DOCSLIB.ORG

Heterodox Economics

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Heterodox Economics Heterodox economics Heterodox economics family tree. Heterodoxy is a term that may be used in contrast with orthodoxy in schools of economic thought or methodologies, that may be beyond neoclassical economics.[1][2] Heterodoxy is an umbrella term that can cover various schools of thought or theories. These might for example include institutional, evolutionary, Georgist, Austrian, feminist,[3] social, post-Keynesian (not to be confused with New Keynesian),[2] ecological, Marxian, socialist and anarchist economics, among others.[4] Economics may be called orthodox or conventional economics by its critics.[5] Alternatively, mainstream economics deals with the "rationality–individualism– equilibrium nexus" and heterodox economics is more "radical" in dealing with the "institutions–history–social structure nexus".[6] Many economists dismiss heterodox economics as "fringe" and "irrelevant",[7] with little or no influence on the vast majority of academic mainstream economists in the English-speaking world. A recent review documented several prominent groups of heterodox economists since at least the 1990s as working together with a resulting increase in coherence across different constituents.[2] Along these lines, the International Confederation of Associations for Pluralism in Economics (ICAPE) does not define "heterodox economics" and has avoided defining its scope. ICAPE defines its mission as "promoting pluralism in economics." In defining a common ground in the "critical commentary," one writer described fellow heterodox economists as trying to do three things: (1) identify shared ideas that generate a pattern of heterodox critique across topics and chapters of introductory macro texts; (2) give special attention to ideas that link methodological differences to policy differences; and (3) characterize the common ground in ways that permit distinct paradigms to develop common differences with textbook economics in different ways.[8] One study suggests four key factors as important to the study of economics by self-identified heterodox economists: history, natural systems, uncertainty, and power.[9] History A number of heterodox schools of economic thought challenged the dominance of neoclassical economics after the neoclassical revolution of the 1870s. In addition to socialist critics of capitalism, heterodox schools in this period included advocates of various forms of mercantilism, such as the American School dissenters from neoclassical methodology such as the historical school, and advocates of unorthodox monetary theories such as Social credit. Other heterodox schools active before and during the Great Depression included Technocracy and Georgism. Physical scientists and biologists were the first individuals to use energy flows to explain social and economic development. Joseph Henry, an American physicist and first secretary of the Smithsonian Institution, remarked that the "fundamental principle of political economy is that the physical labor of man can only be ameliorated by… the transformation of matter from a crude state to a artificial condition...by expending what is called power or energy."[10][11] The rise, and absorption into the mainstream of Keynesian economics, which appeared to provide a more coherent policy response to unemployment than unorthodox monetary or trade policies contributed to the decline of interest in these schools. After 1945, the neoclassical synthesis of Keynesian and neoclassical economics resulted in a clearly defined mainstream position based on a division of the field into microeconomics (generally neoclassical but with a newly developed theory of market failure) and macroeconomics (divided between Keynesian and monetarist views on such issues as the role of monetary policy). Austrians and post-Keynesians who dissented from this synthesis emerged as clearly defined heterodox schools. In addition, the Marxist and institutionalist schools remained active. Up to 1980 the most notable themes of heterodox economics in its various forms included: 1. rejection of the atomistic individual conception in favor of a socially embedded individual conception; 2. emphasis on time as an irreversible historical process; 3. reasoning in terms of mutual influences between individuals and social structures. From approximately 1980 mainstream economics has been significantly influenced by a number of new research programs, including behavioral economics, complexity economics, evolutionary economics, experimental economics, and neuroeconomics. As a consequence, some heterodox economists, such as John B. Davis, proposed that the definition of heterodox economics has to be adapted to this new, more complex reality:[12] ...heterodox economics post-1980 is a complex structure, being composed out of two broadly different kinds of heterodox work, each internally differentiated with a number of research programs having different historical origins and orientations: the traditional left heterodoxy familiar to most and the 'new heterodoxy' resulting from other science imports.