J. R. Hicks
- Published in print:
- 1987
- Published Online:
- November 2003
- ISBN:
- 9780198772873
- eISBN:
- 9780191596438
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198772874.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Capital and Growth by John Hicks was published in 1965 and rapidly established itself as a landmark in economic theory. This book takes earlier work and examines it critically for its ...
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Capital and Growth by John Hicks was published in 1965 and rapidly established itself as a landmark in economic theory. This book takes earlier work and examines it critically for its present-day value. The theme, now more clearly identified, is a comparative study of the economics of change, and brings in many of Hicks's subsequent developments and refinements — in particular a ‘neo-Austrian’ theory of capital which he developed in Capital and Time (1973). A new chapter on Keynes's methods has been added. This book presents a complete classification of the family of models appropriate for analysing dynamic economics.Less
Capital and Growth by John Hicks was published in 1965 and rapidly established itself as a landmark in economic theory. This book takes earlier work and examines it critically for its present-day value. The theme, now more clearly identified, is a comparative study of the economics of change, and brings in many of Hicks's subsequent developments and refinements — in particular a ‘neo-Austrian’ theory of capital which he developed in Capital and Time (1973). A new chapter on Keynes's methods has been added. This book presents a complete classification of the family of models appropriate for analysing dynamic economics.
Jie W Weiss and David J Weiss
- Published in print:
- 2008
- Published Online:
- January 2009
- ISBN:
- 9780195322989
- eISBN:
- 9780199869206
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195322989.003.0001
- Subject:
- Psychology, Cognitive Psychology
This chapter reviews theoretical literature on the economic theory of decision making and the rapidly increasing number of psychological experiments (performed by both psychologists and economists) ...
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This chapter reviews theoretical literature on the economic theory of decision making and the rapidly increasing number of psychological experiments (performed by both psychologists and economists) that are relevant to it. The review is divided into five sections: the theory of riskless choices, the application of the theory of riskless choices to welfare economics, the theory of risky choices, transitivity in decision making, and the theory of games and of statistical decision functions.Less
This chapter reviews theoretical literature on the economic theory of decision making and the rapidly increasing number of psychological experiments (performed by both psychologists and economists) that are relevant to it. The review is divided into five sections: the theory of riskless choices, the application of the theory of riskless choices to welfare economics, the theory of risky choices, transitivity in decision making, and the theory of games and of statistical decision functions.
Margaret Jane Radin
- Published in print:
- 2012
- Published Online:
- October 2017
- ISBN:
- 9780691155333
- eISBN:
- 9781400844838
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691155333.003.0004
- Subject:
- Law, Company and Commercial Law
This chapter discusses the main streams of contract philosophy in order to elucidate the extent to which boilerplate is a permissible means of creating contractual obligation. In particular, it ...
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This chapter discusses the main streams of contract philosophy in order to elucidate the extent to which boilerplate is a permissible means of creating contractual obligation. In particular, it considers the deep embeddedness—the ineradicability—of the notion of voluntariness. It also compares and contrasts the economic efficiency theory of contract with the various theories based more directly on freedom of the will. The chapter first provides an overview of contract theory, focusing on autonomy (rights) and welfare theories, reliance theory, and equivalence of exchange theory. It then describes the basic premises of the economic theory of law, the role of incentives in maximizing social welfare, contract law, and property and liability rules. It shows that the existing philosophical theories of contract depend on the core notions of voluntariness, freedom of choice, or consent, thus making it difficult to incorporate boilerplate into the theories of contract.Less
This chapter discusses the main streams of contract philosophy in order to elucidate the extent to which boilerplate is a permissible means of creating contractual obligation. In particular, it considers the deep embeddedness—the ineradicability—of the notion of voluntariness. It also compares and contrasts the economic efficiency theory of contract with the various theories based more directly on freedom of the will. The chapter first provides an overview of contract theory, focusing on autonomy (rights) and welfare theories, reliance theory, and equivalence of exchange theory. It then describes the basic premises of the economic theory of law, the role of incentives in maximizing social welfare, contract law, and property and liability rules. It shows that the existing philosophical theories of contract depend on the core notions of voluntariness, freedom of choice, or consent, thus making it difficult to incorporate boilerplate into the theories of contract.
