Uma Análise Crítica da Função de Produção Neoclássica - O processo de produção na indústria e na agricultura

Paradoxalmente, a satisfação dos economistas com a linguagem meramente simbólica nunca foi tão patente como no caso da função de produção. Em contraste, tal linguagem foi freqüentemente contestada no caso da função-utilidade e a existência desta função já foi excessiva e minuciosamente discutida. Provavelmente, esta assimetria não existe. sem razão. Os economistas matemáticos dirigiram seus maiores esforços no sentido de defender a função-utilidade, na medida que passaram a sofrer críticas contundentes daqueles que se opunham ao uso do instrumental matemático na Economia, sob alegação de que o comportamento humano não pode ser analisado através de leis matematicamente rígidas. Conquanto seja discutível a validade desta explicação, o fato é que o conceito de função de produção tem sido tratado de uma forma bastante insatisfatória

A Natural Value Unit - Econophysics as Arbiter between Finance and Economics

Foreign exchange markets show that currency units (= accounting or nominal price units) are variables. Technical and economic progress evidence that the consumer baskets (= purchasing power units or real price units) are also variables. In contrast, all physical measurement units are constants and either defined in the SI (= metric) convention or based upon natural constants (= "natural" or Planck units). Econophysics can identify a constant natural value scale or vaue unit (natural numaraire) based upon Planck energy. In honour of the economist L. Walras, this "Planck value" could be called walras (Wal), thereby using the SI naming convention. One Wal can be shown to have a physiological and an economic interpretation in that it is equal to the annual minimal real cost of physiological life of a reference person at minimal activity. The price of one Wal in terms of any currency can be estimated by hedonic regression techniques used in inflation measurement (axiometry). This pilot research uses official disaggregated Swiss Producer and Consumer Price Index data and estimates the hedonic walras price (HWP), quoted in Swiss francs in 2003, and its inverse, the physical purchasing power (PhPP) of the Swiss franc in 2003.Comment: 19 pages, 1 table, Appendix with 2 tables, RevTex4, APFA5 200

Energy, Aesthetics and Knowledge in Complex Economic Systems

It is argued that the fact that economic systems are dissipative structures must be taken fully into account in economics if we are to understand the nature of the economic-ecological interface and how to deal with emergent environmental problems, such as global warming. Such problems are a product of economic growth, which is widely accepted to be the outcome of the acquisition and application of knowledge. Drawing upon disparate literatures within and outside economics, it is argued that economic growth should be more properly viewed as the outcome of a co-evolutionary process that involves the autocatalytic interaction of new knowledge and access of increasing amounts of free energy to do increasingly specialized forms of work. The conventional view is that energy is just a factor of production used increasingly as new knowledge is employed. The possibility of reverse causation is considered here. Specifically, the relevance of the ‘energy hypothesis,’ associated with Eric Schneider and his collaborators, is assessed. This hypothesis states that all dissipative structures have, as their primary objective, the reduction of accessible free energy gradients. It is concluded that such a hypothesis cannot be rejected in the context of economic behaviour and that this opens up an important research agenda for economists. It is argued that such research has to be interdisciplinary because our economic behaviour is driven by aspirational goals which are aesthetic constructions in the mind and strongly connected to our emotions. In this regard, recent neuropsychological literature, arguing that certain emotional dispositions are necessary before we can employ our cognitive capabilities effectively, is important to digest. Thus, the possibility exists that it is in the emotional domain of the mind that the energy hypothesis is operative. Aesthetic constructions are, thus, connecting agents in the knowledge-energy co-evolutionary process. Some of the macroeconomic evidence concerning the relationship between free energy use and economic growth is considered and it is found that the energy hypothesis cannot be rejected in the economic domain. However, considerably more research needs to be undertaken before any firm conclusions can be drawn

