What explains the simultaneous critiques of economic theory and liberalism during the 1930s? Early neoclassical economists had a common understanding of the proper institutional context undergirding a liberal market order. From the marginal revolution emerged a growing emphasis on analyzing markets as equilibrium states rather than processes. Because the institutions that frame a liberal market order were taken as given, to the point of relative neglect, this resulted in the notion that markets operated in an institutional vacuum. The resulting association of liberalism with laissez-faire, therefore, prompted a restatement of the role institutions play in the operation of a liberal market order.
{"title":"Liberalism in Crisis and the Promise of a Reconstructed Liberalism","authors":"Peter J. Boettke, Rosolino A. Candela","doi":"10.2139/SSRN.3539237","DOIUrl":"https://doi.org/10.2139/SSRN.3539237","url":null,"abstract":"What explains the simultaneous critiques of economic theory and liberalism during the 1930s? Early neoclassical economists had a common understanding of the proper institutional context undergirding a liberal market order. From the marginal revolution emerged a growing emphasis on analyzing markets as equilibrium states rather than processes. Because the institutions that frame a liberal market order were taken as given, to the point of relative neglect, this resulted in the notion that markets operated in an institutional vacuum. The resulting association of liberalism with laissez-faire, therefore, prompted a restatement of the role institutions play in the operation of a liberal market order.","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"72 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126240500","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is no evidence that J. Tinbergen ever read the technical analysis provided by J. M. Keynes in Parts II and V of the A Treatise on Probability in the 1938-1940 time period or at any later time in his life. The same conclusion holds for econometricians in general. They simply do not understand what Keynes’s Inexact, Approximation Approach to Measurement in the A Treatise on Probability entails. Tinbergen and Keynes held diametrically opposed positions on measurement. Tinbergen’s approach to measurement was guided by the Limiting Frequency interpretation of probability while Keynes’s approach followed the logical approach of George Boole. Tinbergen’s physics background led him to deploy an exact approach to measurement based on the specification of probability distributions, like the normal and lognormal, with exact and precisely defined measurements. All probabilities were assumed to be well defined, precise, exact, determinate, definite, additive, linear, independent single number of answers. Keynes’s approach was an inexact one to measurement based on his modification of Boole’s original approach in 1854 in The Laws of Thought in chapters 16-21. Probabilities for Keynes were, with a few exceptions, partially defined, imprecise, inexact, indefinite, indeterminate, nonadditive, nonlinear, and dependent. Probability estimates for Keynes required two numbers to specify the probability within a lower and upper bound(limit), and nor one like Tinbergen’s approach. Keynes called this approach Approximation. Keynesian probabilities are interval-valued. There are no more than a single handful of academics, worldwide today, who grasp the fact that Keynes’s approach to measurement in the A Treatise on Probability was an interval-valued approach that was covered by Keynes in chapters III and XV. There was no economist alive in the late 1930’s-1940’s who understood Keynes’s approach in the A Treatise on Probability. An example of this ignorance is Lawrence Klein’s review in 1951 of Harrod’s biography of Keynes. The assessments of the Keynes –Tinbergen exchanges in 1938-40 were practically identical to the assessment made of the A Treatise on Probability by Ronald Fisher in his 1923 Eugenics Review of the A Treatise on Probability, where Fisher completely overlooked the inexact approach to measurement that Keynes presented in Parts I –V of the A Treatise on Probability. He dismissed the A Treatise on Probability based on his belief that Keynes was arguing that probability could not be applied since it was, at best, ordinal in nature. Only one economist in the 20th century understood exactly what it was that Keynes had done in the A Treatise on Probability. That economist was named F. Y. Edgeworth. However, Edgeworth died in 1926. His two 1922 book reviews of the A Treatise on Probability required a great deal of mathematical and statistical competence on the part of a reader. That mathematical competence was missing from the economics professi