Krishnendu Ghosh Dastidar, Hiranya Mukhopadhyay, and Uday Bhanu Sinha (eds)
- Published in print:
- 2011
- Published Online:
- September 2012
- ISBN:
- 9780198073970
- eISBN:
- 9780199081615
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198073970.001.0001
- Subject:
- Economics and Finance, Microeconomics
Anjan Mukherji, arguably one of India's most distinguished economists, is known for his research on the stability of the Walrasian tatonnement, its relation to the weak axiom of revealed preference, ...
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Anjan Mukherji, arguably one of India's most distinguished economists, is known for his research on the stability of the Walrasian tatonnement, its relation to the weak axiom of revealed preference, the effect of choice of the numeraire and its relation to the Edgeworth-Uzawa barter process. Two of his recent papers, ‘Global Stability Conditions on the Plane: A General Law of Demand’ (2007) and ‘The Stability of a Competitive Economy: A Reconsideration’ (2008), have yielded especially interesting results. This book explores various aspects of economic theory and quantitative techniques as well as their applications and relevance to policymaking. Chapters deal with a wide range of topics such as Markovian equilibria in a dynamic general equilibrium model with heterogeneous consumers, monotone Markov models, multiple equilibria in a dynamic two-country model, observability of chaotic economic dynamics in the Matsuyama model, a simple exposition of learning by doing in endogenous growth theory, economic growth and the quality of teachers in a public education system, wealth effects, investment-led growth cycles, distraction and incentives, liquidity preference and information, coordination in teams, decomposition of accident loss and efficiency of negligence rule, international cartels and spheres of influence, price competition in a mixed duopoly, recommended play versus costly punishments in a laboratory public goods game, and India's monetary policy accommodation during the global crisis. It also examines private investment in human capital and industrial development, focusing on the Indian software industry, and arranged marriage, co-residence and female schooling in India.Less
Anjan Mukherji, arguably one of India's most distinguished economists, is known for his research on the stability of the Walrasian tatonnement, its relation to the weak axiom of revealed preference, the effect of choice of the numeraire and its relation to the Edgeworth-Uzawa barter process. Two of his recent papers, ‘Global Stability Conditions on the Plane: A General Law of Demand’ (2007) and ‘The Stability of a Competitive Economy: A Reconsideration’ (2008), have yielded especially interesting results. This book explores various aspects of economic theory and quantitative techniques as well as their applications and relevance to policymaking. Chapters deal with a wide range of topics such as Markovian equilibria in a dynamic general equilibrium model with heterogeneous consumers, monotone Markov models, multiple equilibria in a dynamic two-country model, observability of chaotic economic dynamics in the Matsuyama model, a simple exposition of learning by doing in endogenous growth theory, economic growth and the quality of teachers in a public education system, wealth effects, investment-led growth cycles, distraction and incentives, liquidity preference and information, coordination in teams, decomposition of accident loss and efficiency of negligence rule, international cartels and spheres of influence, price competition in a mixed duopoly, recommended play versus costly punishments in a laboratory public goods game, and India's monetary policy accommodation during the global crisis. It also examines private investment in human capital and industrial development, focusing on the Indian software industry, and arranged marriage, co-residence and female schooling in India.
Athol Fitzgibbons
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283201
- eISBN:
- 9780191596254
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283202.003.0001
- Subject:
- Economics and Finance, History of Economic Thought
The Introduction provides an overview of J. M. Keynes's system, incorporating his moral and political philosophies, his philosophy of probability, and his economic theories and objectives.
The Introduction provides an overview of J. M. Keynes's system, incorporating his moral and political philosophies, his philosophy of probability, and his economic theories and objectives.
Simon Learmount
- Published in print:
- 2004
- Published Online:
- September 2007
- ISBN:
- 9780199269082
- eISBN:
- 9780191719257
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199269082.003.0002
- Subject:
- Business and Management, Corporate Governance and Accountability
This chapter reviews some of the different ideas which inform current thoughts about what corporate governance is. Doing this provides the context for the arguments in the book. A distinction is ...