[12] Rejection of neoclassical economics There is no single "heterodox economic theory"; there are many different "heterodox theories" in existence. What they all share, however, is a rejection of the neoclassical orthodoxy as representing the appropriate tool for understanding the workings of economic and social life.[13] The reasons for this rejection may vary. Some of the elements commonly found in heterodox critiques are listed below. Criticism of the neoclassical model of individual behavior One of the most broadly accepted principles of neoclassical economics is the assumption of the "rationality of economic agents". Indeed, for a number of economists, the notion of rational maximizing behavior is taken to be synonymous with economic behavior (Becker 1976, Hirshleifer 1984). When some economists' studies do not embrace the rationality assumption, they are seen as placing the analyses outside the boundaries of the Neoclassical economics discipline (Landsberg 1989, 596). Neoclassical economics begins with the a priori assumptions that agents are rational and that they seek to maximize their individual utility (or profits) subject to environmental constraints. These assumptions provide the backbone for rational choice theory. Many heterodox schools are critical of the homo economicus model of human behavior used in standard neoclassical model. A typical version of the critique is that of Satya Gabriel:[14] Neoclassical economic theory is grounded in a particular conception of human psychology, agency or decision- making. It is assumed that all human beings make economic decisions so as to maximize pleasure or utility. Some heterodox theories reject this basic assumption of neoclassical theory, arguing for alternative understandings of how economic decisions are made and/or how human psychology works. It is possible to accept the notion that humans are pleasure seeking machines, yet reject the idea that economic decisions are governed by such pleasure seeking. Human beings may, for example, be unable to make choices consistent with pleasure maximization due to social constraints and/or coercion. Humans may also be unable to correctly assess the choice points that are most likely to lead to maximum pleasure, even if they are unconstrained (except in budgetary terms) in making such choices. And it is also possible that the notion of pleasure seeking is itself a meaningless assumption because it is either impossible to test or too general to refute. Economic theories that reject the basic assumption of economic decisions as the outcome of pleasure maximization are heterodox. Shiozawa emphasizes that economic agents act in a complex world and therefore impossible for them to attain maximal utility point. They instead behave as if there are a repertories of many ready made rules, one of which they chose according to relevant situation.[15] Criticism of the neoclassical model of market equilibrium In microeconomic theory, cost- minimization by consumers and by firms implies the existence of supply and demand correspondences for which market clearing equilibrium prices exist, if there are large numbers of consumers and producers. Under convexity assumptions or under some marginal- cost pricing rules, each equilibrium will be Pareto efficient: In large economies, non- convexity also leads to quasi-equilibria that are nearly efficient. However, the concept of market equilibrium has been criticized by Austrians, post-Keynesians and others, who object to applications of microeconomic theory to real-world markets, when such markets are not usefully approximated by microeconomic models. Heterodox economists assert that micro-economic models rarely capture reality. Mainstream microeconomics may be defined in terms of optimization and equilibrium, following the approaches of Paul Samuelson and Hal Varian. On the other hand, heterodox economics may be labeled as falling into the nexus of institutions, history, and social structure.[4][16] Most recent developments Over the past two decades, the intellectual agendas of heterodox economists have taken a decidedly pluralist turn. Leading heterodox thinkers have moved beyond the established paradigms of Austrian, Feminist, Institutional-Evolutionary, Marxian, Post Keynesian, Radical, Social, and Sraffian economics—opening up new lines of analysis, criticism, and dialogue among dissenting schools of thought. This cross-fertilization of ideas is creating a new generation of scholarship in which novel combinations of heterodox ideas
Load more

Recommended publications
  • Negative Nominal Interest Rates: History and Current Proposals