没有证据表明丁伯根曾在1938-1940年期间或在他生命的任何后期阅读过凯恩斯在《概率论》(A Treatise on Probability)第二部分和第五部分中提供的技术分析。同样的结论也适用于一般的计量经济学家。他们根本不理解凯恩斯在《概率论》中提出的不精确、近似的测量方法意味着什么。丁伯根和凯恩斯在测量上持截然相反的立场。丁伯根的测量方法以概率的极限频率解释为指导，而凯恩斯的方法遵循乔治·布尔的逻辑方法。Tinbergen的物理学背景使他采用了一种精确的测量方法，该方法基于概率分布的规范，如正态和对数正态，具有精确和精确定义的测量。所有的概率都被假定为定义良好的、精确的、精确的、确定的、确定的、可加的、线性的、独立的单一个数的答案。1854年，凯恩斯在《思想法则》第16-21章对布尔的原始方法进行了修改，他的方法是一种不精确的测量方法。除了少数例外，凯恩斯的概率是部分定义的、不精确的、不精确的、不确定的、不确定的、非加性的、非线性的和依赖的。凯恩斯的概率估计需要两个数字来指定在下限和上限(极限)内的概率，而不是像Tinbergen的方法那样一个数字。凯恩斯称这种方法为近似。凯恩斯概率是区间值的。今天，全世界只有少数学者认识到，凯恩斯在《概率论》中的测量方法是凯恩斯在第三章和第十五章中所涵盖的区间值方法。在20世纪30年代末到40年代，没有一个经济学家能理解凯恩斯在《概率论》(A Treatise on Probability)中的方法。这种无知的一个例子是劳伦斯·克莱因1951年对哈罗德的凯恩斯传记的评论。1938-40年凯恩斯-丁伯根交换的评估实际上与罗纳德·费雪在1923年对《概率论》的优生学评论中对《概率论》所做的评估相同，费雪完全忽略了凯恩斯在《概率论》第1 - 5部分中提出的不精确的测量方法。他驳回了《概率论》，因为他相信凯恩斯认为概率不能应用，因为它充其量是序数性质的。在20世纪，只有一位经济学家能够准确理解凯恩斯在《概率论》(A Treatise on Probability)中所做的事情。这位经济学家名叫f·y·埃奇沃斯。然而，埃奇沃斯于1926年去世。1922年，他对《概率论》(A Treatise on Probability)的两篇书评要求读者具备很强的数学和统计能力。这种数学能力在20世纪30年代末和40年代的经济学专业中是缺失的。其结果是，埃奇沃斯的两篇极好的评论被遗忘了，经济学家从未读过。从凯恩斯的角度来看，问题在于丁伯根试图应用于经济数据技术，而这些技术只适用于物理学，在物理学中，具有详细实验设计的实验室控制环境可以生成数据并在全球范围内复制实验。凯恩斯一直认为，经济学不像物理学、工程学、生物学或化学那样是一门物理或生命科学，也永远不可能像物理学那样。从1938年开始的私人书信往来，到1939年至1940年在《经济杂志》(Economic Journal)上的最后书信往来，丁伯根和凯恩斯之间存在着巨大的鸿沟。丁伯根对凯恩斯的不精确测量方法完全无知，这意味着某种智力妥协的可能性从一开始就是不可能的。凯恩斯和丁伯根1938- 1940年在《经济杂志》上的交流中表达了完全不同的观点，主要原因是他们的技术背景完全不同。凯恩斯的背景是逻辑学、数学和哲学。丁伯根的背景是物理学。这两位学者之间根本没有共同点。
{"title":"The Role of Ignorance About Keynes’s Inexact, Approximation Approach to Measurement in the A Treatise on Probability in the Keynes-Tinbergen Exchanges of 1938–1940","authors":"M. E. Brady","doi":"10.2139/ssrn.3353637","DOIUrl":"https://doi.org/10.2139/ssrn.3353637","url":null,"abstract":"There is no evidence that J. Tinbergen ever read the technical analysis provided by J. M. Keynes in Parts II and V of the A Treatise on Probability in the 1938-1940 time period or at any later time in his life. The same conclusion holds for econometricians in general. They simply do not understand what Keynes’s Inexact, Approximation Approach to Measurement in the A Treatise on Probability entails. \u0000 \u0000Tinbergen and Keynes held diametrically opposed positions on measurement. Tinbergen’s approach to measurement was guided by the Limiting Frequency interpretation of probability while Keynes’s approach followed the logical approach of George Boole. Tinbergen’s physics background led him to deploy an exact approach to measurement based on the specification of probability distributions, like the normal and lognormal, with exact and precisely defined measurements. All probabilities were assumed to be well defined, precise, exact, determinate, definite, additive, linear, independent single number of answers. Keynes’s approach was an inexact one to measurement based on his modification of Boole’s original approach in 1854 in The Laws of Thought in chapters 16-21. Probabilities for Keynes were, with a few exceptions, partially defined, imprecise, inexact, indefinite, indeterminate, nonadditive, nonlinear, and dependent. Probability estimates for Keynes required two numbers to specify the probability within a lower and upper bound(limit), and nor one like Tinbergen’s approach. Keynes called this approach Approximation. Keynesian probabilities are interval-valued. There are no more than a single handful of academics, worldwide today, who grasp the fact that Keynes’s approach to measurement in the A Treatise on Probability was an interval-valued approach that was covered by Keynes in chapters III and XV. \u0000 \u0000There was no economist alive in the late 1930’s-1940’s who understood Keynes’s approach in the A Treatise on Probability. An example of this ignorance is Lawrence Klein’s review in 1951 of Harrod’s biography of Keynes. \u0000 \u0000The assessments of the Keynes –Tinbergen exchanges in 1938-40 were practically identical to the assessment made of the A Treatise on Probability by Ronald Fisher in his 1923 Eugenics Review of the A Treatise on Probability, where Fisher completely overlooked the inexact approach to measurement that Keynes presented in Parts I –V of the A Treatise on Probability. He dismissed the A Treatise on Probability based on his belief that Keynes was arguing that probability could not be applied since it was, at best, ordinal in nature. \u0000 \u0000Only one economist in the 20th century understood exactly what it was that Keynes had done in the A Treatise on Probability. That economist was named F. Y. Edgeworth. However, Edgeworth died in 1926. His two 1922 book reviews of the A Treatise on Probability required a great deal of mathematical and statistical competence on the part of a reader. That mathematical competence was missing from the economics professi","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-03-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130715186","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We reply to Scott Scheall’s What is so Extreme About Mises’s Extreme Apriorism. We restate the setting of the topic of our paper and we argue that Scheall is not providing a clear distinction between (a) Mises the person and his epistemological position and (b) praxeology and economics. We also clarify misrepresentations of our own positions in Scheall’s treatment of our paper.
