The birth of modern economic science Reading Gilles Campagnolo’s book

The 1870s have always held a special attraction for specialists in the history of thought. For economic theory these are the years of the Great Crossroads when economic theory was at critical breaking point, after which several powerful theoretical streams emerged that were to determine later on the overall course of the evolution of economics. The book by the French economist and philosopher Gilles Campagnolo is an attempt to find out exactly what happened in the years of the Great Crossroads. It offers not only factual and historical reading, but also theoretical interpretation to explaining the evolution, mutual influence and int ermingling of the above individual schools of thought in the economic science. The present paper is a review essay on Gilles Campagnolo’s new book.history of economic thought, Austrian analysis

Lenin and the Currency Competition Reflections on the NEP Experience

Institutional competition stirs the interest of economists following a certain cyclical pattern. In this context, it is very interesting to look back at the experience of Lenin and the Bolsheviks of adopting monetary competition to stabilize their political and economic power after the crash of the war communism (and the attempts to annihilate money). The currency competition lasts less than two years and ends up with establishing the chervonetz as the only monetary unit. As a whole, this can be considered a successful economic experience. Nevertheless, the main conditions for effective institutional competition were not met – the two currencies were unequally positioned and, what is more, the institutional complementarity principle was not present. Other basic market institutions were lacking or much diminished in functions – mostly the property rights, the principle of free price setting as well as competition in the political and ideological sphere. In general, the NEP model is utterly controversial and its market structure is to a great extent false. This is what actually doomed monetary stability afterwards and left no room for money competition to spread its wings. Despite all these shortcomings, even in its reduced form, the monetary competition, gives a number of positive, though only temporary, results. This reveals the presence of purely technological characteristics of currency competition related to the behavior of money users. In part one we remind briefly of the chronology of events in the first years of the Bolshevik’s regime; part two shows the dynamics of currency competition between the sovznak and the chervonetz, and in the last part we attempt to draw some theoretical observations related to the necessary conditions for a successful institutional competition.currency competition, institutional complementarity, economic history of Russia

Economic and Social Thoughts of Ivan Pososhkov (1652-1726)

In this paper, I will try to address some criticism to Bruno Leoni’s general theory of law and society. In his well known book Freedom and the Law (1961) –in the opinion of some Italian scholars, to be considered a libertarian Manifesto–, he stressed at least five main points: i) legislation is incompatible with the long-run certainty of the law, that is when the law is not properly the result of the exercise of the arbitrary will of particular men; ii) courts of justice describe or discover the law, and do not make the law; iii) courts cannot be considered as legislators, not only because of their psychological attitude towards the law, which they discover, and do not create, but above all because of their fundamental dependance on the parties concerned in their process of making the law: so, a court must not be allowed to reverse its precedents – at least to a certain extent; iv) the whole process, and so the law, can be described as a sort of vast, continuous, and chiefly spontaneous collaboration between the judges and the judged in order to discover what the people’s will is in a series of definite instances –a collaboration that in many respects may be compared to that existing among all the partecipants in a free market; v) in our time, the mechanism of the judiciary in certain countries where supreme courts are established results in the imposition of the personal views of the members of these courts, or of a majority of them: it is a somewhat contradictory introduction of the legislative process under the deceptive label of lawyers’ or judiciary law at its highest stage. It seems to me that Leoni’s theory of law and society as a normative doctrine for a «libertarian», or «post-hayekian», society is not entirely successful: in particular, topics as the relation between law and legislation, the proper sense of legal concepts (if any), and the possibility to survive for individual freedom as a non-historical but ideological concept within an open, i.e. democratic , society, will be put under scrutiny in the paper, according to Leoni’s doctrine of law as an individual claimhistory of economic and social thought, Russia

The Bulgarian Economic Thought since 1989: A Personal View

The objectives of this paper could be brought to three. First, a methodological one, to explain how economic knowledge disseminates and what its channels are, as well as the basic transmission mechanisms of economic theory in Bulgaria after the disintegration of the socialist bloc. Second, a purely informational objective, to present the major topics and issues studied over the period 1989-2009, and, of course, the economists working on them. And a third and parallel task to interpret theoretically the development of the Bulgarian economic thought during that period, its character and specificities.economic thought, economic knowledge, post-communist economy, Bulgaria

Monetary Convergence on the Road to EMU: Conceptual Issues for Eastern Europe

Traditional monetary and economic convergence in accordance with the Optimal Currency Areas model has a number of limitations. Above all, it fails to assess the state of formal and informal monetary institutions. Adequate for an industrial society, it does not address the change to a globalising information society, being mainly quantitative, aggregated, and generally mechanical. This removes it from reality, though keeping it close to a quantitative presentation. It fails to take into account invisible threats to convergence and East European country realities involving informal monetary institutions and differences in institutional development. Monetary regime efficiency is judged solely by Maastricht criteria fulfilment. These limitations may be overcome in two ways. The first is to take into account the institutional aspect of money, enabling discussion of institutional monetary convergence. The second way is to adopt institutional monetary competition, allowing at least some institutional competition in EEC monetary regimes in the run up to euro adoption and possibly allowing the euro to circulate in parallel with national currencies.institutional and monetary convergence, Eastern Europe

