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Economic Methodology, History and Pluralism: Expanding Economic Thought to Meet Contemporary Challenges pays tribute to Emeritus Professor Sheila Dow (University of Stirling, Scotland). This volume focusses on the contributions of Dow to economic methodology, pluralism and the history of economic thought. These explorations serve to underpin her ideas and theories on macroeconomics, banking and money.Bringing together an impressive panel of contributors, the chapters in this work examine Dow's writings on structured pluralism and schools of thought, meanings of open and closed systems, reflections on the relationship between economics and other sciences (both social and natural), the methodology of behavioural economics, as well as the political economy of the Scottish school of thought. The book challenges the foundations of the mainstream economics paradigm in a novel and holistic manner, seeking to advance thinking across Dow's favoured discipline. The essays in this collection provide thought-provoking reading for advanced students and scholars of economic methodology, the history of economic thought, heterodox economics and political economy. The book will also be valued by the economics profession at large, as it contains important elements and ideas concerning ethics, methodology and tolerance within economics as a discipline and as a profession.

In 1956, Solow proposed a neoclassical growth model in opposition or as an alternative to Keynesian growth models. The Solow model of economic growth provided foundations for models embedded in the new theory of economic growth, known as the theory of endogenous growth, such as the renowned growth models developed by Paul M. Romer and Robert E. Lucas in the 1980s and 90s. The augmentations of the Solow model described in this book, excepting the Phelps golden rules of capital accumulation and the Mankiw-Romer-Weil and Nonneman-Vanhoudt models, were developed by the authors over the last two decades. The book identifies six spheres of interest in modern macroeconomic theory: the impact of fiscal and monetary policy on growth; the effect of different returns to scale on production; the influence of mobility of factors of production among different countries on their development; the effect of population dynamics on growth; the periodicity of investment rates and their influence on growth; and the effect of exogenous shocks in the form of an epidemic. For each of these issues, the authors construct and analyze an appropriate growth model that focuses on the description of the specific macroeconomic problem. This book not only continues the neoclassical tradition of thought in economics focused on quantitative economic change but also, and to a significant extent, discusses alternative approaches to certain questions of economic growth, utilizing conclusions that can be drawn from the Solow model. It is a useful tool in analyzing contemporary issues related to growth.

This book establishes that neoclassical economics based on the marginal utility calculus failed to derive a theory of consumer market price discovery consistent with the experimental market evidence. Such markets involve inherently discrete final-demand items bought for consumption and not subject to resale. Classical economists following Adam Smith articulated a rich narrative of price discovery theory consistent with experimental evidence based on operational concepts of discrete demand values (maximum willingness-to-pay), and symmetrically, supply costs (minimum willingness-to-accept). We develop and extend a mathematical model of classical market price formation. Chapter 1 & 2 describes this theme and chapter 3 connects it with experiments. Chapter 4 builds on experimental examples for an intuitive overview of the theory. A partial equilibrium version of the theory constitutes Chapter 5. Chapter 6 extends this framework to price formation by wealth constrained agents in multiple-goods markets. Chapter 7 applies this framework to the study of re-tradable durable-goods and financial claims that are subject to sources of instability absent in markets for consumer non-durables.

There is controversy among economists over just what it is that economists should do.The controversy is centered on the question whether what is called “neoclassical” or “mainstream” economics provides the appropriate template for performing economic analysis. Neoclassical economics is based on the principle that economic behavior is guided by “rational choice,” i.e., choice based on reason rather than sentiment.Challenges to this principle come from several fields of study: behavioral economics, neuroeconomics, Austrian economics, Keynesian economics, and others. A common thread running through these fields is that the rational choice assumption is unrealistic and therefore not useful for analyzing economic policy choices.It is important, however, to distinguish between economic policy choices, which are frequently irrational, and how individuals are observed to react to these choices. Examples of irrational policy choices are minimum wage laws, buy-American rules, and corporate tax increases. The job of the economist is to play a role akin to that of preachers, in exposing such choices for their irrationality. Mainstream economics shows that people react to these choices in a manner that impairs the performance of the economy.