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This chapter reviews some of the different ideas which inform current thoughts about what corporate governance is. Doing this provides the context for the arguments in the book. A distinction is drawn between ideas based on economic theories of the firm, and so-called ‘organizational’ theories. The chapter discusses how economic approaches tend to see the firm principally in contractual terms, are guided by assumptions of utility-maximizing self-interested human behaviour, and tend to posit the protection of investors' capital as the ‘corporate governance problem’. Organizational theories by contrast tend to begin with a more complex concept of the firm, allow for other-oriented behaviour, and can conceive the governance of companies as routinely involving multiple relationships. While economic approaches currently predominate in the burgeoning field of corporate governance research, there are many criticisms of their fundamental assumptions. Organizational approaches, tend to be poorly developed theoretically.Less
This chapter reviews some of the different ideas which inform current thoughts about what corporate governance is. Doing this provides the context for the arguments in the book. A distinction is drawn between ideas based on economic theories of the firm, and so-called ‘organizational’ theories. The chapter discusses how economic approaches tend to see the firm principally in contractual terms, are guided by assumptions of utility-maximizing self-interested human behaviour, and tend to posit the protection of investors' capital as the ‘corporate governance problem’. Organizational theories by contrast tend to begin with a more complex concept of the firm, allow for other-oriented behaviour, and can conceive the governance of companies as routinely involving multiple relationships. While economic approaches currently predominate in the burgeoning field of corporate governance research, there are many criticisms of their fundamental assumptions. Organizational approaches, tend to be poorly developed theoretically.
Roger M. Barker
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780199576814
- eISBN:
- 9780191722509
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199576814.003.0003
- Subject:
- Business and Management, International Business, Corporate Governance and Accountability
The proposed hypothesis of European corporate governance change is contrasted with existing explanations of corporate governance from a range of academic disciplines. It is argued that, although the ...
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The proposed hypothesis of European corporate governance change is contrasted with existing explanations of corporate governance from a range of academic disciplines. It is argued that, although the hypothesis advanced in the book is based on the rational behavior of social actors, it is not assumed that corporate governance outcomes will necessarily converge on the most “efficient” outcome (e.g., in terms of minimizing the cost of capital for the firm). Nor is it assumed that there is a necessary equality between de jure and de facto corporate governance outcomes (as argued by many legal scholars).Less
The proposed hypothesis of European corporate governance change is contrasted with existing explanations of corporate governance from a range of academic disciplines. It is argued that, although the hypothesis advanced in the book is based on the rational behavior of social actors, it is not assumed that corporate governance outcomes will necessarily converge on the most “efficient” outcome (e.g., in terms of minimizing the cost of capital for the firm). Nor is it assumed that there is a necessary equality between de jure and de facto corporate governance outcomes (as argued by many legal scholars).
MICHAEL JOFFE
- Published in print:
- 2011
- Published Online:
- January 2013
- ISBN:
- 9780197264843
- eISBN:
- 9780191754050
- Item type:
- chapter
- Publisher:
- British Academy
- DOI:
- 10.5871/bacad/9780197264843.003.0016
- Subject:
- Sociology, Methodology and Statistics
This chapter compares biology with the practices of economics to determine the extent to which mainstream economic theory can be regarded as ‘scientific’. This survey of practice in the two ...
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This chapter compares biology with the practices of economics to determine the extent to which mainstream economic theory can be regarded as ‘scientific’. This survey of practice in the two disciplines shows that biological theory is derived from description and experimentation. In contrast, the ideal in mainstream economics is to derive theory from axioms. When economic theory is compared with the available evidence, a disjunction is found between the empirical findings and conventional theory. The disjunction is explained by a fundamental mismatch between the evidence and the basic theoretical categories and structure. The central issue is the relationship of evidence to theory: to put it simply, which should come first? The conclusion is that regularities that emerge from a comparative historical perspective, including use of econometric, statistical, and qualitative studies, could provide the type of evidence that could form a secure foundation for theorising in economics.Less
This chapter compares biology with the practices of economics to determine the extent to which mainstream economic theory can be regarded as ‘scientific’. This survey of practice in the two disciplines shows that biological theory is derived from description and experimentation. In contrast, the ideal in mainstream economics is to derive theory from axioms. When economic theory is compared with the available evidence, a disjunction is found between the empirical findings and conventional theory. The disjunction is explained by a fundamental mismatch between the evidence and the basic theoretical categories and structure. The central issue is the relationship of evidence to theory: to put it simply, which should come first? The conclusion is that regularities that emerge from a comparative historical perspective, including use of econometric, statistical, and qualitative studies, could provide the type of evidence that could form a secure foundation for theorising in economics.
John Hicks
- Published in print:
- 1989
- Published Online:
- November 2003
- ISBN:
- 9780198287247
- eISBN:
- 9780191596407
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198287240.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
John Hicks's writing on monetary economics spans over fifty years. This book draws together the common threads of his work in a single succinct statement of the basics of monetary theory. It also ...
