Towards a theory of the small firm: theoretical aspects and some policy implications

Includes bibliography

The current financial and economic crisis: empirical and methodological issues

In this paper we describe the main causes of the recent financial crisis as a result of many theoretical, methodological, and practical shortcomings mostly according to heterodox, but also including some important orthodox economists. At theoretical level, there are problems concerning teaching and using economic models with overly unrealistic assumptions. In the methodological front, we find the unsuspected shadow of Milton Friedman’s ‘unrealisticism of assumptions’ thesis lurking behind the construction of this kind of models and the widespread neglect of methodological issues. Of course, the most evident shortcomings are at the practical level: (i) huge interests of the participants in the financial markets (banks, central bankers, regulators, rating agencies mortgage brokers, politicians, governments, executives, economists, etc. mainly in the US, Canada and Europe, but also in Japan and the rest of the world), (ii) in an almost completely free financial and economic market, that is, one (almost) without any regulation or supervision, (iii) decision-taking upon some not well regarded qualities, like irresponsibility, ignorance, and inertia; and (iv) difficulties to understand the current crisis as well as some biases directing economic rescues by governments. Following many others, we propose that we take this episode as an opportunity to reflect on, and hopefully redirect, economic theory and practice.

Economics and Ideology: Causal Evidence of the Impact of Economic Conditions on Support for Redistribution and Other Ballot Proposals

There is a large literature demonstrating that positive economic conditions increase support for incumbent candidates, but little understanding of how economic conditions affect preferences for parties and for particulars of their platforms. We ask how exogenous shifts to the value of residents. human capital affect voting behavior in California neighborhoods. As predicted by economic theory, we find that positive economic shocks decrease support for redistributive policies. More notably, we find that conservative voting on a wide variety of ballot propositions--from crime to gambling to campaign finance--is increasing in economic well being.

The true theory of rent in opposition to Mr. Ricardo and others : being an exposition of fallacies on rent, tithes, &c., in the form of a review of Mr. Mill's Elements of political economy /

Preface signed: T. Perronet Thompson.

Estimated employment effects of federal economic development programs : report to the chairman, Subcommittee on Economic Development, Committee on Public Works and Transportation, House of Representatives /

"August 15, 1984."

Economic markets and the standard industrial classification /

"October 1990."

Economic competition and evolution: Are there lessons from ecology?

After generally discussing models in ecology and economics that combine competition, optimization, and evolution, this article concentrates on models of intraspecific competition. It demonstrates the importance of diversity/inequalities within populations of species and other environments for the sustainability of their populations, given the occurrence of environmental change. This is demonstrated both for scramble (open-access) and contest competition. Implications are drawn for human populations and industrial organization. The possibility is raised that within-industry competition may not always exist between firms in all stages of the development of a new industry. Policy implications are considered. For example, it is argued that policies designed to encourage intense business competition and maximum economic efficiency have the drawback of eventually making industries highly vulnerable to exogenous economic changes.

Some economic dimensions of the mental health jigsaw in Australia

The purpose of this paper is to demonstrate that, although there are some unique features associated with mental illness, such special features do not preclude economic analysis. As a mechanism for understanding how individual economic studies fit into the mental health sector, a conceptual framework of the components of mental health service provision is outlined. Emphasis is placed on, not simply institutional and market resources, but also on the services provided by relatives, self-help groups, etc. Australian data on parts of the mental health sector are employed to illustrate that some (and different) economic analyses can be undertaken in mental health. First, time-series data on public psychiatric hospitals are employed to demonstrate trends associated with deinstitutionalisation. Other data (for Queensland alone) indicate that there are state-based differences in the provision of such services. Second, attention is then directed to the analysis of time-series data on private fee-for-service psychiatric services. Various concepts and measures from industrial economics are applied to analyse the relative size of this service industry, the pricing behaviour of the profession, the service-mix of "the psychiatry firms" operating in Australia.