{"title":"What Is So Extreme about Mises's Extreme Apriorism?: Reply to Scott Scheall","authors":"G. Zanotti, N. Cachanosky","doi":"10.2139/ssrn.2875122","DOIUrl":"https://doi.org/10.2139/ssrn.2875122","url":null,"abstract":"We reply to Scott Scheall’s What is so Extreme About Mises’s Extreme Apriorism. We restate the setting of the topic of our paper and we argue that Scheall is not providing a clear distinction between (a) Mises the person and his epistemological position and (b) praxeology and economics. We also clarify misrepresentations of our own positions in Scheall’s treatment of our paper.","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"245 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131649095","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Even though neoclassical orthodox economists do reject Keynesian macro economics due to its lack of micro foundation, it is common knowledge within heterodox economic schools that the micro foundation of orthodox neoclassical economics is not sound either. However the fatal mistake of heterodox economics is to crown state as leading engine of economic development, after identifying failures of perfect market. Since imperfection of market does not grantee preference toward state intervention and since to reject an orthodox market theory is not the same as rejecting the virtue of market itself, evolutionary justification for virtue of market is given in this paper by heavily depending on existing literature of economics, other social sciences and natural sciences. Unless we are able to start from enlightened point of view to eliminate this never ending reincarnation of ignorance, our pendulum of economic policy will never stop swinging from market or state, one after another, as almighty institution which will solve every problem of development in vain.
{"title":"Eclipsed Sun of Bastiat: Adjusted Look at Market Allocation in Imperfect World","authors":"Taddese Mezgebo","doi":"10.2139/ssrn.3063161","DOIUrl":"https://doi.org/10.2139/ssrn.3063161","url":null,"abstract":"Even though neoclassical orthodox economists do reject Keynesian macro economics due to its lack of micro foundation, it is common knowledge within heterodox economic schools that the micro foundation of orthodox neoclassical economics is not sound either. However the fatal mistake of heterodox economics is to crown state as leading engine of economic development, after identifying failures of perfect market. Since imperfection of market does not grantee preference toward state intervention and since to reject an orthodox market theory is not the same as rejecting the virtue of market itself, evolutionary justification for virtue of market is given in this paper by heavily depending on existing literature of economics, other social sciences and natural sciences. Unless we are able to start from enlightened point of view to eliminate this never ending reincarnation of ignorance, our pendulum of economic policy will never stop swinging from market or state, one after another, as almighty institution which will solve every problem of development in vain.","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"141 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116432620","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This review assesses the evolution of economic geography over the past two decades, picking up where Scott’s (2000) intellectual history of the field’s “great-half century” ends. It is part retrospective and prospective; as such, it aims beyond a historical review to outline some ideas about important factors that drove the recent developments of economic geography. Specifically, I identify three main themes: i) the “Methodenstreit” over the New Economic Geography and the alleged intellectual imperialism of geographical economics; ii) the search for engaged pluralism amid concerns of a dominance of Anglo-American economic geography; and—perhaps most strikingly—iii) the rapid (re)emergence of subfields after the Great Financial Crisis, such as the geography of money and finance and political economic geography, both with a particular focus on spatial disparities and inequality. Focusing on new developments in the geography of money and finance, I also illustrate how the three themes (economic imperialism, pluralism, and financialisation) have shaped the discipline’s most recent intellectual history. The review concludes by outlining elements of a vision for a pluralist post-crisis economic geography.