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John Hicks's writing on monetary economics spans over fifty years. This book draws together the common threads of his work in a single succinct statement of the basics of monetary theory. It also outlines a theory of competitive markets that can be linked to the monetary sector; neither standard classical or neo-classical value theory can, on its own, fill the gap between monetary and non-monetary economics. In reviewing his own work, Hicks explains the way in which economic theory has been adjusted to reflect developments in the real economy. He sees these changes, sometimes quite major, as the discovery of truths which have become more appropriate, rather than the discovery of completely new truths.Less
John Hicks's writing on monetary economics spans over fifty years. This book draws together the common threads of his work in a single succinct statement of the basics of monetary theory. It also outlines a theory of competitive markets that can be linked to the monetary sector; neither standard classical or neo-classical value theory can, on its own, fill the gap between monetary and non-monetary economics. In reviewing his own work, Hicks explains the way in which economic theory has been adjusted to reflect developments in the real economy. He sees these changes, sometimes quite major, as the discovery of truths which have become more appropriate, rather than the discovery of completely new truths.
J. C. R. Dow and I. D. Saville
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283195
- eISBN:
- 9780191596186
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283199.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This book has been written to work on two levels. On the one hand, it provides a theory of monetary policy, focusing on the role of the central bank in determining and effecting policy. It also ...
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This book has been written to work on two levels. On the one hand, it provides a theory of monetary policy, focusing on the role of the central bank in determining and effecting policy. It also examines the relationship of the central banks to the public and private sectors. Both authors have extensive experience working in the Bank of England, and so are attempting to transfer this experience to the area of economic theory. The theoretical analysis is complemented by an examination of the successes and failures of monetary policy in the UK from the mid‐1960s. As such, the book acts as an important work for students of economics and economic theory, but is also accessible to those involved in policy‐making, journalism, and other interested parties.Less
This book has been written to work on two levels. On the one hand, it provides a theory of monetary policy, focusing on the role of the central bank in determining and effecting policy. It also examines the relationship of the central banks to the public and private sectors. Both authors have extensive experience working in the Bank of England, and so are attempting to transfer this experience to the area of economic theory. The theoretical analysis is complemented by an examination of the successes and failures of monetary policy in the UK from the mid‐1960s. As such, the book acts as an important work for students of economics and economic theory, but is also accessible to those involved in policy‐making, journalism, and other interested parties.
Axel Hadenius
- Published in print:
- 2001
- Published Online:
- November 2003
- ISBN:
- 9780199246663
- eISBN:
- 9780191599392
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199246661.003.0004
- Subject:
- Political Science, Democratization
Starts with a survey of the waves of democratization in the twentieth century. The matter of explanation is then addressed. Different socio‐economic theories are scrutinized: the modernization ...
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Starts with a survey of the waves of democratization in the twentieth century. The matter of explanation is then addressed. Different socio‐economic theories are scrutinized: the modernization argument and the capitalism and class arguments. Thereafter the relationship between institutions and democratic development is clarified more precisely. Most important are (1) a legacy of pluralism, (2) instruments of power sharing, (3) a rule‐governed state apparatus.Less
Starts with a survey of the waves of democratization in the twentieth century. The matter of explanation is then addressed. Different socio‐economic theories are scrutinized: the modernization argument and the capitalism and class arguments. Thereafter the relationship between institutions and democratic development is clarified more precisely. Most important are (1) a legacy of pluralism, (2) instruments of power sharing, (3) a rule‐governed state apparatus.
Nancy E. Gutman
- Published in print:
- 1996
- Published Online:
- October 2011
- ISBN:
- 9780198288848
- eISBN:
- 9780191684654
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198288848.003.0003
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter attempts to illustrate how John Maynard Keynes came up with an effort to reclaim the authority attributed to the lived experiences of economic agents to establish a basis for formulating ...
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This chapter attempts to illustrate how John Maynard Keynes came up with an effort to reclaim the authority attributed to the lived experiences of economic agents to establish a basis for formulating various economic theories. In addressing the bias of mainstream theory against obtaining knowledge through means of experimentation, Keynes focuses on the alarming changes and events that occurred over the period in which he had expressed his thoughts. In doing so, his innovations have gone beyond mere economic theory to economic thought’s methodology. This chapter attempts to derive the prominent themes from Keynes’s works, develops these themes, and analyzes how they have resulted as consequences of his endeavours to establish the connection between human conduct and various human beliefs.Less
This chapter attempts to illustrate how John Maynard Keynes came up with an effort to reclaim the authority attributed to the lived experiences of economic agents to establish a basis for formulating various economic theories. In addressing the bias of mainstream theory against obtaining knowledge through means of experimentation, Keynes focuses on the alarming changes and events that occurred over the period in which he had expressed his thoughts. In doing so, his innovations have gone beyond mere economic theory to economic thought’s methodology. This chapter attempts to derive the prominent themes from Keynes’s works, develops these themes, and analyzes how they have resulted as consequences of his endeavours to establish the connection between human conduct and various human beliefs.
