Transition from socialism

This paper discusses the changes that socialist countries, specially in Eastern Europe, are currently undergoing. It also comments on the decline all over the world of the institution of the nation-state, and, particularly, a decline in its importance in the economy.

General Economic Equilibrium: Purpose, Analytic Techniques, Collective Choice

Lecture to the memory of Alfred Nobel, December 12, 1972general equilibrium;

Reflections on Modern Macroeconomics: Can We Travel Along a Safer Road?

In this paper we sketch some reflections on the pitfalls and inconsistencies of the research program - currently dominant among the profession - aimed at providing microfoundations to macroeconomics along a Walrasian perspective. We argue that such a methodological approach constitutes an unsatisfactory answer to a well-posed research question, and that alternative promising routes have been long mapped out but only recently explored. In particular, we discuss a recent agent-based, truly non-Walrasian macroeconomic model, and we use it to envisage new challenges for future research.Comment: Latex2e v1.6; 17 pages with 4 figures; for inclusion in the APFA5 Proceeding

Reclaiming Virtue Ethics for Economics

Virtue ethics is an important strand of moral philosophy which normative economists have largely neglected. It underpins influential critiques of the market (as a domain in which instrumental motivation corrodes virtue) and of economics (as justifying such motivation). We explain and respond to this critique. Using the methods of virtue ethics and with reference to the writings of major economists, we propose an understanding of the ‘telos’ (purpose) of markets as cooperation for mutual benefit, and identify traits that thereby count as virtues for market participants. We conclude that the market need not be seen as a virtue-free zone

Evaluating Projects and Assessing Sustainable Development in Imperfect Economies

We are interested in three related questions: (1) How should accounting prices be estimated? (2) How should we evaluate policy change in an imperfect economy? (3) How can we check whether intergenerational well-being will be sustained along a projected economic programme? We do not presume that the economy is convex, nor do we assume that the government optimizes on behalf of its citizens. We show that the same set of accounting prices should be used both for policy evaluation and for assessing whether or not intergenerational welfare along a given economic path will be sustained. We also show that a comprehensive measure of wealth, computed in terms of the accounting prices, can be used as an index for problems (2) and (3) above. The remainder of the paper is concerned with rules for estimating the accounting prices of several specific environmental natural resources, transacted in a few well known economic institutions.Sustainable development, Imperfect economies

Why bayesian “evidence for H1” in one condition and bayesian “evidence for H0” in another condition does not mean good-enough bayesian evidence for a difference between the conditions

Psychologists are often interested in whether an independent variable has a different effect in condition A than in condition B. To test such a question, one needs to directly compare the effect of that variable in the two conditions (i.e., test the interaction). Yet many researchers tend to stop when they find a significant test in one condition and a nonsignificant test in the other condition, deeming this as sufficient evidence for a difference between the two conditions. In this Tutorial, we aim to raise awareness of this inferential mistake when Bayes factors are used with conventional cutoffs to draw conclusions. For instance, some researchers might falsely conclude that there must be good-enough evidence for the interaction if they find good-enough Bayesian evidence for the alternative hypothesis, H1, in condition A and good-enough Bayesian evidence for the null hypothesis, H0, in condition B. The case study we introduce highlights that ignoring the test of the interaction can lead to unjustified conclusions and demonstrates that the principle that any assertion about the existence of an interaction necessitates the direct comparison of the conditions is as true for Bayesian as it is for frequentist statistics. We provide an R script of the analyses of the case study and a Shiny app that can be used with a 2 × 2 design to develop intuitions on this issue, and we introduce a rule of thumb with which one can estimate the sample size one might need to have a well-powered design