{"title":"After the ‘Great Half-Century’: Post-Crisis Economic Geography in Retrospect and Prospect","authors":"David S. Bieri","doi":"10.2139/ssrn.3345700","DOIUrl":"https://doi.org/10.2139/ssrn.3345700","url":null,"abstract":"This review assesses the evolution of economic geography over the past two decades, picking up where Scott’s (2000) intellectual history of the field’s “great-half century” ends. It is part retrospective and prospective; as such, it aims beyond a historical review to outline some ideas about important factors that drove the recent developments of economic geography. Specifically, I identify three main themes: i) the “Methodenstreit” over the New Economic Geography and the alleged intellectual imperialism of geographical economics; ii) the search for engaged pluralism amid concerns of a dominance of Anglo-American economic geography; and—perhaps most strikingly—iii) the rapid (re)emergence of subfields after the Great Financial Crisis, such as the geography of money and finance and political economic geography, both with a particular focus on spatial disparities and inequality. Focusing on new developments in the geography of money and finance, I also illustrate how the three themes (economic imperialism, pluralism, and financialisation) have shaped the discipline’s most recent intellectual history. The review concludes by outlining elements of a vision for a pluralist post-crisis economic geography.","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"62 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131219398","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-02-15DOI: 10.1108/IJOEM-02-2018-0088
Muhammad Hanif
The purpose of this paper is to present an analysis of current practices of Islamic mortgages in the light of the principles of Islamic financial system, to document divergences – if any. A subsidiary goal is to develop an Islamic Mortgage Model (IMM) based on Musharakah principles.,The author documents theoretical underpinnings of risk-return sharing from the Shari’ah perspective. A comparative study of conventional and Islamic mortgages is completed; existing practice of Islamic mortgages analyzed in the light of Musharakah principles and divergences identified. IMM is developed after taking divergences and Musharakah principles into considerations. A housing case is used to highlight differences (in financial terms) under multiple methods and scenarios.,Study documents multiple divergences from Musharakah principles in the existing practice of Islamic mortgages including ignorance of market pricing in the negotiation of rentals and trading of equity units, and transfer of all ownership risks and rewards (vacancy, damage, destruction and market) to one partner (i.e. customer). Practice is divergent from principles in the area of economic substance. Modified IMM is developed by taking into account Musharakah principles; and differences highlighted by calculating financial figures – to determine financial rights and liabilities of the parties.,Divergence from the principles of risk-return sharing leads to failure in the achievement of Islamic finance objective of equitable distribution of wealth. Moreover, protection of capital for financier reduces the market abilities to achieve financial stability by matching credit expansion with the rise in the real economy. Shari’ah boards and regulators, as well as, management of Islamic banking industry are expected to incorporate proposed changes in-practice for the realization of Islamic finance objectives.,This study contributes to Islamic finance literature in the area of risk-return sharing. Based on important objectives of Islamic finance – equitable distribution of wealth and financial stability – divergences identified and a modified IMM in the light of Musharakah principles is presented. Descriptive rules are transformed into financial figures to document financial rights and liabilities of the concerned parties.
{"title":"Islamic Mortgages: Principles and Practice","authors":"Muhammad Hanif","doi":"10.1108/IJOEM-02-2018-0088","DOIUrl":"https://doi.org/10.1108/IJOEM-02-2018-0088","url":null,"abstract":"The purpose of this paper is to present an analysis of current practices of Islamic mortgages in the light of the principles of Islamic financial system, to document divergences – if any. A subsidiary goal is to develop an Islamic Mortgage Model (IMM) based on Musharakah principles.,The author documents theoretical underpinnings of risk-return sharing from the Shari’ah perspective. A comparative study of conventional and Islamic mortgages is completed; existing practice of Islamic mortgages analyzed in the light of Musharakah principles and divergences identified. IMM is developed after taking divergences and Musharakah principles into considerations. A housing case is used to highlight differences (in financial terms) under multiple methods and scenarios.,Study documents multiple divergences from Musharakah principles in the existing practice of Islamic mortgages including ignorance of market pricing in the negotiation of rentals and trading of equity units, and transfer of all ownership risks and rewards (vacancy, damage, destruction and market) to one partner (i.e. customer). Practice is divergent from principles in the area of economic substance. Modified IMM is developed by taking into account Musharakah principles; and differences highlighted by calculating financial figures – to determine financial rights and liabilities of the parties.,Divergence from the principles of risk-return sharing leads to failure in the achievement of Islamic finance objective of equitable distribution of wealth. Moreover, protection of capital for financier reduces the market abilities to achieve financial stability by matching credit expansion with the rise in the real economy. Shari’ah boards and regulators, as well as, management of Islamic banking industry are expected to incorporate proposed changes in-practice for the realization of Islamic finance objectives.,This study contributes to Islamic finance literature in the area of risk-return sharing. Based on important objectives of Islamic finance – equitable distribution of wealth and financial stability – divergences identified and a modified IMM in the light of Musharakah principles is presented. Descriptive rules are transformed into financial figures to document financial rights and liabilities of the concerned parties.","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115690009","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Arguments are made that, for a typical economy with many goods, tatonnement dynamics can be expected to lead to a unique, globally stable equilibrium.