Evaluating corporate performance:a critique of economic value added

There has been a revival of interest in economic techniques to measure the value of a firm through the use of economic value added as a technique for measuring such value to shareholders. This technique, based upon the concept of economic value equating to total value, is founded upon the assumptions of classical liberal economic theory. Such techniques have been subject to criticism both from the point of view of the level of adjustment to published accounts needed to make the technique work and from the point of view of the validity of such techniques in actually measuring value in a meaningful context. This paper critiques economic value added techniques as a means of calculating changes in shareholder value, contrasting such techniques with more traditional techniques of measuring value added. It uses the company Severn Trent plc as an actual example in order to evaluate and contrast the techniques in action. The paper demonstrates discrepancies between the calculated results from using economic value added analysis and those reported using conventional accounting measures. It considers the merits of the respective techniques in explaining shareholder and managerial behaviour and the problems with using such techniques in considering the wider stakeholder concept of value. It concludes that this economic value added technique has merits when compared with traditional accounting measures of performance but that it does not provide the universal panacea claimed by its proponents.

Heterodox gazdaságpolitikák korszaka? (An Age of Heterodox Economic Policies?)

A világ fejlett pénzügyi piacainak válságát követően önvizsgálatra kényszerült a közgazdaságtudomány, amelyet nemcsak az alternatív és heterodox irányzatok képviselői, a média és a nagyközönség, hanem a gazdasági döntéshozók részéről is erős kritikák értek. Egyidejűleg gyors változásokon ment át a gazdaságpolitikai gyakorlat, különösen a válság által erősen érintett országokban, megszaporodtak a korábbi mérvadó kormányzati gyakorlat (best practice) ajánlásaitól távol álló, nem szokványos megoldások, heterodox politikák. Az esszé szerzője meghatározó személyiségek véleményének, vezető intézmények álláspontjának és kormányzati gazdaságpolitikáknak az áttekintése alapján egyfelől azt a kérdést vizsgálja, hogy körvonalazódik-e új gazdaságelméleti irányzat, amely doktrinális alapul szolgálhatna a gazdaságpolitikai döntéshozatalhoz, másodsorban pedig: átmeneti jelenség-e az egymástól alapvetően különböző felfogású, logikájú gazdaságpolitikák egyidejű megléte, avagy várható-e egy új konszenzus kialakulása. ______ In the wake of the recent financial turmoil emanating from top financial centers, the economic profession has been forced to conduct introspection due to harsh criticism from alternative and heterodox economists, the media, and the general public as well as from decision makers. Meanwhile, the economic policy making practice has profoundly changed, particularly in countries heavily affected in the crisis; decision makers increasingly apply non customary (heterodox) measures in defiance of former best practice of economic policy making. The author of this essay, having investigated the related views of leading economists and influential international institutions and having reviewed economic policy making practice, raises two questions. One: is there a new economic theory evolving that will provide doctrinal underpinning to post crisis economic policy making? Second: is the simultaneity of widely differing economic policy practices and policy orientations a transitional phenomenon, or are there signs of a new policy consensus emerging? It may be too early to give argued answers to the questions, but the present – rather technical – economic theory mainstream seems to maintain its central position, yet is becomes more open to research topics and methods acknowledging the complexity of economic processes and social institutions, and to impulses emanating from economic practice. As for economic policy making is concerned, continuous decline of the economic importance of leading Western nations prolongs the period of heterogeneity of non conventional, heterodox policies both in advanced and in emerging countries until new policy norms, a “new normal” emerges.

Essays on the political economy of trade policy and economic *development

This dissertation studies the political economy of trade policy in a developing country, namely Turkey, under different economic and political regimes. The research analyzes the effects of these different regimes on the import structure, the trade policy and the industrialization process in Turkey and derives implications for aggregate welfare. ^ In the second chapter, the effects of trade liberalization policies on import demand are examined. Using disaggregated industry-level data, import demand elasticities for various sectors have been computed, analyzed under different economic regimes, and compared with those of developed countries. The results are statistically significant and reliable, and conform to the predictions of economic theory. Estimation of these elasticities is also a necessary ingredient for the third chapter of the dissertation. ^ The third chapter examines the predictions of the state-of-the-art “Protection For Sale” model of Grossman and Helpman (1994). Employing advanced econometric methods and a unique data set, strong support is found for the fundamental predictions of the model in the context of Turkey. Specifically, the government is found to attach a much higher weight to social welfare than to political contributions. This weight is higher under the democratic regime than under the dictatorship, a result potentially of interest to all researchers in the area of political economy. ^ The fourth chapter looks at the effects of industry concentration and import price shocks on protection, promotion and the choice of policy instruments in Turkey. In this context, it examines and finds support for the predictions of some well-known models in the literature. ^