This book uncovers and resolves an inconsistency in orthodox theoretical price systems. This inconsistency arises because the systems lack an aspect to the behavior of individuals and firms. However, this inconsistency is resolved in the book which leads to a more general approach to price systems compared to the orthodox approach. There are many consequences of this new approach to price systems; but most generally, it integrates microeconomic and macroeconomic systems, systems that are dichotomized.
This book establishes that there is a fault or inconsistency in the orthodox classical price system. This suppresses in the system the general economic logic that should characterize all price systems. This mars the orthodox classical system in various ways, for example, by bringing an incorrect form of Say's Law into the system that restricts it to long-run states. However, the inconsistency in the orthodox classical system is resolved in the book through a revised classical system. This gives the latter system a more general character than the orthodox form of the system. This is reflected, for example, in the revised classical system being rid of the incorrect form of Say's Law that restricts the orthodox classical system to long-run states.
This book contains the most sustained and serious attack on mainstream, neoclassical economics in more than forty years. Nelson and Winter focus their critique on the basic question of how firms and industries change overtime. They marshal significant objections to the fundamental neoclassical assumptions of profit maximization and market equilibrium, which they find ineffective in the analysis of technological innovation and the dynamics of competition among firms. To replace these assumptions, they borrow from biology the concept of natural selection to construct a precise and detailed evolutionary theory of business behavior. They grant that films are motivated by profit and engage in search for ways of improving profits, but they do not consider them to be profit maximizing. Likewise, they emphasize the tendency for the more profitable firms to drive the less profitable ones out of business, but they do not focus their analysis on hypothetical states of industry equilibrium. The results of their new paradigm and analytical framework are impressive. Not only have they been able to develop more coherent and powerful models of competitive firm dynamics under conditions of growth and technological change, but their approach is compatible with findings in psychology and other social sciences. Finally, their work has important implications for welfare economics and for government policy toward industry.
“Mr. Minsky long argued markets were crisis prone. His 'moment' has arrived.” -The Wall Street Journal In his seminal work, Minsky presents his groundbreaking financial theory of investment, one that is startlingly relevant today. He explains why the American economy has experienced periods of debilitating inflation, rising unemployment, and marked slowdowns-and why the economy is now undergoing a credit crisis that he foresaw. Stabilizing an Unstable Economy covers: The natural inclination of complex, capitalist economies toward instability Booms and busts as unavoidable results of high-risk lending practices “Speculative finance” and its effect on investment and asset prices Government's role in bolstering consumption during times of high unemployment The need to increase Federal Reserve oversight of banks Henry Kaufman, president, Henry Kaufman & Company, Inc., places Minsky's prescient ideas in the context of today's financial markets and institutions in a fascinating new preface. Two of Minsky's colleagues, Dimitri B. Papadimitriou, Ph.D. and president, The Levy Economics Institute of Bard College, and L. Randall Wray, Ph.D. and a senior scholar at the Institute, also weigh in on Minsky's present relevance in today's economic scene in a new introduction. A surge of interest in and respect for Hyman Minsky's ideas pervades Wall Street, as top economic thinkers and financial writers have started using the phrase “Minsky moment” to describe America's turbulent economy. There has never been a more appropriate time to read this classic of economic theory.
The purpose of this paper is to empirically determine the effects of political instability on economic growth. Using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, we find that higher degrees of political instability are associated with lower growth rates of GDP per capita. Regarding the channels of transmission, we find that political instability adversely affects growth by lowering the rates of productivity growth and, to a smaller degree, physical and human capital accumulation. Finally, economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect.
This book is in equal parts a treatise on morality and economics, a critique of neoclassical orthodoxy, a brief for replacing mainstream economics with a radical political economics, and an argument for the abandonment of neoliberal capitalism in favor of democratic socialism. It includes a detailed proposal for a "demand and cost" alternative to "supply and demand" analysis and an in-depth technical critique of both neoclassical "high theory" and "applied microeconomic analysis" demonstrating that these are not only infeasible or immoral, but have directly contributed to public policy disasters. Further, the book suggests that only a moral economics in the form of radical political economy can address the looming economic and environmental crises of today’s world. Baiman begins with an introduction to morality and ethics in both general sciences and in economics in particular. He then guides readers through evidence of how neoclassical economics has not only failed to remain objective and value-free, but has become an ideology of apologetics protecting an immoral system. In addition to breaking down real-world examples to demonstrate his assertions, Baiman analyzes a theoretical Utopia design exercise. He concludes by arguing that the only form of economics that supports widely shared human values—such as social equity, democracy, and solidarity—is so-called "radical economics", and that all true economics science should be directed toward achieving more socially productive economic activity. An invaluable guide to morality and economics, this book will appeal to researchers and teachers looking to change the way we think about economics, policy, and society.
This book aims to reach an understanding of how the mind carries out three sorts of thinking -- deduction, induction, and creation -- to consider what goes right and what goes wrong, and to explore computational models of these sorts of thinking. Written for students of the mind -- psychologists, computer scientists, philosophers, linguists, and other cognitive scientists -- it also provides general readers with a self-contained account of human and machine thinking. The author presents his point of view, rather than a review, as simply as possible so that no technical background is required. Like the field of research itself, it calls for hard thinking about thinking.