A stock-flow-fund ecological macroeconomic model

This paper develops a stock-flow-fund ecological macroeconomic model that combines the stock-flow consistent approach of Godley and Lavoie with the flow-fund model of Georgescu-Roegen. The model has the following key features. First, monetary and physical stocks and flows are explicitly formalised taking into account the accounting principles and the laws of thermodynamics. Second, Georgescu-Roegen’s distinction between stock-flow and fund-service resources is adopted. Third, output is demand-determined but supply constraints might arise either due to environmental damages or due to the exhaustion of natural resources. Fourth, climate change influences directly the components of aggregate demand. Fifth, finance affects macroeconomic activity and the materialisation of investment plans that determine ecological efficiency. The model is calibrated using global data. Simulations are conducted to investigate the trajectories of key environmental, macroeconomic and financial variables under (i) different assumptions about the sensitivity of economic activity to the leverage ratio of firms and (ii) different types of green finance policies

Structural Learning: Embedding discoveries and the dynamics of production

Production and learning of productive knowledge are profoundly intertwined processes as the activation of either process triggers the other, very often implying interdependent transformations. The paper aims to open the ‘production black box’ by proposing the analytical map of production as a tool for disentangling the set of interdependent relationships among capabilities, tasks and materials. The concept of structural learning is introduced to identify the continuous process of structural adjustment triggered and oriented by existing productive structures at each point in time. Structural learning trajectories allow for the transformation of structural constraints such as bottlenecks and technical imbalances into structural opportunities. Complementarities, similarities and indivisibilities are essential focusing devices for activating compulsive sequences of technological change as well as discovering structurally embedded opportunities. The paper then investigates the tension between structure and agency present in structural learning trajectories, and examines the form it takes in different productive organisations

Thermodynamic entropy as an indicator for urban sustainability?

As foci of economic activity, resource consumption, and the production of material waste and pollution, cities represent both a major hurdle and yet also a source of great potential for achieving the goal of sustainability. Motivated by the desire to better understand and measure sustainability in quantitative terms we explore the applicability of thermodynamic entropy to urban systems as a tool for evaluating sustainability. Having comprehensively reviewed the application of thermodynamic entropy to urban systems we argue that the role it can hope to play in characterising sustainability is limited. We show that thermodynamic entropy may be considered as a measure of energy efficiency, but must be complimented by other indices to form part of a broader measure of urban sustainability

Powering production. The case of the sisal fibre production in the Tanga region, Tanzania

Energy plays a crucial role in economic development. The article presents a framework for the analysis of alternative energy technology mixes in agricultural production and applies it in the context of sisal production in the Tanga region, Tanzania. Through scenario analysis, the paper presents both case-specific and generalizable insights. Case-specific insights show the key role that modern uses of energy and modern agricultural technologies could play in increasing productivity and revenues, in minimizing environmental degradation, and in promoting local development. Generalizable insights demonstrate the value of using sector-specific micro-structural frameworks and scenario analysis for assessing different technologies mixes in the energy and agriculture planning process

Tail risk constraints and maximal entropy

Portfolio selection in the financial literature has essentially been analyzed under two central assumptions: full knowledge of the joint probability distribution of the returns of the securities that will comprise the target portfolio; and investors’ preferences are expressed through a utility function. In the real world, operators build portfolios under risk constraints which are expressed both by their clients and regulators and which bear on the maximal loss that may be generated over a given time period at a given confidence level (the so-called Value at Risk of the position). Interestingly, in the finance literature, a serious discussion of how much or little is known from a probabilistic standpoint about the multi-dimensional density of the assets’ returns seems to be of limited relevance. Our approach in contrast is to highlight these issues and then adopt throughout a framework of entropy maximization to represent the real world ignorance of the “true” probability distributions, both univariate and multivariate, of traded securities’ returns. In this setting, we identify the optimal portfolio under a number of downside risk constraints. Two interesting results are exhibited: (i) the left- tail constraints are sufficiently powerful to override all other considerations in the conventional theory; (ii) the “barbell portfolio” (maximal certainty/ low risk in one set of holdings, maximal uncertainty in another), which is quite familiar to traders, naturally emerges in our construction