有观点认为，对于一个拥有许多商品的典型经济体，可以预期收支动态会导致一种独特的、全球稳定的平衡。
{"title":"Conjecture on the Efficacy of the Invisible Hand","authors":"Donald C. Keenan, Taewon Kim","doi":"10.2139/ssrn.3327073","DOIUrl":"https://doi.org/10.2139/ssrn.3327073","url":null,"abstract":"Arguments are made that, for a typical economy with many goods, tatonnement dynamics can be expected to lead to a unique, globally stable equilibrium.","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"338 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123127247","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Keynes used his IS-LM(LP) model to reply to Viner’s claims that he had drastically overestimated the role that liquidity preference played in the macro economy in explaining the events of 1929-1933 in the world economy. Viner claimed that liquidity preference could only play a very minor role in impacting the economy as a whole. This amounts to the claim that financial manipulation and stock market speculation can play a role that is, at best, of very minor significance.
Viner’s assessment is identical to his claim made in his Journal of Political Economy paper in 1927 that Adam Smith’s criticisms of projectors, imprudent risk takers and prodigals, as illustrated by the very negative impact of the British East India Company on Scotland’s economy in the 18th century, could, at best, play only a very minor role. Viner’s answer was identical to that of Jeremy Bentham, who claimed that Smith’s projectors, imprudent risk takers and prodigals were really just inventors and innovating entrepreneurs. The government authorities should never interfere in the markets for any reason, should “be quite”, and “stay out of the sunshine” of the private sector economy. Of course, this Benthamite Utilitarian creed, taught at the University of Chicago’s Economics department in the 1920’s, is why American government authorities did nothing in the years between 1929-1933 to stop the Great Depression. They had been taught Laissez Faire from University of Chicago economists. Everything was supposed to improve by itself on its own. The economy was guaranteed to recover only if government did nothing.
Viner’s argument, then, is that it is impossible to have a liquidity trap (Keynes’s absolute liquidity preference).Keynes challenged Viner’s argument using IS-LM(LP)analysis in his reply in February, 1937.
Keynes emphasized in his reply to Viner in February,1937, that he was very concerned about the highly elastic range of the LM(LP) curve. Keynes combined this with an emphasis on the highly inelastic range of the IS curve, as Keynes’s IS curve is the opposite of Viner’s ,since, given Viner’s highly inelastic LM(LP) curve, he needs an IS curve that is highly elastic in order to get “…a small decline in money-income would lead, as stated above, to a large fall in the rate of interest.”
Keynes thus is very concerned with the parameters of the IS-LM(LP) curves, although he clearly views the major problem with the IS curve as being its instability and shift ability, due to the impacts of confidence on mec calculations involving expectations.
Keynes not only provided the first IS-LM model, but also explicitly considered the elasticity of the curves as well both in the GT in 1936 and in the GTE in 1937.