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics econstor www.econstor.eu Der Open-Access-Publikationsserver der ZBW – Leibniz-Informationszentrum Wirtschaft The Open Access Publication Server of the ZBW – Leibniz Information Centre for Economics Ilgmann, Cordelius; Menner, Martin Working Paper Negative nominal interest rates: History and current proposals CAWM discussion paper / Centrum für Angewandte Wirtschaftsforschung Münster, No. 43 Provided in cooperation with: Westfälische Wilhelms-Universität Münster (WWU) Suggested citation: Ilgmann, Cordelius; Menner, Martin (2011) : Negative nominal interest rates: History and current proposals, CAWM discussion paper / Centrum für Angewandte Wirtschaftsforschung Münster, No. 43, http://hdl.handle.net/10419/51360 Nutzungsbedingungen: Terms of use: Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, The ZBW grants you, the user, the non-exclusive right to use räumlich unbeschränkte und zeitlich auf die Dauer des Schutzrechts the selected work free of charge, territorially unrestricted and beschränkte einfache Recht ein, das ausgewählte Werk im Rahmen within the time limit of the term of the property rights according der unter to the terms specified at → http://www.econstor.eu/dspace/Nutzungsbedingungen → http://www.econstor.eu/dspace/Nutzungsbedingungen nachzulesenden vollständigen Nutzungsbedingungen zu By the first use of the selected work the user agrees and vervielfältigen, mit denen die Nutzerin/der Nutzer sich
    [Show full text]
  • Micro-Foundations for Innovation Policy WRR Verkenningen 18 - 3 07-04-2008 13:08 Pagina 2
    WRR Verkenningen 18 - 3 07-04-2008 13:08 Pagina 1 Micro-foundations for Innovation Policy WRR Verkenningen 18 - 3 07-04-2008 13:08 Pagina 2 The series ‘Verkenningen’ comprises studies commissioned by the wrr that are deemed to be of such quality and importance that their publication is desirable. Responsibility for the contents and views expressed therein remains that of the authors. Scientific Council for Government Policy (wrr) Lange Vijverberg 4-5 P.O. Box 20004 2500 EA The Haque Tel. + 31 70 356 46 00 Fax+ 31 70 356 46 85 E-mail: [email protected] Internet: http://www.wrr.nl WRR Verkenningen 18 - 3 07-04-2008 13:08 Pagina 3 SCIENTIFIC COUNCIL FOR GOVERNMENT POLICY Micro-foundations for Innovation Policy B. Nooteboom and E. Stam (eds.) Amsterdam University Press, Amsterdam 2008 WRR Verkenningen 18 - 3 07-04-2008 13:08 Pagina 4 Front cover illustration: Wassily Kandinsky, Offenes Grün (1923), Roethel t. 11 n0. 704, p. 658 Cover design: Studio Daniëls, Den Haag Layout: Het Steen Typografie, Maarssen isbn 978 90 5356 582 7 nur 741 / 754 © wrr / Amsterdam University Press, The Hague / Amsterdam 2008 All rights reserved. Without limiting the rights under copyright reserved above, no part of this book may be reproduced, stored in or introduced into a retrieval system, or transmit- ted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the written permission of both the copyright owner and the author of the book. WRR Verkenningen 18 - 3 07-04-2008 13:08 Pagina 5 contents contents Preface 11 Executive
    [Show full text]
  • Structural Theory of Thermoeconomics - Luis Serra and César Torres Cuadra
    EXERGY, ENERGY SYSTEM ANALYSIS AND OPTIMIZATION – Vol. II - Structural Theory of Thermoeconomics - Luis Serra and César Torres Cuadra STRUCTURAL THEORY OF THERMOECONOMICS Luis Serra and César Torres Cuadra University of Zaragoza, Spain Keywords: thermoeconomics, analysis of energy systems, exergy, average cost, marginal cost, productive structure, structural theory Contents 1. Introduction 2. Marginal Costs 2.1. Characteristic Equations 2.2. General Equation of Marginal Cost 2.3. Generalized Fuel Impact 2.4. Lagrange Multipliers and Marginal Costs 3. Structural Theory of Thermoeconomics 3.1. Linear Model of Characteristic Equations 3.2. Average and Marginal Costs 4. Structural Theory as Standard for Thermoeconomics 4.1. Structural Theory and Exergy Cost Theory 4.1.1. Structural Theory and the Fuel–Product Model 4.2. Structural Theory and Thermoeconomic Functional Analysis 5. Applications 5.1. Local Optimization 6. Closure Glossary Bibliography Biographical Sketches Summary Characteristic equations and average and marginal costs are analyzed in this article. As a consequence the structural theory is a general mathematical formalism either for thermoeconomicUNESCO cost accounting and/or optimization– EOLSS methods, providing a common basis of comparison among the different thermoeconomic methodologies, which could be considered the standard formalism for thermoeconomics. The cost calculationSAMPLE method of the struct CHAPTERSural theory is based on the rules of mathematical derivation applied to a set of characteristic equations that determine the thermoeconomic model. In this way, as more physical and realistic information is contained in the characteristic equations, more physical significance will be contained in the costs obtained. 1. Introduction During the three decades from 1972 to 2002 various thermoeconomic methodologies have been developed.