Dual Inflation Under the Currency Board: The Challenges of Bulgarian EU Accession

The importance of analysing inflation sources and dynamics in Bulgaria is imposed by (i) the long run process of price and inflation convergence to the Euro area and (ii) by the Currency Board operating in the country. In this study we make an attempt to estimate Balassa - Samuelson (BS) effect in Bulgaria (after the introduction of the Currency Board). The BS explanation of inflation (or dual inflation) has acquired both academic recognition and popularity in practice in the recent years. The results of our empirical estimation do not provide a robust verification of the existence of BS effect in spite of the observed prerequisites and the accompanying economic indicators interrelations. Actually there are several factors that interfere with the BS effect lying in the wage convergence process in both sectors and others that influence productivity developments in the sectors. This prompts that the price movement in the country has other driving motions – above all wage setting and incomplete price liberalization, other factors productivity, imported inflation (pass trough) and inflation generated by the temporary gaps between money demand and money supply.http://deepblue.lib.umich.edu/bitstream/2027.42/39872/3/wp487.pd

Dynamics of the Financial Wealth of the Institutional Sectors in Bulgaria: Empirical Studies of the Post-Communist Period

The question of who benefits and who loses from the transition, the channels and mechanisms of redistribution of wealth in the post-communist period, and the relation between redistribution and monetary regime are, in our opinion, fundamental in understanding theoretically the deep systemic changes in Eastern Europe. This article has two basic tasks ñ one empirical and one theoretical. Our empirical task is to analyse the dynamics of the financial wealth of the institutional sectors in Bulgaria in the period 1998-2005 and to identify the major net creditors and net debtors. The empirical data used for the purpose are based on adapted methodology for the financial account of the Bulgarian economy according to the requirements of the System of National Accounts (SNA). Econometric simulations have been carried out of the major factors conditioning the change in the sectoral financial wealth. The empirical investigations are given in Part 3. Our theoretical task is to prove the hypothesis (which is to a large extent supported by the empirical results) about the functional relationship between the dynamics of redistribution and the change in monetary regime. This is presented in Part 2 and is discussed in Part 4.http://deepblue.lib.umich.edu/bitstream/2027.42/57244/1/wp864 .pd

Measuring the Institutional Change of the Monetary Regime in a Political Economy Perspective (Groups of interest and monetary variables during the Currency Board introduction in Bulgaria)

The paper explores the possibilities to measure the institutional change in the monetary field. A political economy theoretical framework is built up, where the change of the monetary regime is analyzed as the outcome of the debtors - creditors interactions. In this perspective, the value of some traditional monetary variables during the period before and after the introduction of the Currency Board in Bulgaria, in 1997, reveals the main actors' evolving relative positions.http://deepblue.lib.umich.edu/bitstream/2027.42/40118/3/wp732.pd

Dynamics of the Financial Wealth of the Institutional Sectors in Bulgaria: Empirical Studies of the Post-Communist Period

The question of who benefits and who loses from the transition, the channels and mechanisms of redistribution of wealth in the post-communist period, and the relation between redistribution and monetary regime are, in our opinion, fundamental in understanding theoretically the deep systemic changes in Eastern Europe. This article has two basic tasks – one empirical and one theoretical. Our empirical task is to analyse the dynamics of the financial wealth of the institutional sectors in Bulgaria in the period 1998-2005 and to identify the major net creditors and net debtors. The empirical data used for the purpose are based on adapted methodology for the financial account of the Bulgarian economy according to the requirements of the System of National Accounts (SNA). Econometric simulations have been carried out of the major factors conditioning the change in the sectoral financial wealth. The empirical investigations are given in Part 3. Our theoretical task is to prove the hypothesis (which is to a large extent supported by the empirical results) about the functional relationship between the dynamics of redistribution and the change in monetary regime. This is presented in Part 2 and is discussed in Part 4.redistribution, financial wealth, financial account, Bulgaria

Deposit Insurance During EU Accession

The paper presents a brief review of the systems of deposit insurance in accession countries, comparing their level of harmonization with the perspective of their EU integration. Studying the different practices of deposit insurance in the context of developing financial safety nets in future Europe we have found that: (i) there is overinsurance of deposits in accession countries, and (ii) that this could lead to increasing moral hazard, incentives deformation and increasing costs of banking intermediation in the whole euro area.http://deepblue.lib.umich.edu/bitstream/2027.42/40003/3/wp617.pd