Paul Krugman’s twenty five years of emphasis on the necessity of basing macroeconomics on IS-LM(LP) is correct. A minor point is that it is primarily Keynes, and not Hicks, who was responsible for the explicit development and ap
凯恩斯用他的IS-LM(LP)模型来回应Viner的说法，Viner认为他在解释1929-1933年世界经济事件时严重高估了流动性偏好在宏观经济中所起的作用。Viner声称，流动性偏好在影响整个经济方面只能发挥非常小的作用。这相当于声称，金融操纵和股票市场投机至多只能起到很小的作用。维纳的评估与他1927年在《政治经济学杂志》(Journal of Political economics)上发表的论文一致，即亚当•斯密(Adam Smith)对放债者、鲁莽的冒险者和浪子的批评至多只能起到很小的作用，18世纪英国东印度公司(British East India Company)对苏格兰经济的负面影响就说明了这一点。维纳的回答与杰里米·边沁(Jeremy Bentham)的相同，边沁声称，史密斯的投影仪、鲁莽的冒险者和浪子实际上只是发明家和创新企业家。政府部门不应该以任何理由干预市场，应该“安静”，“远离阳光”的私营经济。当然，20世纪20年代在芝加哥大学经济系教授的边沁功利主义信条，正是美国政府当局在1929年至1933年期间没有采取任何措施阻止大萧条的原因。他们接受的是芝加哥大学经济学家的自由放任主义教育。一切都应该自行改善。只有政府不采取任何措施，经济才有可能复苏。因此，维纳的论点是，不可能存在流动性陷阱(凯恩斯的绝对流动性偏好)。凯恩斯在1937年2月的回复中，用IS-LM(LP)分析挑战了维纳的观点。1937年2月，凯恩斯在给维纳的回信中强调，他非常担心LM(LP)曲线的高度弹性范围。凯恩斯将这一点与强调IS曲线的高度非弹性范围相结合，因为凯恩斯的IS曲线与Viner的曲线相反，因为给定Viner的高度非弹性LM(LP)曲线，他需要一条高度弹性的IS曲线，以便得到“……货币收入的小幅下降会导致，如上所述，利率的大幅下降。”因此，凯恩斯非常关注is - lm (LP)曲线的参数，尽管他清楚地看到is曲线的主要问题是它的不稳定性和转移能力，这是由于信心对涉及预期的mec计算的影响。凯恩斯不仅提出了第一个IS-LM模型，而且在1936年的GT和1937年的GTE中都明确地考虑了曲线的弹性。保罗·克鲁格曼25年来一直强调将宏观经济学建立在is - lm (LP)基础上的必要性，这是正确的。一个小问题是，主要是凯恩斯，而不是希克斯，负责is - lm (LP)模型的明确发展和应用。当然，凯恩斯也会指出，将IS-LM(LP)建立在涉及某种D-Z模型的基础上的必要性。
{"title":"On J. M. Keynes’s Application of His IS-LM (LP) Model in His Reply to Viner in His Article the General Theory of Employment in February, 1937: Keynes Emphasized the Horizontal, Completely Elastic Range of the LM (LP) Curve","authors":"M. E. Brady","doi":"10.2139/ssrn.3317346","DOIUrl":"https://doi.org/10.2139/ssrn.3317346","url":null,"abstract":"Keynes used his IS-LM(LP) model to reply to Viner’s claims that he had drastically overestimated the role that liquidity preference played in the macro economy in explaining the events of 1929-1933 in the world economy. Viner claimed that liquidity preference could only play a very minor role in impacting the economy as a whole. This amounts to the claim that financial manipulation and stock market speculation can play a role that is, at best, of very minor significance. <br> <br>Viner’s assessment is identical to his claim made in his Journal of Political Economy paper in 1927 that Adam Smith’s criticisms of projectors, imprudent risk takers and prodigals, as illustrated by the very negative impact of the British East India Company on Scotland’s economy in the 18th century, could, at best, play only a very minor role. Viner’s answer was identical to that of Jeremy Bentham, who claimed that Smith’s projectors, imprudent risk takers and prodigals were really just inventors and innovating entrepreneurs. The government authorities should never interfere in the markets for any reason, should “be quite”, and “stay out of the sunshine” of the private sector economy. Of course, this Benthamite Utilitarian creed, taught at the University of Chicago’s Economics department in the 1920’s, is why American government authorities did nothing in the years between 1929-1933 to stop the Great Depression. They had been taught Laissez Faire from University of Chicago economists. Everything was supposed to improve by itself on its own. The economy was guaranteed to recover only if government did nothing. <br> <br>Viner’s argument, then, is that it is impossible to have a liquidity trap (Keynes’s absolute liquidity preference).Keynes challenged Viner’s argument using IS-LM(LP)analysis in his reply in February, 1937. <br> <br>Keynes emphasized in his reply to Viner in February,1937, that he was very concerned about the highly elastic range of the LM(LP) curve. Keynes combined this with an emphasis on the highly inelastic range of the IS curve, as Keynes’s IS curve is the opposite of Viner’s ,since, given Viner’s highly inelastic LM(LP) curve, he needs an IS curve that is highly elastic in order to get “…a small decline in money-income would lead, as stated above, to a large fall in the rate of interest.” <br> <br>Keynes thus is very concerned with the parameters of the IS-LM(LP) curves, although he clearly views the major problem with the IS curve as being its instability and shift ability, due to the impacts of confidence on mec calculations involving expectations. <br> <br>Keynes not only provided the first IS-LM model, but also explicitly considered the elasticity of the curves as well both in the GT in 1936 and in the GTE in 1937. <br> <br>Paul Krugman’s twenty five years of emphasis on the necessity of basing macroeconomics on IS-LM(LP) is correct. A minor point is that it is primarily Keynes, and not Hicks, who was responsible for the explicit development and ap","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114143019","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Models of ethical voting, in which individuals derive intrinsic utility from “doing their part�? by voting in elections, have been proposed as an explanation for the “voting paradox�? (why people vote if the probability of being pivotal is negligible). I show that the set of equilibria of the ethical voting model of Feddersen and Sandroni (2006) is identical to that of a model of social pressure in which only a negligible fraction of individuals are ethical. This has the crucial methodological implication that if people actually vote out of social pressure (as the empirical evidence suggests), then the ethical voting model cannot be falsified: even if the model is false, it will be consistent with any empirical evidence.
