporate personality, this paper takes issue with this view, arguing that the corporate legal form was, and is, in large part a political construct developed to accommodate and protect the rentier investor. It is, moreover, a construct which institutionalises irresponsibility. Against this backdrop different ways of trying to resolve the problem of corporate irresponsibility are explored. The key, the paper suggests, is to be found in decoupling the privilege of limited liability from rights of control.

Post-Keynesianism meets feminist economics

van Staveren, I. — Fri, 22 Aug 2008 12:14:12 PDT

This article explores the relationships between post-Keynesian economics and feminist economics. It distinguishes three key concepts in each tradition that recommend serious attention in the other tradition: gender, the household and unpaid work and caring as key concepts in feminist economics; uncertainty, market power and endogenous dynamics as core concepts in post-Keynesian economics. This article will show, with reference to the literature in which such cross-fertilisation has been explored already, how both traditions can be enriched from a stronger mutual engagement.

Gender and the stability of consumption: a feminist contribution to post-Keynesian economics

Charusheela, S — Wed, 27 Feb 2008 01:04:48 PST

Alan Coddington critiques post-Keynesians for their use of fundamental uncertainty. He argues that fundamental uncertainty should also affect the consumption function, undermining the case for Keynesian macroeconomic policies. This paper shows how contemporary feminist theory provides post-Keynesians with a compelling response to Coddington. It uses the concept of gender as an effect of heteronormativity to integrate ‘the household’, the institution that undertakes consumption spending, into post-Keynesian economics. This gives us a more robust analysis of the sources of consumption stability in a world marked by the fundamental unknowability of the future.

Feminist and post-Keynesian economics: challenges and opportunities

Austen, S., Jefferson, T. — Fri, 23 Nov 2007 23:06:18 PST

There are significant areas of difference between feminist and post-Keynesian economics. Some feminist contributions to discussions about ontology and critical realism suggest strong reluctance to adopt realist philosophies and these provide a marked contrast with post-Keynesians' frequent appeals for economics to reflect ‘reality’. At the same time, however, some post-Keynesians are calling for a more inclusive, pluralist approach to economic research, a discussion that has areas of commonality with various feminist discussions of epistemology. Continued productive dialogue between the two traditions may be facilitated through an understanding of their contrasting ontological and epistemological debates. It may be further accommodated by growing recognition of the potential advantages of utilising plural methods to address specific research questions.