    [Show full text]
  • Technology, Development and Economic Crisis: the Schumpeterian Legacy
    CIMR Research Working Paper Series Working Paper No. 23 Technology, development and economic crisis: the Schumpeterian legacy by Rinaldo Evangelista University of Camerino Piazza Cavour, 19/F, 62032 Camerino (IT) +39-0737-403074 [email protected] June 2015 ISSN 2052-062X Abstract This contribution aims at highlighting the complex, non-linear and potentially contradictory nature of the relationships between technological progress, economic growth and social development, in particular within the context of market based economies. The main (provocative) argument put forward in the paper is that the recent neo-Schumpeterian literature, while providing fundamental contributions to our understanding of innovation, has contributed to the rising of a positivistic reading of the relationship between technology, economy and society, with technology being able to guaranty strong economic growth and (implicitly) social welfare. This is confirmed by the fact that, contrary to other influential heterodox economic schools and Schumpeter himself, in the recent neo- Schumpeterian literature technology is only rarely associated to macroeconomic market failures such as systemic crises, structural unemployment, and the growth of social and economic inequalities. It is also argued that the emergence of a “positivistic bias” in the neo-Schumpeterian literature has been associated to the dominance of a supply-side and micro-based view of the technology-economy relationships. Key words: Technology, Innovation, Schumpeter, Development, Crisis JEL codes: B52, O00, O30. 2 1. Introduction There is no doubt that the last economic crisis, with its depth, extension and length, could have, at least in principle, the potentiality of shaking at the fundamentals the dominant neo-liberal economic thinking and policy framework.
    [Show full text]
  • Download Special Issue
    Advances in Astronomy The Solar Cycle Guest Editors: J. Javaraiah, J. P. Rozelot, and Luca Bertello The Solar Cycle Advances in Astronomy The Solar Cycle Guest Editors: J. Javaraiah, J. P. Rozelot, and Luca Bertello Copyright © 2012 Hindawi Publishing Corporation. All rights reserved. This is a special issue published in “Advances in Astronomy.” All articles are open access articles distributed under the Creative Com- mons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. Editorial Board Cesare Barbieri, Italy Martin Hardcastle, UK Valery Nakariakov, UK Joshua S. Bloom, USA Dean Hines, USA Jerome Orosz, USA Michael Brotherton, USA Dieter Horns, Germany George Pavlov, USA Giovanni Carraro, Italy Ivan Hubeny, USA Juri Poutanen, Finland Alberto J. Castro-Tirado, Spain John Hughes, USA Somak Raychaudhury, UK Michael Disney, UK Wing Huen Ip, Taiwan William Reach, USA Elmetwally Elabbasy, Egypt Valentina Klochkova, Russia Peter Roming, USA Nye Evans, UK Gregory Laughlin, USA Ata Sarajedini, USA Maurizio Falanga, Switzerland Myung G. Lee, Republic of Korea Regina Schulte-Ladbeck, USA Duncan Forbes, Australia Karen Leighly, USA Ravi Sheth, USA Andrew Fruchter, USA Jeffrey Linsky, USA Roberto Turolla, Italy B. T. Gansicke,¨ UK Mario Mateo, USA Gary Wegner, USA Paul Goldsmith, USA Ronald Mennickent, Chile Glenn J. White, UK Jonathan Grindlay, USA Zdzislaw E. Musielak, USA Paul J. Wiita, USA Contents The Solar Cycle,J.Javaraiah,J.P.Rozelot,andLucaBertello Volume 2012, Article ID 470631, 2 pages The Faint Young Sun Paradox: A Simplified Thermodynamic Approach, F. Angulo-Brown, MarcoA.Rosales,andM.A.Barranco-Jimenez´ Volume 2012, Article ID 478957, 10 pages Tendency of Discreteness of the Solar Amplitude and Intercycle Relatedness, Akio Yoshida and Ryan Sayre Volume 2012, Article ID 519852, 7 pages Rapid Disappearance of Penumbra-Like Features near a Flaring Polarity Inversion Line: The Hinode Observations, B.