{"title":"Social Pressure Explains Ethical Voting: A Methodological Contribution to the Scientific Endeavor in the Social Sciences","authors":"David Jimenez-Gomez","doi":"10.2139/ssrn.3291484","DOIUrl":"https://doi.org/10.2139/ssrn.3291484","url":null,"abstract":"Models of ethical voting, in which individuals derive intrinsic utility from “doing their part�? by voting in elections, have been proposed as an explanation for the “voting paradox�? (why people vote if the probability of being pivotal is negligible). I show that the set of equilibria of the ethical voting model of Feddersen and Sandroni (2006) is identical to that of a model of social pressure in which only a negligible fraction of individuals are ethical. This has the crucial methodological implication that if people actually vote out of social pressure (as the empirical evidence suggests), then the ethical voting model cannot be falsified: even if the model is false, it will be consistent with any empirical evidence.","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131453844","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
J. M. Keynes made the concept of uncertainty a fundamental part of his rate of the interest theory of liquidity preference. Uncertainty was defined by Keynes on page 148 of the General Theory as an inverse function of the weight of the argument (evidence), where “argument” refers to logical considerations based on propositional logic and evidence refers to an analysis of a mathematical function and the variables that define the function. Thus, Uncertainty, U, is defined as a function of w, so that U =h(w). The weight of the argument was discussed in chapter 6 of the A Treatise on Probability, 1921. The weight of the evidence was discussed in chapter 26 using the term w to measure the completeness of the relevant evidence. Formally, the evidential weight of the evidence, V(a/h), =w, where w is defined on the interval 0 ≤ w ≤ 1. It is only in chapter 26 that Keynes formally defines V(a/h) =w.
Keynes’s logical and mathematical constructions are, however, very difficult for economists to grasp, since an economist must first grasp that chapter 6 of the A Treatise on Probability, 1921 provides only a purely, formal, symbolic, logical treatment that only a single handful of economists has been able to grasp correctly since 1921. Keynes does not integrate the concept of weight into a decision theory combined with probability that deals with expectations. Keynes does integrate probability and weight into a decision theory, however, in chapter 26 of the A Treatise on Probability, 1921 Keynes called this specific, simplified version of his overall interval valued approach a “conventional” coefficient of risk and weight. Only F Y Edgeworth and Bertrand Russell recognized the fundamental of chapter 26 of the A Treatise on Probability, 1921. Keynes uses this chapter for the theoretical foundation for his discussions of investment expectations about the mec and D2 in chapters 3, 12, 20 and 21 of the General Theory (1936).
Greenspan’s concept of a Continuum allows an economist to bypass Keynes’s correct, but very difficult and involved logical and mathematical discussions of the concept of weight, and simply define a Continuum that exists that spans continuously situations involving a complete lack of knowledge (ignorance) to a situation where the decision maker has complete knowledge and can assign precise, exact numerical probabilities. The decision maker must then decide for himself whether he is facing a situation of uncertainty, a situation of risk, or some mixture of the two. One could assume that in this intermediate situation that risk and uncertainty could be regarded as some linear combination of the two different types of situations. It was Greenspan’s unique ability to be able to apply his intuition and correctly judge what type of uncertainty he was facing at particular time. If one is facing uncertainty, then a proactive approach is required. Greenspan’s understanding of uncertainty was why Greenspan was proactive while Bernanke, who
