The New Institutional Economics (NIE) occupies an important space in the rapidly expanding theory of organization. Traditional testing techniques have only been applied to less complex parts of the NIE. A rich body of evidence generated by the experiences of firms and other organizations lies fallow. The limited domain of traditional testing will persist because of the nature of the central concepts of the NIE, the difficulty posed for integrating transaction cost into an optimizing framework by self-reference, and the particularly (...) wicked manifestations of the Duhem-Quine problem. Experimental economics may add credibility to some components of the NIE but is unlikely to fill the current void. The catchy title, the telling anecdote, and the creative 'fact' have played a disproportionate role in determining the composition of the canonical literature in the NIE. Catalytic steps for developing professional norms governing the marshalling of data generated by different organizations and institutions are discussed in the concluding section. (shrink)

The use of sensitivity analysis is routine in some fields of empirical econometrics, although econometric theorists have generally taken a critical attitude towards it. This paper presents a framework in which arguments for and against such analysis can be evaluated. It appears that sensitivity is not necessarily a bad, nor sturdiness necessarily a good.

This article is a study of the response of two heterodox schools of economic thought to ?new? philosophical ideas. Specifically, it considers the response within Post Keynesian and feminist economics to Tony Lawson's recent call for economists to pay greater attention to ontology and for economists to adopt research methods consistent with critical realism. Lawson's arguments were formally introduced to these schools over the space of a few years and continue to generate considerable discussion within their ranks. The focus of (...) analysis in this article is on the debate about Lawson's ideas published in the leading journals associated with two schools of thought: The Journal of Post Keynesian Economics and Feminist Economics. The article contrasts the reception Lawson's ideas received in each of the two journals and suggests some reasons for these differences. It argues that some barriers to the adoption of new ideas exist in each school of thought and that this has implications for the direction and content of economic thought in heterodox schools. (shrink)

Mounting evidence suggests that the human impact on the planet is reaching the point where the Earth's ecosystems will not be able to support the level of human occupation. The global economy also seems to be generating income disparities that threaten the social stability of even the most developed economies. Although both these trends are rooted in the operation of the global market economy, standard economics has surprisingly little to offer in the way of policies that might allow us to (...) survive the twenty-first century with our current social and environmental systems intact. This article examines our current predicament from the point of view of neoclassical welfare economics and the alternative framework of ecological economics. We argue that ecological economics, by placing the study of economics squarely within human society and ecosystems, can lead the way to make economics both scientifically credible and policy relevant. (shrink)

Fifty years ago, the Argentinean economist Raúl Prebisch published a paper called Estúdio Económico de América Latina. The Estúdio was one of the first texts that set up what was later termed the ?Prebisch-Singer thesis? or, more widely, the Latin American School of Economics. According to this document, Latin American countries should undergo an industrialization program under the direct supervision of the national state. The rationale for this thesis was the deterioration of the terms of trade for countries exporting primary (...) commodities and importing manufactured goods. The focus here is on the argumentative structure of the document, which targets two different audiences, a lay and a specialized one. Relying on a center-periphery metaphor, Prebisch stresses the shortcomings of conventional economic theory when applied to distinct historical circumstances, i.e., to the peculiar conditions experienced by peripheral countries. A rhetorical approach to the Estúdio also shows that it represents a deliberate effort to assemble a large volume of empirical data about Latin America and its foreign trade. This was not a widespread procedure at the time. As is usually the case in well-built argumentative discourses, both inclusion and omission of certain sets of data look strategically contrived. (shrink)

While it is widely alleged that economists do not like or use questionnaire surveys, the facts are considerably more complicated. Economists make extensive use of survey information on such things as prices and employment, and the use of ?contingent valuation? surveys has exploded recently. The paper reviews the historical debate that led to economists? seeming distrust of surveys. It then investigates why there is extensive use of surveys in the face of methodological strictures against survey use. To do this, the (...) paper develops a typology of kinds of information that can be gathered by surveys and considers whether anti-survey arguments apply with equal force to the various categories. Differing methodological uses for survey data are then considered, using a number of actual survey literatures as illustrations. Finally, the paper presents strategies for improving the use of survey data in economics. (shrink)

Abstract This has been an unusually productive exchange. My critics largely accept my main theoretical claims about economic calculation and socialism. They have also started to do what advocates of the Misesian view should have been doing for decades: offer empirical evidence that that the calculation problem is serious. While I continue to believe that incentive problems explain most of the failures of socialism, I am slightly less confident than I was before. Fortunately, there are many unexploited sources of information (...) to help resolve the issue. (shrink)

Abstract In the 1920s, Austrian?school economists began to argue that in a fully socialized economy, free of competitively generated prices, central planners would have no way to calculate which methods of production would be the most economical. They claimed that this ?economic calculation problem? showed that socialism is ?impossible.? Although many believe that the Austrian position was later vindicated by the collapse of the Soviet bloc, the Austrian school's own methodology disallows such a conclusion. And historical evidence suggests that poor (...) incentives?not lack of economic calculation?were the main source of the economic defects of ?really existing socialism.? (shrink)

The purpose of the paper is to explore the potential for using fuzzy logic to analyse economic decision?making under Keynesian uncertainty, and in particular in circumstances where variety of opinion is important. Fuzzy logic is shown to apply where expectations may differ because the nature of the subject matter impedes any ?crisp? way of describing the underlying variables. The particular case of the speculative demand for money is considered, since it explicitly reflects variety of opinion as to whether interest rates (...) are ?high? or ?low? (shrink)

This intriguing new book examines and analyses the role of critical realism in economics and specifically how this line of thought can be applied to the real world. With contributions from such varying commentators as Sheila Dow, Wendy Olsen and Fred Lee, this new book is unique in its approach and will be of great interest to both economic methodologists and those involved in applied economic studies.

