Austrian Economic Thought: Its Evolution and Its Contribution to Consumer Behavior
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Keynes's Investment Theory As a Micro-Foundation for His Grandchildren
Vol. 14, 2020-24 | July 03, 2020 | http://dx.doi.org/10.5018/economics-ejournal.ja.2020-24 Keynes's investment theory as a micro-foundation for his grandchildren Sergio Nisticò Abstract In contrast with the ‘missing micro-foundations’ argument against Keynes’s macro- economics, the paper argues that it is the present state of microeconomics that needs more solid ‘Keynesian foundations’. It is in particular Keynes’s understanding of investors’ behaviour that can be fruitfully extended to consumption theory, in a context in which consumers are considered as entrepreneurs, buying goods and services to engage in time- consuming activities. The paper emphasizes that the outcome in terms of enjoyment is particularly uncertain for those innovative and path-breaking activities, which Keynes discussed in his 1930 prophetic essay about us, the grandchildren of his contemporaries. Moreover, the Keynes-inspired microeconomics suggested in the paper provides an explanation of why Keynes’s prophecy about his grandchildren possibly expanding leisure did not materialize yet. The paper finally points at the need for appropriate economic policies supporting consumers’ propensity to enforce innovative forms of time use. JEL B41 D11 D81 Keywords Keynesian microeconomics; consumption; time use; uncertainty; Keynes’s grandchildren Authors Sergio Nisticò, Creativity and Motivations Economic Research Center, Department of Economics and Law, University of Cassino and Southern Lazio, Italy, [email protected] Citation Sergio Nisticò (2020). Keynes's investment theory as a micro-foundation for his grandchildren. Economics: The Open-Access, Open-Assessment E-Journal, 14 (2020-24): 1–15. http://dx.doi.org/10.5018/economics-ejournal.ja.2020-24 Received January 22, 2020 Published as Economics Discussion Paper February 14, 2020 Revised June 8, 2020 Accepted June 18, 2020 Published July 3, 2020 © Author(s) 2020. -
Lucas on the Relationship Between Theory and Ideology
Discussion Paper No. 2010-28 | November 17, 2010 | http://www.economics-ejournal.org/economics/discussionpapers/2010-28 Lucas on the Relationship between Theory and Ideology Michel De Vroey IRES, University of Louvain Please cite the corresponding journal article: http://dx.doi.org/10.5018/economics-ejournal.ja.2011-4 Abstract This paper concerns a neglected aspect of Lucas’s work: his methodological writings, published and unpublished. Particular attention is paid to his views on the relationship between theory and ideology. I start by setting out Lucas’s non-standard conception of theory: to him, a theory and a model are the same thing. I also explore the different facets and implications of this conception. In the next two sections, I debate whether Lucas adheres to two methodological principles that I dub the ‘non-interference’ precept (the proposition that ideological viewpoints should not influence theory), and the ‘non-exploitation’ precept (that the models’ conclusions should not be transposed into policy recommendations, in so far as these conclusions are built into the models’ premises). The last part of the paper contains my assessment of Lucas’s ideas. First, I bring out the extent to which Lucas departs from the view held by most specialized methodologists. Second, I wonder whether the new classical revolution resulted from a political agenda. Third and finally, I claim that the tensions characterizing Lucas’s conception of theory follow from his having one foot in the neo- Walrasian and the other in the Marshallian–Friedmanian universe. JEL B22, B31, B41, E30 Keywords Lucas; new classical macroeconomics; methodology Correspondence Michel De Vroey, IRES, University of Louvain, Place Montesquieu 3, B- 3458 Louvain-la-Neuve, Belgium: e-mail: [email protected] A first version of this paper was presented at seminars given at the University of Toronto and the University of British Columbia. -
The Economics, Neurobiology and Pharmacology of Intertemporal Choice in Humans
The Economics, Neurobiology and Pharmacology of Intertemporal Choice in Humans A thesis submitted for the degree of Doctor of Philosophy Alexander J Pine University College London September 2009 2 Preface I, Alexander J Pine confirm that the work presented in this thesis is my own. Where information has been derived from other sources I confirm that this has been indicated in the thesis. AJ Pine 3 Abstract In intertemporal choice, decision-makers must choose between options whose outcomes occur at different times in the future and are associated with different magnitudes of gain or loss. Previous neuropsychological research on this problem is dominated by a behavioural- economic model which proposes that choice outcome is solely determined by a process of devaluing rewards with time, termed temporal discounting. This thesis investigates the veracity