Causal Depth: Aspects of a Scientific Realist Approach to Causal Explanation contra Humean Empiricism

The purpose of this note is to clarify how the idea of "causal depth" can play a role in finding the more "approximately true" explanation through causal comparisons. It is not an exhaustive treatment but rather focuses on a few aspects that may be the most critical in evaluating the explanatory strengths of a theory in the social sciences. It presents a general argument which is anti-Humean on the critical side and scientific realist on the positive side. It also elucidates how explanations in political economy and other social sciences can be judged by the scientific realist criterion of causal depth by an extensive example from research in the political economy of development. In this case, an "intentional" and methodologically individualist neoclassical explanation is contrasted with a "structural" dual-dual approach as rival theories purporting to explain the same set of phenomena.Social Explanation, Causal Depth, Scientific Realism, Political Economy, Neoclassical Economics, Structuralism, Social Science Theories, Economic Models

Divestment and Climate Change

In January of 2016, a number of Laurier faculty signed a letter (hereafter “The Letter”) urging the University to divest from fossil fuel companies in all endowment funds and the employee pension.1 This research note addresses a number of issues related to the divestment strategy—in particular, the stranded asset thesis, financial strategy alternatives, implementation challenges and the financial effects of divestment strategies. This note does not consider alternative strategies for decarbonizing the economy. The Letter itself does not explain why divestment is superior to alternatives like promoting research into clean energy generation, renewable energy sources, climate science, and environmental economics. The Letter articulates two goals. The first part of The Letter argues that, “Sooner or later, the world is going to get serious about regulating carbon emissions and when it does assets will likely be stranded.” This argument supports a risk management goal: that portfolio managers should hedge the risk of stranded assets. The second goal, articulated later in The Letter, is more revolutionary. In particular, that “the present generation…have a duty to help decarbonize the global economy as rapidly as possible.” Establishing the goal is important because the goal informs the optimal financial strategy. If the goal is to hedge stranded asset risk, then the best risk management strategies are: 1) diversification; or 2) portfolio reweighting. If the goal is to decarbonize the economy, then diversification and reweighting will have little effect. The financial strategy with the most potential to influence corporate behavior is full divestment. The remainder of this note is organized as follows. The second section defines the stranded asset thesis and contrasts it to another thesis. The third section defines two alternative financial strategies: divestment and reweighting. The fourth section discusses the challenge of using GHG emissions data to implement divestment or reweighting. The fifth section presents the financial theory of divestment and empirical evidence on the impact of divestment on risk and return. The sixth section concludes

Measuring the Drivers of Metropolitan Growth: The Export Price Index

The Export Price Index (EPI) is a measure of exogenous price shocks to a city’s export industries. Thus far the EPI has been used to estimate models of metropolitan statistical area employment demand and appears to capture exogenous demand shocks to the regional economy. This article explains the intuition behind and construction of the EPI. Glaeser (2008) has noted that because “the economic theory of cities emphasizes a search for exogenous causes of endogenous outcomes like local wages, housing prices, and city growth, it is unsurprising that the economic empirics on cities have increasingly focused on the quest for exogenous sources of variation.” The EPI is such an exogenous cause. The EPI data discussed in this note are available through The George Washington University Center for Economic Research website at http://www.gwu.edu/~cer1/datasets/datasets.html

Causal Depth contra Humean Empiricism: Aspects of a Scientific Realist Approach to Explanation

The purpose of this note is to clarify how the idea of "causal depth" can play a role in finding the more "approximately true" explanation through causal comparisons. It is not an exhaustive treatment but rather focuses on a few aspects that may be the most critical in evaluating the explanatory strengths of a theory in the social sciences. It presents a general argument which is anti-Humean on the critical side and scientific realist on the positive side. It also elucidates how explanations in political economy and other social sciences can be judged by the scientific realist criterion of causal depth by an extensive example from research in the political economy of development. In this case, an "intentional" and methodologically individualist neoclassical explanation is contrasted with a "structural" dual-dual approach as rival theories purporting to explain the same set of phenomena. The formal model representing the dual-dual approach can easily be contrasted with its neoclassical counterpart. The comparison shows that the dual-dual model is indeed deeper in terms of causal structure than the neoclassical modelEconomic Models, Social Explanation,Causal Depth, Scientific Realism, Political Economy, Neoclassical Economics, Structuralism, Social Science Theories

Walras' law in the context of pre-analytic visions: a note

Walras' law is central to the formation of economic theory. For mainstream economics, it is a device for testing rigorousness and consistency of model-building; for heterodox economists, the refutation of Walras' law is key to understanding Keynes’ revolutionary contribution to a new economic paradigm. The purpose of this short research note is to elaborate on the possibility of a refutation of Walras' law and to inquire into its preconditions. It will be argued that this can only be achieved on the basis of an alternative pre-analytic vision of a genuine monetary economy as forshadowed by John Maynard Keynes

Capitalism as a System of Expectations: Toward a Sociological Microfoundation of Political Economy