    [Show full text]
  • Changing Money: Communities, Longer Term Finance and You Transcript
    Changing Money: Communities, Longer Term Finance and You Transcript Date: Tuesday, 16 November 2010 - 12:00AM Location: Museum of London Changing Money: Communities, Longer Term Finance and You Ian Harris, Z/Yen Group 16/11/2010 Good evening Ladies and Gentlemen. I am honoured to have been invited to deliver this third and final guest Gresham Lecture in the "Beyond Crisis" series. This lecture is entitled "Changing Money: Communities, Longer Term Finance & You". Cattle and Pens [SLIDE: OMO VALLEY COMMUNITY SCHOOL] When my partner, Janie, and I travel in the developing world, it has long been our habit to take a healthy supply of basic, ball- point pens with us to give as gifts to children as a small contribution towards their education and therefore development. We are old hands at this now - we learnt many years ago that simply handing pens to children at random is not an educational gift at all, but a gift akin to money. The ball-point pen is a valuable commodity which can be exchanged for other more instantly gratifying items, such as sweets. Or perhaps even cash. In recent years, we have preferred to give the pens through schools, where we are more confident that the teachers will ensure that the children actually use the pens themselves for educational purposes. When we went to Ethiopia a few years ago, we 'struck gold' in a Karo village in the South Omo Valley. The Government had just built the village its first school, which was due to open later that year. But the Government had run out of money for this project before providing consumables for the school.
    [Show full text]
  • An Alternative Methodological Approach to Value Analysis of Regions, Municipal Corporations and Clusters
    ACTA UNIVERSITATIS AGRICULTURAE ET SILVICULTURAE MENDELIANAE BRUNENSIS Volume LIX 35 Number 4, 2011 AN ALTERNATIVE METHODOLOGICAL APPROACH TO VALUE ANALYSIS OF REGIONS, MUNICIPAL CORPORATIONS AND CLUSTERS M. Sabolovič Received: March 8, 2011 Abstract SABOLOVIČ, M.: An alternative methodological approach to value analysis of regions, municipal corporations and clusters. Acta univ. agric. et silvic. Mendel. Brun., 2011, LIX, No. 4, pp. 295–300 The paper deals with theoretical conception of value analysis of regions, municipal corporations and clusters. The subject of this paper is heterodox approach to sensitivity analysis of fi nite set of variables based on non-additive measure. For dynamic analysis of trajectory of general value are suffi cient robust models based on maximum entropy principle. Findings concern explanation of proper fuzzy integral – Choquet integral. The fuzzy measure is represented by theory of capacities (Choquet, 1953) on powerset. In fi ne, the conception of the New integral for capacities (Lehler, 2005) is discussed. Value analysis and transmission constitutes remarkable aspect of performance evaluation of regions, municipal corporations and clusters. In the light of high ratio of so variables, social behavior, intangible assets and human capital within those types of subjects the fuzzy integral introduce useful tool for modeling. The New integral a erwards concerns considerable characteristic of people behavior – risk averse articulated concave function and non-additive operator. Results comprehended tools enabling observation of synergy, redundancy and inhibition of value variables as consequence of non-additive measure. In fi ne, results induced issues for future research. powerset, fuzzy integral, Choquet integral, New intergral for capacities, non-additive measure A general theoretical approach to value analysis of value is assigned to thermoeconomics in of particular crisp set of discrete value variables of general.