of this assumption by developing a new mathematical model of choice which takes into account another fundamental feature of human preference, namely the non-linearity of the relationship between the utility and magnitude of gains. Using behavioural data, methodologies are developed to demonstrate that this model is superior to previous models in accounting for human intertemporal choices. Specifically, using existing terminologies ‘impulsive’ and ‘self-controlled’ to describe preference in choices between smaller-sooner and larger-later monetary rewards, it is shown that the discounting of increasing magnitudes implied by the law of diminishing marginal utility exerts a significant effect in determining choice outcome. In addition to high rates of temporal discounting, it is shown that impulsivity can be engendered by higher rates of diminishing marginal utility and vice-versa. -
Hermann, Rau, Mangoldt : Les Origines De La Fonction D’Offre De Marché En Allemagne (1830 - 1870) Paola Tubaro
Hermann, Rau, Mangoldt : les origines de la fonction d’offre de marché en Allemagne (1830 - 1870) Paola Tubaro To cite this version: Paola Tubaro. Hermann, Rau, Mangoldt : les origines de la fonction d’offre de marché en Allemagne (1830 - 1870). Recherches Economiques de Louvain - Louvain economic review, De Boeck Université, 2005, 71 (2), pp.223 - 243. 10.3917/rel.712.0223. hal-01648314 HAL Id: hal-01648314 https://hal.archives-ouvertes.fr/hal-01648314 Submitted on 28 Nov 2020 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. HERMANN, RAU, MANGOLDT : LES ORIGINES DE LA FONCTION D'OFFRE DE MARCHÉ EN ALLEMAGNE (1830 - 1870) Paola Tubaro De Boeck Supérieur | « Recherches économiques de Louvain » 2005/2 Vol. 71 | pages 223 à 243 ISSN 0770-4518 ISBN 2-8041-4747-9 Document téléchargé depuis www.cairn.info - 176.183.201.126 25/11/2017 13h00. © De Boeck Supérieur Article disponible en ligne à l'adresse : -------------------------------------------------------------------------------------------------------------------- https://www.cairn.info/revue-recherches-economiques-de- louvain-2005-2-page-223.htm -------------------------------------------------------------------------------------------------------------------- Pour citer cet article : -------------------------------------------------------------------------------------------------------------------- Paola Tubaro, « Hermann, Rau, Mangoldt : les origines de la fonction d'offre de marché en Allemagne (1830 - 1870) », Recherches économiques de Louvain 2005/2 (Vol. -
Microeconomics
AQA A Level Economics Course Companion Year 2 Topics Microeconomics Author: Geoff Riley www.tutor2u.net Copyright tutor2u: www.tutor2u.net/economics 1 Individual economic decision making ................................................................................................ 4 Imperfect Information ........................................................................................................................ 6 Behavioural Economics ...................................................................................................................... 8 Public and Private Sector Organisations ...................................................................................... 15 Profit and Not-for-Profit Organisations ........................................................................................ 15 Production and productivity ............................................................................................................ 18 Specialisation, division of labour and exchange ............................................................................... 18 The Law of Diminishing Returns ....................................................................................................... 21 Long Run Returns to Scale ............................................................................................................ 22 Costs of Production .......................................................................................................................... 24 Costs of production in the short -
The Neglect of the French Liberal School in Anglo-American Economics: a Critique of Received Explanations
The Neglect of the French Liberal School in Anglo-American Economics: A Critique of Received Explanations Joseph T. Salerno or roughly the first three quarters of the nineteenth century, the "liberal school" thoroughly dominated economic thinking and teaching in F France.1 Adherents of the school were also to be found in the United States and Italy, and liberal doctrines exercised a profound influence on prominent German and British economists. Although its numbers and au- thority began to dwindle after the 1870s, the school remained active and influential in France well into the 1920s. Even after World War II, there were a few noteworthy French economists who could be considered intellectual descendants of the liberal tradition. Despite its great longevity and wide-ranging influence, the scientific