Brigitte Granville
- Published in print:
- 2013
- Published Online:
- October 2017
- ISBN:
- 9780691145402
- eISBN:
- 9781400846443
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691145402.003.0001
- Subject:
- Business and Management, Finance, Accounting, and Banking
This chapter describes the learning trajectory that led economists and policymakers to regard controlling inflation as a priority and to pursue this goal of greater price stability more effectively. ...
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This chapter describes the learning trajectory that led economists and policymakers to regard controlling inflation as a priority and to pursue this goal of greater price stability more effectively. It focuses on one particular episode in the history of macroeconomic controversy—namely, how a set of economic ideas shifted the general conduct of monetary policy that had prevailed since John Hicks's interpretation (1937) of John Maynard Keynes' The General Theory of Employment, Interest and Money (1936). This “new” thinking about inflation and monetary policy reacted against the contemporary orthodoxy because the prevailing theory had proved to be unsatisfactory in analyzing the changing nature of the economy.Less
This chapter describes the learning trajectory that led economists and policymakers to regard controlling inflation as a priority and to pursue this goal of greater price stability more effectively. It focuses on one particular episode in the history of macroeconomic controversy—namely, how a set of economic ideas shifted the general conduct of monetary policy that had prevailed since John Hicks's interpretation (1937) of John Maynard Keynes' The General Theory of Employment, Interest and Money (1936). This “new” thinking about inflation and monetary policy reacted against the contemporary orthodoxy because the prevailing theory had proved to be unsatisfactory in analyzing the changing nature of the economy.
Mark Bevir
- Published in print:
- 2011
- Published Online:
- October 2017
- ISBN:
- 9780691150833
- eISBN:
- 9781400840281
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691150833.003.0007
- Subject:
- Political Science, UK Politics
This chapter examines the Fabians' rejection of Marxist economics for theories arising in the wake of the collapse of classical economics. Far too many historians have caricatured the Fabians as ...
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This chapter examines the Fabians' rejection of Marxist economics for theories arising in the wake of the collapse of classical economics. Far too many historians have caricatured the Fabians as bureaucratic elitists who were inspired by utilitarianism and classical political economy. Even when historians look more seriously at the beliefs of the Fabians, they generally argue that the Fabians adopted a reformist socialism based on a shared theory of rent derived from the classical liberalism of David Ricardo. In their view, this theory of rent blurred the distinction between classes, making it possible, first, to equate socialism not with ending capitalism but with taxation of unearned increment for the benefit of society and, second, to reject a revolutionary politics in favor of parliamentary gradualism and the permeation of bourgeois parties. However, the leading Fabians actually held different economic theories. They owed less to utilitarianism and classical political economy than to ethical positivism and neoclassical and marginal economic theories. Insofar as there is a distinctive Fabian socialism, it derives not from a shared theory of rent but from a shared endeavor by ethical positivists and liberal radicals to respond to the crisis of faith and especially the collapse of classical economics.Less
This chapter examines the Fabians' rejection of Marxist economics for theories arising in the wake of the collapse of classical economics. Far too many historians have caricatured the Fabians as bureaucratic elitists who were inspired by utilitarianism and classical political economy. Even when historians look more seriously at the beliefs of the Fabians, they generally argue that the Fabians adopted a reformist socialism based on a shared theory of rent derived from the classical liberalism of David Ricardo. In their view, this theory of rent blurred the distinction between classes, making it possible, first, to equate socialism not with ending capitalism but with taxation of unearned increment for the benefit of society and, second, to reject a revolutionary politics in favor of parliamentary gradualism and the permeation of bourgeois parties. However, the leading Fabians actually held different economic theories. They owed less to utilitarianism and classical political economy than to ethical positivism and neoclassical and marginal economic theories. Insofar as there is a distinctive Fabian socialism, it derives not from a shared theory of rent but from a shared endeavor by ethical positivists and liberal radicals to respond to the crisis of faith and especially the collapse of classical economics.