    [Show full text]
  • The Worst Innovation Mercantilist Policies of 2015
    The Worst Innovation Mercantilist Policies of 2015 BY NIGEL CORY | JANUARY 2016 Innovation is the central driver of growth. As a result, an increasing Countries that number of countries are seeking to become innovation leaders. use “innovation Unfortunately, as the global race for innovation leadership intensifies, mercantilist” policies think that prosperity many countries choose policies grounded in “innovation mercantilism”: a occurs by using strategy that seeks prosperity through the use of protectionist and trade- protectionist and trade distorting policies to expand domestic technology production. These distortionary policies policies often have misguided and short-sighted “beggar-thy-neighbor” to expand domestic production and aims of replacing imports with domestic production or unfairly promoting exports of high-tech exports. Accordingly, the global economic system has become increasingly goods and services. distorted over the last decade as more and more nations adopt innovation mercantilist policies to support domestic firms, including forced local production, forced technology transfer, and intellectual property theft. These innovation mercantilist practices do not just damage other economies; they damage the entire global innovation system, leading to less overall innovation and productivity growth. Moreover, they often do not even help the countries embracing the practices, particularly over the long run; instead, mercantilist policies lead them to neglect the greater opportunity to spur growth by raising the productivity of all sectors, not just a few high- tech ones. This third annual report documents what the Information Technology and Innovation Foundation (ITIF) believes to be the 10 worst innovation mercantilist practices proposed, INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | JANUARY 2016 PAGE 1 drafted, or implemented in 2015.
    [Show full text]
  • TEACHING MODULE for ENGLISH for SPECIFIC PURPOSES
    TEACHING MODULE for ENGLISH FOR SPECIFIC PURPOSES Compiled By Bertaria Sohnata Hutauruk Only for our classroom instructions (Very restricted use) FKIP UHN PEMATANGSIANTAR 2015 ACKNOWLEDGEMENT This binding is a result of compilation from the authentic material from the webs. It is a result of short browsing. The aim is to provide a suitable module for our ESP classroom sessions in the first semester of the 2011/2012 academic year in our study program. This module consists of some lessons for the concept of ESP, some lessons for ESP lesson plans used abroad and in Indonesia, ESP for some school levels, and ESP for Academic Purposes and for Occupational Purposes. The main teaching objective in our classroom is to provide the students with the competence on designing a good lesson plan to teach ESP for academic purposes and occupational purposes at any level according to its context. We fully intend that this binding is only to facilitate some compiled authentic materials from the webs for our ESP Classroom instructions. By this opportunity, we would like to extend our sincere thanks all the authors of the materials and the websites which publish them. May God the Almighty bless them all! Medan-Pematangsiantar, September 2015 The Authors, Bertaria Sohnata Hutauruk TABLE OF CONTENTS ACKNOWLEDGEMENT…………………………………………………………… TABLE OF CONTENTS…………………………………………………………….. Lesson 1 Introduction………………………………………………………………………….. Lesson 2 ESP AND ESL………………………………………………………………………. Leson 3 ESP Course at Technical Secondary Vocational School for Construction and Building Trade students………………………………………. Lesson 4 ESP Vocabulary Teaching at the Vocational Secondary School of Furniture Industry………………………….. Lesson 5 ESP International Sample lesson plan........................................................................... Lesson 6 ESP Lesson Plan in Indonesia………………………………………………………..
    [Show full text]
  • Historical and Critical Review on Biophysical Economics 1
    July 21, 2016 9:55 WSPC/S1793-0480 204-BRL 1630001 Biophysical Reviews and Letters Vol. 11, No. 2 (2016) 63–86 c World Scientific Publishing Company DOI: 10.1142/S1793048016300012 Historical and Critical Review on Biophysical Economics Yekbun Adig¨uzel Department of Biophysics, School of Medicine Istanbul Kemerburgaz University Kartaltepe Mah. Incirli Cad. No:11 Bakirkoy, Istanbul, Turkey [email protected] Received 18 March 2016 Revised 25 April 2016 Accepted 3 May 2016 Published 21 July 2016 Biophysical economics is initiated with the long history of the relation of economics with ecological basis and biophysical perspectives of the physiocrats. It inherently has social, economic, biological, environmental, natural, physical, and scientific grounds. Biological entities in economy like the resources, consumers, populations, and parts of production systems, etc. could all be dealt by biophysical economics. Considering this wide scope, current work is a “biophysical economics at a glance” rather than a comprehensive review of the full range of topics that may just be adequately covered in a book-length work. However, the sense of its wide range of applications is aimed to be provided to the reader in this work. Here, modern approaches and biophysical growth theory are pre- sented after the long history and an overview of the concepts in biophysical economics. Examples of the recent studies are provided at the end with discussions. This review is also related to the work by Cleveland, “Biophysical Economics: From Physiocracy to Ecological Economics and Industrial Ecology” [C. J. Cleveland, in Advances in Bioeconomics and Sustainability: Essay in Honor of Nicholas Gerogescu-Roegen,eds.