con- tributions of the liberal school and their impact on the development of Eu- ropean and U.S. economic thought—particularly on those economists who are today recognized as the forerunners, founders, and early exponents of marginalist economics—have been belittled or simply ignored by most twen- tieth-century Anglo-American economists and historians of thought. A number of doctrinal scholars, including Joseph Schumpeter, have noted and attempted to explain the curious neglect of the school in the En- glish-language literature. In citing the school's "analytical sterility" or "indif- ference to pure theory" as a main cause of its neglect, however, their expla- nations have overlooked a salient fact: that many prominent contributors to economic analysis throughout the nineteenth and early twentieth centuries expressed strong appreciation of or weighty intellectual debts to the purely theoretical contributions of the liberal school. -
Firmin Oulès and the “New Lausanne School”
Firmin Oulès and the "New Lausanne School" David Sarech (University of Lausanne, Ph.D. Student) In this paper I will present Firmin Oulès’ “harmonized economics” and interrogate the relationship between state and market in his thought. “Harmonized economics” were conceived as the continuation of Léon Walras’ theory. The key concept of the first Lausanne school is the notion of equilibrium. Indeed, Walras forged it in order to “scientifically” demonstrate the superiority of a competition-based economy. However, the mathematical approach he chose, as well as his disdain for the orthodox economy of his time, led him to be misunderstood and he did not receive the recognition he was expecting. Thus the concept of general equilibrium would be forgotten until the mid 1950’s when it would become the core of microeconomics. However, as recent studies in history of economic thought have shown, the concept of equilibrium in Walras’ thought has to be understood in a broader context than a purely economical one. Indeed, the main goal of Walras was to bring an answer to “the social question”. Contrary to Marx, he did not think of it as being a problem of profit distribution between labor and capital. Instead he thought the goal of the economist was to create an economic system were everyone would be able to exert its inner abilities and in which inequalities would be based solely on merit. The incentive created by private property and profit-seeking being the groundwork of a flourishing economy, the equilibrium had to be understood as a tool to establish this idealistic society. -
Networks of Modernity: Germany in the Age of the Telegraph, 1830–1880
OUP CORRECTED AUTOPAGE PROOFS – FINAL, 24/3/2021, SPi STUDIES IN GERMAN HISTORY Series Editors Neil Gregor (Southampton) Len Scales (Durham) Editorial Board Simon MacLean (St Andrews) Frank Rexroth (Göttingen) Ulinka Rublack (Cambridge) Joel Harrington (Vanderbilt) Yair Mintzker (Princeton) Svenja Goltermann (Zürich) Maiken Umbach (Nottingham) Paul Betts (Oxford) OUP CORRECTED AUTOPAGE PROOFS – FINAL, 24/3/2021, SPi OUP CORRECTED AUTOPAGE PROOFS – FINAL, 24/3/2021, SPi Networks of Modernity Germany in the Age of the Telegraph, 1830–1880 JEAN-MICHEL JOHNSTON 1 OUP CORRECTED AUTOPAGE PROOFS – FINAL, 24/3/2021, SPi 3 Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Jean-Michel Johnston 2021 The moral rights of the author have been asserted First Edition published in 2021 Impression: 1 Some rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, for commercial purposes, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization. This is an open access publication, available online and distributed under the terms of a Creative Commons Attribution – Non Commercial – No Derivatives 4.0 International licence (CC BY-NC-ND 4.0), a copy of which is available at http://creativecommons.org/licenses/by-nc-nd/4.0/. -
Marginal Revolution
MARGINAL REVOLUTION It took place in the later half of the 19th century Stanley Jevons in England, Carl Menger in Austria and Leon walras at Lausanne, are generally regarded as the founders of marginalist school Hermann Heinrich Gossen of Germany is considered to be the anticipator of the marginalist school The term ‘Marginal Revolution’ is applied to the writings of the above economists because they made fundamental changes in the apparatus of economic analysis They started looking at some of the important economic problems from an altogether new angle different from that of classical economists Marginal economists has been used to analyse the single firm and its behavior, the market for a single product and the formation of individual prices Marginalism dominated Western economic thought for nearly a century until it was challenged by Keynesian attack in 1936 (keynesian economics shifted the sphere of enquiry from micro economics to macro economics where the problems of the economy as a whole are analysed) The provocation for the emergence of marginalist school was provided by the interpretation of classical doctrines especially the labour theory of value and ricardian theory of rent by the socialists Socialists made use of classical theories to say things which were not the intention of the creators of those theories So the leading early marginalists felt the need for thoroughly revising the classical doctrines especially the theory of value They thought by rejecting the labour theory of value and by advocating the marginal utility theory of value, they could strike at the theoretical basis of socialism Economic Ideas of Marginalist School This school concentrated on the ‘margin’ to explain economic phenomena. -