凯恩斯把不确定性的概念作为他的流动性偏好利率理论的一个基本部分。凯恩斯在《通论》第148页将不确定性定义为论证(证据)权重的反函数，其中“论证”指的是基于命题逻辑的逻辑考虑，而证据指的是对数学函数和定义该函数的变量的分析。因此，将不确定性U定义为w的函数，使U =h(w)。1921年出版的《概率论》(A Treatise on Probability)第6章讨论了这一论点的重要性。证据的权重在第26章中讨论，使用术语w来衡量相关证据的完整性。形式上，该证据的证据权V(a/h) =w，其中w在区间0≤w≤1上定义。直到第26章，凯恩斯才正式定义了V(a/h) =w。然而，凯恩斯的逻辑和数学结构对经济学家来说很难掌握，因为经济学家必须首先掌握《概率论》第6章，1921年只提供了一个纯粹的，形式的，象征性的，逻辑的处理，自1921年以来只有少数经济学家能够正确掌握。凯恩斯并没有把权重的概念整合到一个与概率相结合的决策理论中，而概率是用来处理预期的。凯恩斯确实将概率和权重整合到决策理论中，然而，在《概率论》(a Treatise on probability, 1921)的第26章中，凯恩斯将他的整体区间值方法的这种具体的、简化的版本称为风险和权重的“传统”系数。只有F·Y·埃奇沃斯和伯特兰·罗素认识到1921年《概率论》第26章的基础。凯恩斯将这一章作为他在通论(1936)第3、12、20和21章中讨论关于mec和D2的投资预期的理论基础。格林斯潘的连续统概念允许经济学家绕过凯恩斯正确的，但非常困难的，涉及到权重概念的逻辑和数学讨论，并简单地定义了一个连续存在的连续统，它跨越了从完全缺乏知识(无知)到决策者拥有完全知识并可以分配精确的数字概率的情况。然后，决策者必须自己决定，他面临的是不确定的情况，还是有风险的情况，还是两者的混合。人们可以假设，在这种中间情况下，风险和不确定性可以被视为两种不同情况的某种线性组合。格林斯潘有一种独特的能力，能够运用他的直觉，正确地判断他在特定时间所面临的不确定性。如果一个人面临不确定性，那么就需要采取积极主动的方法。格林斯潘对不确定性的理解是格林斯潘积极主动的原因，而伯南克认为不存在不确定性，只有风险评估，面对2007年8月英国北岩银行(Northern Rock)倒闭引发的不确定性上升，他是被动反应的。
{"title":"Using A. Greenspan’s Continuum to Generalize J.M. Keynes’s Evidential Weight of the Argument (Evidence), W, Where W Was Defined on the Interval 0 ≤ W ≤ 1, so that 0 Denotes Complete Ignorance and 1 Denotes Complete Knowledge","authors":"M. E. Brady","doi":"10.2139/ssrn.3310046","DOIUrl":"https://doi.org/10.2139/ssrn.3310046","url":null,"abstract":"J. M. Keynes made the concept of uncertainty a fundamental part of his rate of the interest theory of liquidity preference. Uncertainty was defined by Keynes on page 148 of the General Theory as an inverse function of the weight of the argument (evidence), where “argument” refers to logical considerations based on propositional logic and evidence refers to an analysis of a mathematical function and the variables that define the function. Thus, Uncertainty, U, is defined as a function of w, so that U =h(w). The weight of the argument was discussed in chapter 6 of the A Treatise on Probability, 1921. The weight of the evidence was discussed in chapter 26 using the term w to measure the completeness of the relevant evidence. Formally, the evidential weight of the evidence, V(a/h), =w, where w is defined on the interval 0 ≤ w ≤ 1. It is only in chapter 26 that Keynes formally defines V(a/h) =w.<br><br>Keynes’s logical and mathematical constructions are, however, very difficult for economists to grasp, since an economist must first grasp that chapter 6 of the A Treatise on Probability, 1921 provides only a purely, formal, symbolic, logical treatment that only a single handful of economists has been able to grasp correctly since 1921. Keynes does not integrate the concept of weight into a decision theory combined with probability that deals with expectations. Keynes does integrate probability and weight into a decision theory, however, in chapter 26 of the A Treatise on Probability, 1921 Keynes called this specific, simplified version of his overall interval valued approach a “conventional” coefficient of risk and weight. Only F Y Edgeworth and Bertrand Russell recognized the fundamental of chapter 26 of the A Treatise on Probability, 1921. Keynes uses this chapter for the theoretical foundation for his discussions of investment expectations about the mec and D2 in chapters 3, 12, 20 and 21 of the General Theory (1936).<br><br>Greenspan’s concept of a Continuum allows an economist to bypass Keynes’s correct, but very difficult and involved logical and mathematical discussions of the concept of weight, and simply define a Continuum that exists that spans continuously situations involving a complete lack of knowledge (ignorance) to a situation where the decision maker has complete knowledge and can assign precise, exact numerical probabilities. The decision maker must then decide for himself whether he is facing a situation of uncertainty, a situation of risk, or some mixture of the two. One could assume that in this intermediate situation that risk and uncertainty could be regarded as some linear combination of the two different types of situations. It was Greenspan’s unique ability to be able to apply his intuition and correctly judge what type of uncertainty he was facing at particular time. If one is facing uncertainty, then a proactive approach is required. Greenspan’s understanding of uncertainty was why Greenspan was proactive while Bernanke, who ","PeriodicalId":226815,"journal":{"name":"Philosophy & Methodology of Economics eJournal","volume":"334 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122835060","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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