I​n 1865, economist William Stanley Jevons published The Coal Question, describing the crucial role that coal played in British economic development. Here, he enunciated what has come to be known as the Jevons paradox, which stated that improvements in resource efficiency leads to greater resource use as the expansion of scale occasioned by lower operating costs overwhelms the savings due to greater efficiency. The implications for any sustainability scenario are enormous and a major theme of this book. While The Coal Question provided the theory that was a precursor to peak oil and resource limits to growth, it was followed six years later by the Theory of Political Economy, the first English-language work of neoclassical economics, which denies the importance of energy as a special commodity. In spite of this apparent contradiction, in this book biophysical economist Kent Klitgaard makes clear that there is no epistemological break between The Coal Question and Theory of Political Economy. Indeed, the Jevons paradox makes little sense in the absence of a behavioral theory grounded in marginal utility, which recognizes the satisfaction that each of us gains as consumers of one more unit of a good or service. Jevons could not solve this paradox in light of his belief that coal mines were becoming exhausted and more expensive to operate, and that there was no substitute for coal. However, he was uninterested in questions of sustainability; rather, he wanted to maintain British industrial and imperial dominance. Did the eventual substitution of oil for coal simply allow us to run through other resources at an accelerated rate? Indeed, the petroleum economy of the 20th and early 21st centuries has presented vastly expanded opportunities for the operation of the Jevons Paradox. This book shows the connections among the different paradoxes in Jevons'work, and exposes the potentially fatal flaws that confound technological solutions to the sustainability challenge.

Neoclassical economics has been criticized from various angles by orthodox schools. The same can be said about its particular branch: the theory of the firm.This book demonstrates how a successful theory of the firm can be presented without flawed notions of a neoclassical framework and used to comprehend actual business history. The author argues that we should start from the assumption that businesses are inevitably imponderable, as that is their nature, in the process of economic evolution. The book offers an in-depth exploration of neoclassical limitations by examining each of the small details associated with the famous MR = MC rule. It follows a step-by-step approach, which starts off with neoclassical assumptions and then moves into more empirically sound theory, based on modeling logic and rooted in real world examples. The author presents a novel discussion on the size of the firm, both in terms of classifying a firm's expansion and about the factors that limit the size of the firm and argues how formal pricing theory can be built using more indeterminate assumptions about firms. Further, there is a discussion on how firms are rooted in amorphous industries, which helps to explain economic progress better by emphasizing the importance of economic experiments, mistakes and bankruptcies.This is a valuable reference for scholars and researchers who are interested in a range of topics from microeconomics, through pricing theory to industrial organization, history of economic thought and managerial economics.

This book presents an integrated jurisprudential critique of neoclassical microeconomic theory. It explains what is ‘really wrong'with the theory both descriptively, as well as normatively. The criticism presented is based on questions of jurisprudence, and on neoclassical theory's sins of omission and commission concerning the underlying system of property and contract. On the positive side - while the presentation is almost entirely non-mathematical - the book contains the first mathematical treatment of the fundamental theorem about property and contract in jurisprudence that underlies a market economy.The book follows the tradition of John Stuart Mill as the last major political economist who considered the study of property rights as an integral part of economic theory. The conceptual criticisms presented in this book focus on the descriptive and normative misconceptions about property and contracts that are deeply embedded ideology in neoclassical economics, not to mention in the broader society. The book recognizes that the idealized microeconomic theory is not descriptive of reality and focuses its criticism on conceptual mistakes in the theory, which are even clearer due to the idealized nature of the theory. Therefore, the book is a must-read for scholars, researchers, and students interested in a better understanding of jurisprudence in economics, neoclassical microeconomic theory, and political economy in general.

This collection of essays of provides a comprehensive and detailed account of several aspects of the Cambridge School of Economics, which featured a number of outstanding figures such as Keynes, Sraffa, Kahn, and Joan Robinson. Scholars interested in heterodox economics, the history of economic thought and political economy will find in this book the Keynesian leitmotivs—the fight against unemployment, and the roles of money and uncertainty—which make Keynes's legacy relevant for today's world. The contributions here are written in the spirit of Keynes, and are persuasive and accessible to the general public.

