Integrum - Databases from Russia and CIS - New possibilities for economists

Integrum-aineistokoulutuksen 28.9. - 29.9.2011 koulutusmateriaali

Freedom of choice and bounded rationality: a brief appraisal of behavioral economists' plea for light paternalism

Behavioral economics has addressed interesting positive and normative questions underlying the standard rational choice theory. More recently, it suggests that, in a real world of boundedly rational agents, economists could help people to improve the quality of their choices without any harm to autonomy and freedom of choice. This paper aims to scrutinize available arguments for and against current proposals of light paternalistic interventions mainly in the domain of intertemporal choice. It argues that incorporating the notion of bounded rationality in economic analysis and empirical findings of cognitive biases and self-control problems cannot make an indisputable case for paternalism.

An Economists View of Web Science

Social Networking explained by an economic model of cost and benefit.

Rapid climate change: an overview for economists

The possibility of future rapid climatic changes is a pressing concern amongst climate scientists. For example, an abrupt collapse of the ocean's Thermohaline Circulation (THC) would rapidly cool the northern hemisphere and reduce the net global primary productivity of vegetation, according to computer models. It is unclear how to incorporate such low-probability, high-impact events into the development of economics policies. This paper reviews the salient aspects of rapid climate change relevant to economists and policy makers. The main scientific certainties and uncertainties are clearly delineated, with the aim of guiding economics goals and ensuring that they retain fidelity to their scientific underpinnings.

Economists are not dismal, the world is not a Petri dish and other reasons for optimism

One of the recurrent themes in the debate around how to ensure global food security concerns the capacity of the planet to support its growing population. Neo-Malthusian thinking suggests that we are in a situation in which further expansion of the population cannot be supported and that the population checks, with their dismal consequences envisaged by Malthus, will lead to a new era of stagnant incomes and population. More sophisticated models of the link between population and income are less gloomy however. They see population growth as an integral component of the economic growth which is necessary to ensure that the poorest achieve food security. An undue focus on the difficulties of meeting the demands of the increasing population risks damaging this growth. Instead, attention should be focused on ensuring that the conditions to ensure that economic growth accompanies population growth are in place.

Consensus and dissension among Mexican economists

Includes bibliography

Greek Economists for Reform.com

This blog publishes articles by leading academic economists on issues relevant to economic policy and reforms in Greece. The crisis in Greece is also a time of opportunity: ambitious reforms can be undertaken that will not only stave off bankruptcy, but also modernize Greece’s economy and raise the productivity and incomes of Greek citizens on a sustainable basis. The articles in this blog aim to offer constructive proposals and impartial analysis of potential, proposed or implemented reforms that are based on the principles of modern economics and on lessons from recent cutting-edge research.

Conversations between Anthropologists and Economists

Interdisciplinary citation patterns and other indicators of the flow and sharing of academic knowledge suggest that economists and anthropologists do not talk to each other. Previous studies of this puzzling trend have typically attributed the problem to methodological differences between the two disciplines. Although there are significant differences between economics and anthropology in behavioral assumptions and modes of inquiry, similar differences exist between them and other disciplines (some with much heavier volumes of cross-citations with economics or anthropology), suggesting that the source of the problem lies elsewhere. This paper considers the problem at a deeper level by examining systematic differences in the preferences, capabilities, and literary cultures of economists and anthropologists. Adopting a rhetorical perspective, I consider not the firms, households, or tribes as the principal objective of analysis in the two disciplines, but the conversations between these units. These conversations (through non-verbal as well as verbal media) can be grouped into two genres, based on the type of problem they aim to solve. Those in the first genre aim to solve the problem of interest--how to align the incentives of the parties involved. Those in the second genre deal with the problem of knowledge--how to align localized, and dispersed information. Economists are interested and capable of dealing with primarily, if not exclusively, the first genre, and anthropologists focus on the second. This difference has far reaching consequences for how economists and anthropologists conduct their own scholarly conversations with their own colleagues, why they are having difficulty talking to each other across disciplinary boundaries, and what can be done to change the patterns of communication.

Latin American Agricultural Trade: The Role of the WTO in Sustainable Virtual Water Flows, European Association of Agricultural Economists

International agricultural trade has been growing significantly during the last decade. Many countries rely on imports to ensure adequate food supplies to the people. A few are becoming food baskets of the world. This process raises issues about the food security in depending countries and potentially unsustainable land and water use in exporting countries. In this paper, we analyse the impacts of amplified farm trade on natural resources, especially water. Farm exports and imports of five Latin America countries (Brazil, Argentina, Mexico, Peru and Chile) are examined carefully. A preliminary analysis indicates that virtual water imports can save valuable water resources in water-short countries, such as Mexico and Chile. Major exporting countries, including Brazil and Argentina, have become big exporters due to abundant natural resource endowments. The opportunity costs of agricultural production in those countries are identified as being low, because of the predominant green water use. It is concluded that virtual water trade can be a powerful tool to alleviate water stress in semi-arid countries. However, for exporting nations a sustainable water use can only be guaranteed if environmental production costs are fully reflected in the commodity prices. There is no basis for erecting environmental trade tariffs on exporters though. Setting up legal foundations for them in full compliance with WTOs processes would be a daunting task.

Don't blame the economists. It is an inverse problem!

The seriousness of the current crisis urgently demands new economic thinking that breaks the austerity vs. deficit spending circle in economic policy. The core tenet of the paper is that the most important problems that natural and social science are facing today are inverse problems, and that a new approach that goes beyond optimization is necessary. The approach presented here is radical in the sense that it identifies the roots in key assumptions in economic theory such as optimal behavior and stability to provide an inverse thinking perspective to economic modeling, of use in economic and financial stability policy. The inverse problem provides a truly multidisciplinary platform where related problems from different disciplines can be studied under a common approach with comparable results.