Karl Helfferich and Rudolf Hilferding on Georg Friedrich Knapp's State
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Greitens, Jan Conference Paper — Manuscript Version (Preprint) Karl Helfferich and Rudolf Hilferding on Georg Friedrich Knapp’s State Theory of Money: Monetary Theories during the Hyperinflation of 1923 Suggested Citation: Greitens, Jan (2020) : Karl Helfferich and Rudolf Hilferding on Georg Friedrich Knapp’s State Theory of Money: Monetary Theories during the Hyperinflation of 1923, Annual Conference of the European Society for the History of Economic Thought (ESHET) 2020, Sofia., ZBW - Leibniz Information Centre for Economics, Kiel, Hamburg This Version is available at: http://hdl.handle.net/10419/216102 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available -
Adam Smith and the Austrian School of Economics: the Problem of Diamonds and Water
Stefan Poier 1st year Part-time Doctoral Studies Adam Smith and the Austrian School of Economics: The Problem of Diamonds and Water Keywords: Adam Smith, Austrian School of Economics, Value Paradox, Marginal Utility, Decision Making Introduction When end of 2017 Leonardo da Vinci's painting "Salvator Mundi" was auctioned off for over $450 million, it was nearly three times as expensive as the second most expensive painting, a Picasso, and it could have compensated for the state deficit of Lithuania. An absurdly high sum for a piece of wood and oil paint. How do you explain such a price? Neither the amount of time spent working on it, nor the benefits from this work alone could justify it. Why do we often pay high prices for goods with little use, but low prices for things that are sometimes partially vital? Generations of economists and philosophers have tried to resolve this apparent paradox. An explanation for this price is - quite simply - an individual’s willingness to pay this price. The prestige gain of owning one of only fifteen paintings of the probably most important artist and universal scholar of all time can already provide an enormous increase in status. It is the scarcity, the uniqueness of the artwork, which justified the high increase in utility or satisfaction. If there were any number of similar works, no one would pay more than the utility value for it. This – today rational – economic inference was not always granted. It is based on the recognition that the benefits of consumption of a good decreases with the amount consumed (and thus with the saturation of the consumer). -
Imputation and Value in the Works of Menger, Böhm-Bawerk and Wieser
E-LOGOS/2005 ISSN 1121-0442 _____________________________________________ Imputation and Value in the works of Menger, Böhm-Bawerk and Wieser Šimon Bi ľo University of Economics, Prague [email protected] Alford Fellow, The Ludwig von Mises Institute, July 21, 2004 Version January 10, 2005 1 Abstract: Analysis of the discussions within the first two generations of the Austrian school of economics constitutes an inevitable cornerstone of every further inquiry on the fields of the theory of value and imputation theory. Only with knowledge of Menger’s, Wieser’s and Böhm-Bawerk’s understanding of cardinalism and problems related with utility, value and their interdependence, we are apt to understand correctness or incorrectness of their positions and also positions of their followers. Thus, we could trace back cardinalist notions of utility seeded by Menger and understand later Mises’- Čuhel reformulation of the whole value theory into an ordinalistic one. Mises fully escaped the Mengerian tradition in this point and also transformed the whole theory of imputation into the theory of pricing of the factors of production. The only exception, from the point of view of imputation theory of highest importance, is his insistence on the value equation of means and ends that confused his successors and was investigated only recently. Within the context of present state of value and imputation theories, two related problems arise: “What constitutes theory of imputation, theory of value and valuation of the factors of production, today?” and “Is Menger-Böhm-Bawerkian solution of imputation theory really suitable for the explanation of the pricing process and isn’t Wieser’s objection of circularity of the imputation theory applied in price-creation justified?” These are the questions that are badly needed to be answered in order to clarify the theory in the field.