Chris Freeman and Francisco Louçã
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199251056
- eISBN:
- 9780191596278
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199251053.003.0001
- Subject:
- Economics and Finance, Economic History
Economic history has always been quite a peculiar department both in the domain of history and that of economics; dealing with change, institutions, collective rationality, and conflicting strategies ...
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Economic history has always been quite a peculiar department both in the domain of history and that of economics; dealing with change, institutions, collective rationality, and conflicting strategies of economic agents, privileging descriptive and non‐formal analytical tools, economic history remained for long outside the scope of formal neoclassical economics.This chapter describes and discusses the story of the incorporation of economic history into the mainstream of economic theory through the cliometric revolution, a powerful intellectual movement emerging by the late fifties, which encapsulated this reconstruction of economic history from the point of view of marginalist price theory and the postulates of individual rationality; Meyer and Conrad were the major drivers of this radical vision, and challenged the ‘old historians’ school’, today best represented by the response of David Landes.Yet the coherence of the cliometric movement was soon jeopardized by internal contradictions: Paul David issued the most powerful challenge to the seminal building block of the new approach, Fogel's ‘Time on the Cross’, a revision of the traditional approach to the economics of slavery in the pre‐Civil War USA.Douglass North is another example of a dissident from cliometrics, and Alfred Chandler provided alternative arguments for a reasoned history approach to societal change.The cliometric analysis of the British Industrial Revolution, using counterfactuals, namely by Crafts and Hawke, is discussed and contradicted in the chapter.Less
Economic history has always been quite a peculiar department both in the domain of history and that of economics; dealing with change, institutions, collective rationality, and conflicting strategies of economic agents, privileging descriptive and non‐formal analytical tools, economic history remained for long outside the scope of formal neoclassical economics.
This chapter describes and discusses the story of the incorporation of economic history into the mainstream of economic theory through the cliometric revolution, a powerful intellectual movement emerging by the late fifties, which encapsulated this reconstruction of economic history from the point of view of marginalist price theory and the postulates of individual rationality; Meyer and Conrad were the major drivers of this radical vision, and challenged the ‘old historians’ school’, today best represented by the response of David Landes.
Yet the coherence of the cliometric movement was soon jeopardized by internal contradictions: Paul David issued the most powerful challenge to the seminal building block of the new approach, Fogel's ‘Time on the Cross’, a revision of the traditional approach to the economics of slavery in the pre‐Civil War USA.
Douglass North is another example of a dissident from cliometrics, and Alfred Chandler provided alternative arguments for a reasoned history approach to societal change.
The cliometric analysis of the British Industrial Revolution, using counterfactuals, namely by Crafts and Hawke, is discussed and contradicted in the chapter.
Francesco Boldizzoni
- Published in print:
- 2011
- Published Online:
- October 2017
- ISBN:
- 9780691144009
- eISBN:
- 9781400838851
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691144009.003.0002
- Subject:
- Economics and Finance, Economic History
The major misunderstanding about cliometrics comes from the subsequent spread of Douglass North's new institutional approach. North claims to have challenged traditional economic theory, which he ...
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The major misunderstanding about cliometrics comes from the subsequent spread of Douglass North's new institutional approach. North claims to have challenged traditional economic theory, which he found inadequate. This chapter shows how this approach, besides being patently unhistorical, rests on flimsy foundations. In order to do so, it draws on a variety of evidence from the social and historical sciences. It also compares North's synthesis with the example of social science history offered by Moses Finley, the eminent ancient economic historian. Finley made a powerful argument against the application of modern economic theory to the past. Furthermore, he developed an alternative interpretation for the origin of institutions, rigorously demonstrating the logical precedence of society over the economy. The chapter begins by considering the criticism that Karl Polanyi made against neoclassical economics in the mid-twentieth century. In fact, both North's and Finley's works can be read as a response to Polanyi.Less
The major misunderstanding about cliometrics comes from the subsequent spread of Douglass North's new institutional approach. North claims to have challenged traditional economic theory, which he found inadequate. This chapter shows how this approach, besides being patently unhistorical, rests on flimsy foundations. In order to do so, it draws on a variety of evidence from the social and historical sciences. It also compares North's synthesis with the example of social science history offered by Moses Finley, the eminent ancient economic historian. Finley made a powerful argument against the application of modern economic theory to the past. Furthermore, he developed an alternative interpretation for the origin of institutions, rigorously demonstrating the logical precedence of society over the economy. The chapter begins by considering the criticism that Karl Polanyi made against neoclassical economics in the mid-twentieth century. In fact, both North's and Finley's works can be read as a response to Polanyi.