Mainstream economics almost completely ignores the role power plays in determining economic outcomes, which means it can only provide partial explanations of the distribution of wealth and income, and of the problems associated with inequality and poverty. For many, this is a fundamental failing that severely limits its relevance to the real world and is the source of much dissatisfaction with, and cynicism about, economics and economists. Ozanne explains how this neglect of power has come about over the past 150 years and why it is important. He reviews various definitions and theories of power from across the social sciences and proposes a new approach that could bring considerations of power back into standard economic theory and economics teaching. The approach is simple and intuitive, involving little more than re-envisioning the social welfare function as a'political economy function'. However, if adopted in economics teaching, it could radically change the way young economistsare taught to think about economic problems and lead to a'return to political economy'.

Information is a central concept in economics, and The Knowledge We Have Lost in Information explores its treatment in modern economics. The study of information, far from offering enlightenment, resulted in all matter of confusion for economists and the public. Philip Mirowski and Edward Nik-Khah argue that the conventional wisdom suggesting'economic rationality'was the core of modern economics is incomplete. In this trenchant investigation, they demonstrate that the history of modern microeconomics is better organized as a history of the treatment of information. The book begins with a brief primer on information, and then shows how economists have responded over time to successive developments on the concept of information in the natural sciences. Mirowski and Nik-Khah detail various intellectual battles that were fought to define, analyze, and employ information in economics. As these debates developed, economists progressively moved away from pure agent conscious self-awareness as a non-negotiable desideratum of economic models toward a focus on markets and their design as information processors. This has led to a number of policies, foremost among them: auction design of resources like the electromagnetic spectrum crucial to modern communications. The Knowledge We Have Lost in Information provides insight into the interface between disputes within the economics discipline and the increasing role of information in contemporary society. Mirowski and Nik-Khah examine how this intersection contributed to the dominance of neoliberal approaches to economics, politics, and other realms.

Despite some diversification modern economics still attracts a great deal of criticism. This is largely due to highly unrealistic assumptions underpinning economic theory, explanatory failure, poor policy framing, and a dubious focus on prediction. Many argue that flaws continue to owe much of their shortcomings to neoclassical economics. As a result, what we mean by neoclassical economics remains a significant issue. This collection addresses the issue from a new perspective, taking as its point of departure Tony Lawson's essay ‘What is this ‘school'called neoclassical economics?'. Few terms are as controversial for pluralist and heterodox economists as neoclassical economics. This controversy has many aspects because the term itself has different specifications and connotations. Within this multiplicity what we mean by neoclassical matters to pluralist and heterodox economists for two primary reasons. First, because it informs how we view and critique the mainstream; second, because the relationship between heterodox and mainstream economics influences how heterodox economists model, apply methods and construct theory. The chapters in this collection each have different things to say about these matters, with contributions ranging across the work of key thinkers, such as Thorstein Veblen and Kenneth Arrow, applied issues of non-linear modelling of dynamic systems, and key events in the history of economics. This book will be of use to those interested in methodology, political economy, heterodoxy, and the history of economic thought.

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 examines new classical macroeconomics from a comparative and critical point of view that confronts the original texts and later comments as a first dimension of comparison. The second dimension appears in a historical context, since none of the new classical doctrines can be analyzed ignoring the parallelism and discrepancies with the theory of Keynes, Friedman or Phelps. Radicalism of new classical macroeconomics has brought fundamental changes in economic thought, but the doctrines got vulgarized and distorted thanks to the mass of followers. Nowadays, economic theory and policy, trying to find their ways, have a less clear relationship than ever. Therefore, this volume is aimed at mapping and reconsidering the policy instruments and transmission mechanisms offered by the new classicals. Its central question points to the real nature of new classical macroeconomics: what consequences are grounded by the assumptions new classicals used. Moreover, issues raised by automatic fiscal stabilizers and fiscal reforms are analyzed as well, even if they were out of the range of classical texts. The book draws a picture of new classical macroeconomics stressing the analogies with Keynesian countercyclical policies, instead of the discrepancies commonly held.