    [Show full text]
  • Economics Paper 15: Innovation and Research Strategy for Growth
    BIS ECONOMICS PAPER NO. 15 Innovation and Research Strategy for Growth DECEMBER 2011 BIS ECONOMICS PAPER NO. 15 Innovation and Research Strategy for Growth DECEMBER 2011 Table of contents Acknowledgements v Table of contents i List of tables and figures vi Foreword ix Overview and policy implications 1 Rethinking innovation 1 Rethinking the policy approach 4 1. Innovation as a Key Driver of Economic Growth 7 The central role of innovation in growth theory 8 The Schumpeterian approach 8 Neoclassical exogeneous growth models 8 Neoclassical endogeneous growth models 9 The evolutionary approach 10 Innovative activities as a source of business productivity growth 10 Data sources and model 10 Key findings 12 The multi-dimensional nature of innovative activities 12 NESTA’s Innovation Index and surveys 13 Case studies 16 Innovation as a source of economic growth 17 Growth accounting 17 Research and Development in econometric studies 20 Measurement issues 21 Conclusion 21 2. How Innovation Happens 23 Changing views of innovation 24 From linear to complex models of innovation 24 Innovation research outcomes 25 Basic components of the innovation system 28 Institutional structures 29 Administrative and regulatory frameworks 29 Education and R & D capabilities 29 Physical and knowledge infrastructures 30 Modes of innovation 30 Radical and incremental innovation 30 User-led innovation 31 i Innovation and Research Strategy for Growth The UK innovation system 32 Salient UK features 33 The global innovation landscape 38 Comparisons with leading innovation systems 40 Global competition and collaboration 43 The emergence of new scientific hubs 43 Capturing value in global chains 43 Global partnerships 45 Sourcing knowledge 48 Towards a framework for policy 51 Market failures 51 System failures 52 Conclusion 53 3.
    [Show full text]
  • WHAT LOUIS KELSO KNEW Patricia Hetter Kelso**
    Reprinted with permission from Employee Stock Ownership Plans—ESOP Planning, Financing, Im- plementation, Law and Taxation, Afterword II; published by the Beyster Institute at the Rady School of Management, University of California, San Diego. © 2006 through 2009 by ESOP Book, Inc. http://www.esopbook.org/ AFTERWORD II WHAT LOUIS KELSO KNEW Patricia Hetter Kelso** The ancient Greek poet Archilochus observed: “The fox knows many things, but the hedgehog knows one big thing.” Although the meaning of this enigmatic fragment has been lost in time, the late British philosopher Isaiah Berlin, in a celebrated essay,1 made the fox and the hedgehog symbols of a deep temperamental divide between thinkers and writers, and perhaps human beings in general. Berlin thought that a great chasm exists between “those, on one side, who relate everything to a single central vision, one system … a single, universal organizing principle … and, on the other side, those who pursue many ends, often unrelated and even contradictory, connected, if at all, only in some de facto way … related by no moral or aesthetic principle.” The hedgehog, then, is holistic, the fox pragmatic. In Berlin’s taxonomy, Plato is a hedgehog, Ar- istotle a fox, and Tolstoi a fox who wants to be a hedgehog. As the author of an important biography of Karl Marx, an arch-hedgehog if ever there was one, Berlin might well have extended his analysis to economists. Their thinking reflects the same temperamental split. Louis Kelso was a hedgehog. As a political economist and visionary social thinker, he knew one big thing—an overarchingly momentous thing that illuminates the social landscape like flashes of summer lightning, a transformational big thing that generations of economists, with one possible ex- ception, Jean Baptiste Say, had inexplicably overlooked.
    [Show full text]