Paul Erickson
- Published in print:
- 2015
- Published Online:
- May 2016
- ISBN:
- 9780226097039
- eISBN:
- 9780226097206
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226097206.003.0002
- Subject:
- History, History of Science, Technology, and Medicine
Despite the ex post facto identification of a number of “anticipations” of game-theoretic results through history, it is generally agreed that modern game theory’s founding work was mathematician ...
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Despite the ex post facto identification of a number of “anticipations” of game-theoretic results through history, it is generally agreed that modern game theory’s founding work was mathematician John von Neumann and economist Oskar Morgenstern’s 1944 book, Theory of Games and Economic Behavior. Yet to a student of game theory trained in recent decades, the book must seem antique in terms of its notations, style of presentation, and terminology. This chapter is therefore principally devoted to explicating the text of von Neumann and Morgenstern’s book, emphasizing the diverse nature of its contents: a dynamic, set-theoretic depiction of games in “extensive form;” the matrix “normal form” of the game and the celebrated “minimax theorem,” with its rich connections to topology and the theory of fixed points; the “characteristic function form” of games and definition of “solutions” as non-dominated sets of imputations; and finally, the von Neumann – Morgenstern theory of utility, which constructed a measure of utility from axioms of preference ordering. These pieces of the theory were not just selectively appropriated and used by different groups of individuals after 1944, but they were also the outgrowth of varied research interests of the book’s authors in the years preceding its publication.Less
Despite the ex post facto identification of a number of “anticipations” of game-theoretic results through history, it is generally agreed that modern game theory’s founding work was mathematician John von Neumann and economist Oskar Morgenstern’s 1944 book, Theory of Games and Economic Behavior. Yet to a student of game theory trained in recent decades, the book must seem antique in terms of its notations, style of presentation, and terminology. This chapter is therefore principally devoted to explicating the text of von Neumann and Morgenstern’s book, emphasizing the diverse nature of its contents: a dynamic, set-theoretic depiction of games in “extensive form;” the matrix “normal form” of the game and the celebrated “minimax theorem,” with its rich connections to topology and the theory of fixed points; the “characteristic function form” of games and definition of “solutions” as non-dominated sets of imputations; and finally, the von Neumann – Morgenstern theory of utility, which constructed a measure of utility from axioms of preference ordering. These pieces of the theory were not just selectively appropriated and used by different groups of individuals after 1944, but they were also the outgrowth of varied research interests of the book’s authors in the years preceding its publication.
Roger Guesnerie
- Published in print:
- 2013
- Published Online:
- October 2017
- ISBN:
- 9780691155234
- eISBN:
- 9781400846450
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691155234.003.0002
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This chapter examines one line of criticism of the Rational Expectations Hypothesis (REH): expectational coordination failures. It begins by addressing the question of what went wrong with standard ...
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This chapter examines one line of criticism of the Rational Expectations Hypothesis (REH): expectational coordination failures. It begins by addressing the question of what went wrong with standard economic theory in general and with its modeling principles in particular and offers three answers relating to the diversification of modeling, the rationality hypothesis, and expectational coordination. It then considers the rise of REH in modern economic theory before discussing three avenues of criticism against REH: internal challenges, external criticisms, and criticism based on real-time learning. It also explains how a critical assessment of REH in different contexts changes the standard (REH-based) economic intuition, focusing on the question of the value of new financial instruments; the informational efficiency of the market; and the “good” expectational coordination that Real Business Cycles (RBC)-like models.Less
This chapter examines one line of criticism of the Rational Expectations Hypothesis (REH): expectational coordination failures. It begins by addressing the question of what went wrong with standard economic theory in general and with its modeling principles in particular and offers three answers relating to the diversification of modeling, the rationality hypothesis, and expectational coordination. It then considers the rise of REH in modern economic theory before discussing three avenues of criticism against REH: internal challenges, external criticisms, and criticism based on real-time learning. It also explains how a critical assessment of REH in different contexts changes the standard (REH-based) economic intuition, focusing on the question of the value of new financial instruments; the informational efficiency of the market; and the “good” expectational coordination that Real Business Cycles (RBC)-like models.
Qin Duo
- Published in print:
- 1997
- Published Online:
- November 2003
- ISBN:
- 9780198292876
- eISBN:
- 9780191596803
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198292872.003.0006
- Subject:
- Economics and Finance, History of Economic Thought, Econometrics
Addresses the issue of testing, and reveals some intrinsic problems pertaining to hypothesis testing beneath the achievements of formalizing econometrics. Theory verification through applied studies ...