Alfred Marshall was anxious to do good. Intended by an Evangelical father for the vocation of clergyman, the author of the mould-shaping Principles of Economics remained to the end of his days a great preacher deeply committed to raising the tone of life. First published in 1990, Alfred Marshall's Mission explains how this most moral of political economists sought to blend the downward sloping utility function of Jevons and Menger with the organic evolutionism of Darwin and Spencer, how this celebrated theorist of social alongside economic growth sought to combine the mathematical marginalism of Cournot. Thunen and Edgeworth with the ethical uplift of Green, Jowett and Toynbee. The conclusion reached is that perhaps Marshall was, after all, too anxious to do good. Far more economists, however, have been not anxious enough; and that in itself gives this study of Marshall's life and times a present day relevance which would, no doubt, have appealed strongly to the shy Cambridge professor who is its subject.

The marginalist revolution of the late nineteenth century consolidated what Karl Marx and Piero Sraffa called ‘vulgar economy', bringing with it an emphasis on a scarcity theory that replaced the classical surplus theory. However, the classical political economy of Adam Smith and David Ricardo has been revived within the Cambridge economic tradition. This book looks at how different branches of the Cambridge economic tradition have focused on various aspects of this revival over time.The author shows that classical political economy is distinct from vulgar political economy in terms of its economic, social, and ethical theory, with each difference resting on an issue of ontology. Structured in three parts, the book examines the central contested aspects of these theories, namely the nature of value, the relationship between human beings and social structure, and the nature of human wellbeing. The Cambridge Revival of Political Economy will be relevant to students and researchers within the fields of political economy, history of economic thought, politics and philosophy.

This is not a festschrift, but a study of the prodigious Samuelson phe­ nomenon, his history-making contributions to and impact on the econom­ ics of our age, and the intricate, often perplexing, and divergent trends in modern economics - all intensely controversial subjects that will be argued, scrutinized, and periodically reassessed by economists of various strands and traditions for years to come, for, as Samuelson wrote of Pigou,'immortality does have its price.'A scholar with such an out­ standing body of contributions'must expect other men to swarm about it'(1966, p. 1233), subject it to scholarly scrutiny, and challenge it. Although Paul Samuelson was 65 on May 15, 1980 (and our best wishes go out to him for long life and continued enrichment of economics), this is neither a birthday party nor a gathering of only the Good Fairies, for, as he himself has said of Marx,'a great scholar deserves the compliment of being judged seriously'and critically (1972, p. 268). In accordance with the rule of Roman law, audiatur et altera pars, I have invited representative scholars of widely divergent perceptions to offer their critical evaluation of the'age of Samuelson.'While the response was by and large gratifying, some scholars were unable to meet the deadline, ix x PREFACE and with much compunction I have had to expand my own essays to partly fill the gaps.

Warren J. Samuels Each book in this series explores the present status of its field in terms of where it is, how it got there, the existing tensions within the field, and something of how the field might develop in the future. Each book presumes that work in each field is neither settled nor unequivocal. Each book attempts to comprehend its field as an evolving, developmental process or set or efforts. This particular book, covering neoclassical economics, is the third of three in the field of the History of Economic Thought. The others are Pre-Classical Economic Thought, edited by S. Todd Lowry, and Classical Political Economy, edited by William O. Thweatt. Each one conducts the same kind of analysis as the others in the series, with the understanding that here we are dealing with the history of interpretation, rather than a substantive body of analysis of a certain aspect of the economy: for example, labor or international trade. (That understanding must be com­ plex and subtle, inasmuch as revision of interpretation of earlier ideas is part of the process-both cause and consequence-of re-analyzing the economy.) In this group we are interested in how recent and contemporary writers have interpreted the history of economic thought differently, both among themselves and from earlier writers. 1 NEOCLASSICAL ECONOMIC lHEORY 2 Several topics must be discussed to place such work in perspective, in part as it is here applied to the history of the interpretation of neoclassical economics.