Political economy and economic sociology have developed in relative isolation from each other. While political economy focuses largely on macro phenomena, economic sociology focuses on the embeddedness of economic action. The article argues that economic sociology can provide a microfoundation for political economy beyond rational actor theory and behavioral economics. At the same time political economy offers a unifying research framework for economic sociology with its focus on the explanation of capitalist dynamics. The sociological microfoundation for understanding of capitalist dynamics should focus on the expectations actors have regarding future states of the world. Based on a discussion of what I call the four Cs of capitalism (credit, commodification, creativity, and competition), I argue that under conditions of uncertainty, expectations are contingent and should be understood as “fictional expectations.” The capability of humans to imagine future states of the world that can be different from the present is the central basis for a sociological microfoundation of the dynamics of economic macro phenomena. Macroeconomic dynamics are anchored in these “fictional expectations,” which create motifs for engaging in potentially profitable but ultimately incalculable outcomes. This shifts attention to the “management of expectations” as a crucial element of economic activity and to the institutional, political, and cultural foundations of expectations. The reproduction of capitalism is precarious also because of the contingency of expectations conducive to its growth.The Four Cs of Capitalism Creativity (Innovation) Credit Commodification Competition Conclusion Acknowledgements Note

Antecedents of low carbon emissions supply chains

Purpose: A low-carbon economy is the pressing need of the hour. Despite several efforts taken by the government and large corporations, there is still research to be conducted exploring the role of top management commitment in translating external pressures into responses that help to build low-carbon emissions in supply chains. Design/methodology/approach: The authors have grounded their framework in institutional theory, agency theory and contingency theory. On the basis of existing literature, four hypotheses were drawn. To test these hypotheses, a questionnaire was developed and pre-tested. Finally, statistical analyses were performed to test the research hypotheses using 176 samples gathered using a pre-tested questionnaire following Dillman’s (2007) total design test method. Findings: The results suggest that coercive pressures and mimetic pressures under the mediating effect of top management commitment have a significant influence on organizational response to low-carbon emissions. The authors further note that supply base complexity has moderating effects on the link between top management commitment and organizational response towards low-carbon emissions. Originality/value: This study offers valuable insights to those managers and environmental consultants who view supply base complexity as a limitation. However, the results indicate that supply base complexity may help to enhance the effectiveness of the top management commitment on organizational response towards low-carbon emissions

Adaptation of Novel into The Film Inferno 2016

This research discussed about adaptation of novel into the film Inferno 2016. This research aimed to find out adaptation of novel into film that found what the differences are and adapter‘s motivation or reason in the changes of both works that related with the audiences‘ commentary. The research focused on what and why of four chapters in Linda Hutcheon theory about the differences and the motivation. Then, the data were analyzed using qualitative method. The researcher used note taking as the instrument to find out the valid data. This findings show that there were two different among the structural and mix of plays between novel and film, and the motivation or reason of adapter adapting the novel into the film. The researcher concluded that the differences in the structural and the mix play are character, plot and setting and three motivations or reasons of the adapter are the economy, the legal constrains, and the audience

A profile of border protection in Egypt : an effective rate of protection approach adjusting for energy subsidies

This study examines recent effective rates of protection across the Egyptian economy, using an ad valorem price wedge introduced by nontariff barriers and energy subsidies, and compares today's effective rates of protection with those of a decade ago. The study uses 23 aggregated sectors from input-output matrix information. Although trade liberalization since the late-1990s has had a considerable impact in reducing protection of some industries, some sectors, such as the food and tobacco sector, remain relatively highly protected, due to tariff escalation and nontariff barriers, and due to energy subsidies. Energy subsidies are not formally sector specific but do favor sectors that are energy intensive (of particular note is the electricity sector). It appears that energy pricing is part of a strategy to subsidize and promote certain industries and in effect offset the dis-protection or taxation that results from tariffs on intermediate inputs. The case of the cement sector is notable because energy subsidies appear to almost exactly offset the negative impacts of tariffs and indirect taxes. The fertilizer sector has zero nominal tariffs, benefiting agriculture, and so a negative effective rate of protection due simply to tariffs on intermediate inputs. However, the fertilizer sector ends up with a very high a positive total effective rate of protection due to energy subsidies.Transport Economics Policy&Planning,Energy Production and Transportation,Economic Theory&Research,Taxation&Subsidies,International Trade and Trade Rules

Unbridgeable: Why Political Economists Cannot Accept Capital as Power

capital as power Marxism neoclassical economics political economy valueThe theory of capital as power (CasP) is radically different from conventional political economy. In the conventional view, mainstream as well as heterodox, capital is seen a ‘real’ economic entity engaged in the production of goods and services, and capitalism is thought of as a mode of production and consumption. Finance in this approach is either a mere reflection/lubricant of the real economy (the mainstream view), or a parasitic fiction (the heterodox perspective). CasP rejects this framework. Capital, it argues, is not a productive economic entity, but a symbolic representation of organized societal power writ large, and capitalism should be analysed not as a mode of production and consumption, but as a mode of power. In this approach, finance is neither a reflection nor a fiction, but the symbolic language that organizes and creorders – or creates the order of – capitalized power. These are foundational claims. They go to the very heart of political economy, and they have far-reaching implications. So far-reaching, in fact, that if we accept them, we must rewrite, often from scratch, much of the theory, history and possible futures of the capitalist order. Many have complained about CasP being aloof. Our approach, they have argued, insists on being ‘right’ – to the exclusion of all others. It shows no interest in ‘building bridges’. It dismisses neoclassical liberalism altogether, and although sometimes sympathetic to Marx, it aims not to revise Marxism, but to discard it altogether. In this research note – excerpted and revised from our 2020 invited-then-rejected interview with Revue de la regulation – we explain the basis for these complaints and why CasP and conventional political economy cannot be easily bridged. Stated briefly, the problem is not unwillingness but built-in barriers. As it stands, political economy cannot accept capital as power. Its very foundations prevent it from doing so