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Addresses the issue of testing, and reveals some intrinsic problems pertaining to hypothesis testing beneath the achievements of formalizing econometrics. Theory verification through applied studies forms one of the main motives for formalizing methods of model estimation and identification, and the statistical theory of hypothesis testing was accepted without much dispute quite early as the technical vehicle to fulfil this desire. However, during the adoption of the theory into econometrics in the 1940s and 1950s, the achievable domain of verification turned out to be considerably reduced, as testing in econometrics proper gradually dwindled into part of the modelling procedure and pertained to model evaluation using statistical testing tools; in the applied field, empirical modellers took on the task of discriminating between and verifying economic theories against the model results, and carried this out in an ad hoc and often non‐sequitur manner. Describes how the desire to test diverged into model evaluation in econometric theory on the one hand, and economic theory verification in practice on the other, as econometric testing theory took shape. The story begins with the early period prior to the formative movement in the first section of the chapter; the following section looks at the period in which the theme of hypothesis testing was introduced, and the first test emerged in econometrics; the last two sections report, respectively, on how model testing in applied econometrics and test design in theoretical econometrics developed and moved apart.Less
Addresses the issue of testing, and reveals some intrinsic problems pertaining to hypothesis testing beneath the achievements of formalizing econometrics. Theory verification through applied studies forms one of the main motives for formalizing methods of model estimation and identification, and the statistical theory of hypothesis testing was accepted without much dispute quite early as the technical vehicle to fulfil this desire. However, during the adoption of the theory into econometrics in the 1940s and 1950s, the achievable domain of verification turned out to be considerably reduced, as testing in econometrics proper gradually dwindled into part of the modelling procedure and pertained to model evaluation using statistical testing tools; in the applied field, empirical modellers took on the task of discriminating between and verifying economic theories against the model results, and carried this out in an ad hoc and often non‐sequitur manner. Describes how the desire to test diverged into model evaluation in econometric theory on the one hand, and economic theory verification in practice on the other, as econometric testing theory took shape. The story begins with the early period prior to the formative movement in the first section of the chapter; the following section looks at the period in which the theme of hypothesis testing was introduced, and the first test emerged in econometrics; the last two sections report, respectively, on how model testing in applied econometrics and test design in theoretical econometrics developed and moved apart.
Harold O. Fried, C. A. Knox Lovell, and S. Schmidt Shelton
- Published in print:
- 2008
- Published Online:
- January 2008
- ISBN:
- 9780195183528
- eISBN:
- 9780199870288
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195183528.003.0001
- Subject:
- Economics and Finance, Econometrics
This chapter begins with a brief discussion of variations in productive efficiency using airlines as an example. It then presents the main purpose of the book, which is to study inefficiency in ...
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This chapter begins with a brief discussion of variations in productive efficiency using airlines as an example. It then presents the main purpose of the book, which is to study inefficiency in production and its impact on economic and financial performance. The chapter then provides background material and focuses on hypotheses that have been proposed in literature that would explain variation in producer performance; lays the theoretical foundation for the measurement of productive efficiency; offers a brief introduction to alternative techniques that have been developed to quantify inefficiency empirically; introduces various econometric approaches to efficiency estimation; introduces variants of the mathematical programming approach to efficiency estimation; introduces the Malmquist productivity index and shows how to decompose it into various sources of productivity change, including variation in productive efficiency; and describes three ways of approximating a Malmquist productivity index: the use of superlative index numbers, the use of econometric techniques, and the use of mathematical programming techniques. An overview of the succeeding chapters is also presented.Less
This chapter begins with a brief discussion of variations in productive efficiency using airlines as an example. It then presents the main purpose of the book, which is to study inefficiency in production and its impact on economic and financial performance. The chapter then provides background material and focuses on hypotheses that have been proposed in literature that would explain variation in producer performance; lays the theoretical foundation for the measurement of productive efficiency; offers a brief introduction to alternative techniques that have been developed to quantify inefficiency empirically; introduces various econometric approaches to efficiency estimation; introduces variants of the mathematical programming approach to efficiency estimation; introduces the Malmquist productivity index and shows how to decompose it into various sources of productivity change, including variation in productive efficiency; and describes three ways of approximating a Malmquist productivity index: the use of superlative index numbers, the use of econometric techniques, and the use of mathematical programming techniques. An overview of the succeeding chapters is also presented.