Alfred Marshall has traditionally been listed alongside pioneering'neoclassical'economists. In this volume Neil Hart challenges this view, illuminating the ambiguities within Marshall's work, and exploring his reconciliation of two modes of thinking, equilibrium economics and evolutionary economics.

Heinz Kurz is recognised internationally as a leading economic theorist and a foremost historian of economic thought. This book pays tribute to his outstanding contributions on the occasion of his 65th birthday by bringing together a unique collection of new essays by distinguished economists from around the world.Keynes, Sraffa, and the Criticism of Neoclassical Theory comprises twenty-three essays, covering themes in Keynesian economic theory, in the development of the modern classical approach to economic theory, linear production models, and the critique of neoclassical theory. The essays in this book will be an invaluable source of inspiration for economists interested in economic theory and in the evolution of economic thought. They will also be of interest to postgraduate and research students specialising in economic theory and in the history of economic thought.

`In Alfred Marshall's theory of the human mind, the development of knowledge is conditioned, though not determined, by the context in which it occurs; by a natural extension, so is the interpretation, response to and use of knowledge. That is the organising principle of this book, and no one is better equipped to apply it than the team which produced The Elgar Companion to Alfred Marshall. What we can learn from these studies has wide application in economics - and beyond.'---Brian Loasby, University of Stirling, UK`The team responsible for producing the exemplary Elgar Companion to Alfred Marshall in 2006 has now assembled this complementary volume which contains an equally authoritative collection of studies dealing with the fortuna or intellectual and cultural impact of Marshallian economics in Britain, Europe, North America, Australasia, and Asia. Together the books make an invaluable contribution to the reassessment of Marshall's reputation and the diffusion of his economic ideas.'---Donald Winch, University of Sussex, UKThis is a unique and detailed book which surveys the diffusion and reception of Alfred Marshall's ideas and the ways they have influenced the development of economic science up to the present day.This is an accessible and extremely readable work offering an interesting perspective on the national traditions of economic thought, in both English and non-English speaking countries, as well as on the work of leading economists. As this work demonstrates, the variety of responses elicited by Alfred Marshall's thought testifies to its richness as well as to the plurality of conceptions of the role and tasks of economics in different times and places. This book complements the authors'previous work The Elgar Companion to Alfred Marshall.The Impact of Alfred Marshall's Ideas will appeal to researchers and academics at all levels of economics and especially the history of economic thought.

This book provides a systematic account of financial crisis in the developing world by exploring how Minsky's theory may be extended to countries at early stages of financial development, going beyond the parameters of the established'emerging market crisis'literature.

In this thought-provoking book, well known economists Kurz and Salvadori cover original findings and new vistas on old problems. They cover: alternative interpretations of classical economists new growth theory the relationship between Sraffian theory and Von Neumann the treatment of capital in neoclassical long-period theory. Incorporating cutting-edge research and new work, this book will be of great interest to those working in the field of the history of economic thought.

This book explains the debate over the Cambridge controversies of the 1960s and 1970s. In a compelling and comprehensive argument, Birner discusses the main contributions to the controversy in a series of case studies. He gradually develops a methodological model of idealizations that explains both the progress of the debate and the historical iron

The primary aim of the book is to provide a critical evaluation of the origin and development of the Cambridge saving-investment analysis. This work disentangles painstakingly from a maze of sometimes contradictory, obscure and often neglected contributions, the line which leads from Marshall's interest theory to Keynes's income adjustment process. In particular, it charts, for the first time, the various steps taken by this line of inquiry in the writings of Pigou, Hawtrey, Robertson, Lavington and Keynes.

Less than fifty years after the publication of Marshall's Principles Cambridge once again set economics on a new path with the publication of Keynes's General Theory. This book examines the developments in Cambridge monetary and trade cycle theory that were moving it forwards but were also sowing the seeds for the collapse of the Marshallian neoclassical framework. The analysis shows how Cambridge economists such as Keynes, Robertson, Lavington and Hawtrey had built on the foundations of Marshall and Pigou to produce theories of adaptive behaviour which acknowledged that the invisible hand could fail in the short run. This established a conflict with the long run theory of market clearing equilibrium which, though it could be ignored at first, had finally to be resolved.

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