Hayek maintains that models of complexity must consider two closely interrelated factors: the large number of variables and the connections among them. These two conditions, which define complex phenomena, exhibit a different logical dimension. The former (the ?large number of variables?) describes complexity in quantitative (numerical) terms; the latter provides a view of complex phenomena in logical-relational terms, and it is evoked to explain the emergent properties of the whole. Despite the close relation between these concepts, the first notion essentially (...) prevails over the latter, delineating a distinctive configuration of the theory. This perspective also emerges when Hayek defines ?dispersed? and ?inarticulate? knowledge, and introduces the concept of the ?explanations of the principles?. Finally, the notion of level of analysis is discussed in order to interpret Hayek's two concepts which define complexity. (shrink)

Which schools of thought are favored by German economists? What makes a good economist and which economists have been most influential? These questions were addressed in a survey, conducted in the summer of 2006 among the members of the ?Verein für Socialpolitik?. An econometric analysis is used to identify to what extent ideological preferences or personal factors determine the respondents' answers. Our results suggest that German economists favor neoclassical economic theory as a school of thought and appreciate the contributions of (...) their Anglo-Saxon colleagues much more than their fellow compatriots' contributions. Furthermore, a ?good? economist should have expertise in a certain field, as well as a broader knowledge of general economics. Some of the results can be compared to Colander (2008). The results indicate that graduate programs noted for their American style greatly influence a student's opinion as to what attributes a good economist must have. (shrink)

This original book brings together some of the world's leading critics of economics orthodoxy to debate Lawson's contribution to the economics literature.

The recent advancements at the interface between economics and neuroscience have encouraged neuroeconomists to raise several criticisms concerning the economic theory of choice. At present, however, there is little agreement with regard to the theoretical presuppositions and the explanatory aims of neuroeconomics. In this paper, I assess the scope and the significance of neuroeconomists' divergences, casting doubt on their attempts to provide a unified theoretical framework for analysing human choice behaviour. Moreover, I highlight some respects in which methodologically informed considerations (...) can promote the consolidation of the neuroeconomic enterprise. (shrink)

This paper argues that Arthur Lewis originally presented the problem of economic development in terms of an open system, in the sense that it focused on a number of possible pitfalls and socio?economic constraints in the process of capital accumulation and industrialization in a labour?surplus economy. In the hands of the neoclassical economists, who were predominantly interested in achieving deterministic equilibrium results by introducing strict assumptions, the theoretical system later became closed ? something Lewis never intended. JEL Classifications: B41, O10, (...) O17, O29. (shrink)

Economists often try to make plausible inferences from a sizable empirical literature addressing a particular measurement, direction-of-effect, or testing issue. There are serious methodological problems associated with drawing such inferences. This article sets out some of these problems in order to make a case for their importance. After discussing these problems, the paper presents three case study examples of inference difficulties in specific literatures. It then proposes a new hypothesis about the time pattern of publication bias in empirical economics literatures. (...) As support for this hypothesis, it presents evidence that ?reversals in findings? in empirical literatures in economics are not uncommon. Similarities are pointed out between the focus on inference problems in this paper, and the meta-analysis literatures in psychology and medical clinical trials. (shrink)

Does empirical work in economics both provoke and test theoretical models, or does model development proceed according to a theory-oriented research program, with little interaction with empirics? Robert Solow and Richard Lipsey have articulated different visions of this relationship. This paper: (i) describes these competing Solow versus Lipsey views; (ii) presents examples illustrating each view; and (iii) draws inferences about factors promoting a close relation between empirics and modeling. Three examples are examined in detail: the ?nursing shortage? literature; Lind's analysis (...) of recent rent control models; and a wide-ranging evaluation of ?is there too little theory in development economics?? by leading development economists. Various factors promoting or inhibiting a close connection between modeling and empirics are identified. (shrink)

Analytical philosophy has been challenged by experimental approaches that make use of, among other things, cognitive science methods. In this paper we illustrate the benefits of merging philosophy with neuroscience, using an example of research in the foundations of social science. We argue that designing novel experiments to answer specific philosophical questions has several advantages compared to relying passively on neuroscientists' data. In this particular case, the data redirect attention towards topics ? such as inductive reasoning ? that are relatively (...) overlooked by mainstream social neuroscience. (shrink)

The neglect and misinterpretation of Marshall's treatment of time led many of his followers and critics to overlook the significance of the qualifications and criticisms of equilibrium analysis in his Principles. This misinterpretation arises from a failure to fully understand the purpose and method of Marshall's analysis. Marshall's methodological struggles in Principles did not arise from an attempt to preserve the concept of competitive equilibrium in a world where increasing returns are pervasive. Rather, they emanated from an attempt at providing (...) analytical tools capable of contributing to an understanding of the process of economic development that is continuous in time. Marshall was unable to resolve the conflict arising from ?biological? and ?mechanical? representations of such processes. The later critics of Marshall developed their analysis in terms of comparative static analysis of competitive equilibrium positions. The element of time had no role to play in such a setting. (shrink)