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Contextual economics weaves together aspects of orthodox and heterodox economics theories (e.g. feminist, ecological, Keynesian and Marxist economics) in such a way that (re)interprets formal economic models within changing social, historical and environmental contexts. Drawing from the work of Julie Nelson, Kate Raworth and process philosophers, this paper conceptualises the contextual economic paradigm as nesting static abstractions within changing contexts. This brings into question the static metaphysics assumed by mainstream neoclassical economics, and presents an alternative basis for economics arising from processrelational metaphysics. This leads to an economics that: situates the economy as a subsystem of society and ecosystems; replaces Homo economicus with persons-in-communities; and redirects economic policies from profit and GDP growth to purpose and improving wellbeing. This shift in thinking, metaphysics and economics--nesting static in processes--is posited as a critical reorientation of economic decision-making for personal and planetary wellbeing. [ABSTRACT FROM AUTHOR]

We propose a relational theoretical model of economic organization that offers new insight into the organizing dynamics of economic systems. Neoclassical and complexity economics are, in their Western cultural origins, based on an assumption of the primacy of the discrete individual. Collectivist economic traditions are based on the principle of collective interest rather than self-interest. We attempt a rapprochement of individualist (especially free market) and collectivist (especially centrally planned) economic cultures and traditions by modelling economic organization as arising from individual and collective dynamics and the relationships between them. Structure, process, function, and content are four fundamental inter-related properties of our model of economic organization. We posit the existence of micro, meso, macro scales of economic organization in all of structure, process, function, and contents. To operationalize our relational model, the conventional bottom-up process of self-organization is reconceived to involve relationships within micro-, meso-, and macro-economic organization. In turn, the new concept of socio-cultural organization is construed to involve relationships between and among economic organization, across micro, meso, and macro scales. Our model of relations provides a structure for complex-realist exploration, making cross-scale inter-relationships explicit and by providing a structured language for description of these relationships. [ABSTRACT FROM AUTHOR]

Precise multi-scenario projections of future economic outputs based on localised interpretations of global scenarios and major growth drivers are important for understanding long-term economic changes. However, few studies have focussed on localised interpretations, and many assume regional uniformity or use key parameters that are recursive or extrapolated by mathematical methods. This study provides a more intuitive and robust economic framework for projecting regional economic growth based on a neoclassical economic model and shared socioeconomic pathways (SSPs) scenarios. A non-uniform version of SSP2 (the middle-of-the-road scenario) was developed, and more detailed population projections for China were adopted using municipal-level data for 340 districts and parameter settings based on China's recent development. The results show that China's GDP will vary substantially across SSPs by 2050. Per capita GDP ranges from 19,300 USD under SSP3 (fragmentation) to 41,100 USD under SSP5 (conventional development). Per capita GDP under SSP1 (sustainability) is slightly higher than under SSP2, but lower on average than under SSP5. However, SSP1 is a better choice overall because environmental quality and equity are higher. Per capita GDP growth will generally be higher in relatively low-income regions by 2050, and the upper-middle-income provinces will become China's new engine for economic growth. [ABSTRACT FROM AUTHOR]

Purpose The evolution of International Financial Reporting Standards (IFRS) was nurtured by economists and accountants loyal to the philosophical basis of what is often referred to as “Western” market economies, being classical and neoclassical contracting theories. The purpose of this paper is to illustrate how a particular Asian cultural attribute (guānxì ) impacts on the efficacy of fair value measurement.Design/methodology/approach Using a literature review and research of studies of the adoption of IFRS in China, studies of both guānxì and fair value in Chinese accounting research, this study unbundles Williamson’s governance structure and contracting theory to examine how guānxì is positioned orthogonally to fair value (market-oriented valuation) principles for financial reporting. This is followed by a case study of the events surrounding the collapse of China Medical Technologies.Findings Guānxì is integral to Asian economies and economic transactions. Resulting conditions, characterised by relational contracting, may not meet the qualitative characteristics of neutrality and faithful representation in fair value measurement of assets and liabilities. The same may be true when insider or “trusted party transaction” values prevail for large ticket transactions among entities in any jurisdiction.Research limitations/implications Future research on the impact of guānxì may be constrained by its often hidden, and yet dynamic, character; and the varieties of its manifestations.Originality/value This study highlights how difficult it may be to achieve both comparability and relevance in the asset and liability recognition and measurement rules in Asian (and possibly also other) economies adopting accounting principles that are developed in a Western context. [ABSTRACT FROM AUTHOR]

An interview with economist Lee E. Ohanian is presented. Topics discussed include his paper entitled "Neoclassical Models of Aggregate Economies," the departure from the traditional business cycle approach which respond to shocks from technologies and government policies, and the recommendation on reforming immigration for highly skilled workers who wants to start business in the U.S.

The ISLM model, introduced in 1936-37 to provide interpretations of Keynes's General Theory, subsequently emerged in its Hicks-Hansen form as the workhorse and 'trained intuition' of post-war macroeconomists. However, ISLM is an essentially orthodox model based on neoclassical foundations and fails completely as an adequate representation of central elements of Keynes's macroeconomic thought. This article proposes IYLM as a replacement for ISLM, the new model being General Theory-compatible in that it is grounded only on key propositions in that work. Its purpose is to contribute, within the constraints of a two-market framework, to the resuscitation of Keynes's macroeconomics as an alternative to the inadequacies of much current macroeconomics. The first part of the article derives the model and argues that those sympathetic to The General Theory can accept the IYLM framework whilst simultaneously rejecting ISLM. The second part shows that Hicks- Hansen ISLM is based on an income-augmented form of orthodox loanable funds theory. [ABSTRACT FROM AUTHOR]

This comment shows that Walras, the central figure among the Neoclassical school founders, describes a comprehensive theory of production, capital and money; hence, Nicholas's main claims that "the Neoclassical approach has a fundamentally flawed view of the determination of commodity prices because it conceives of them as being formed in the first instance in the process of exchange abstracting, in the sense of ignoring, production and money" are not based on Walras's theory, and they are unfounded and incorrect. Nicholas accepts the erroneous method of post-Walras authors, namely, when they discuss Walras's approach, the economy is presented either through the exchange economy or through the production economy; moreover, these representations differ from his original model and are incomplete. The result is that these two different theories, post-Walras authors' theory and Walras's original theory, have been identified with each other; and these terms are used interchangeably as if they are not any different from each other. [ABSTRACT FROM AUTHOR]

The purpose of this article is to analyze the relationship between the discipline of Behavioural Economics and the Neoclassical School. On the basis of the available literature, the paper aims to investigate if the two branches are totally opposite, or if the behavioural theories only extend and complement the mainstream economics. [ABSTRACT FROM AUTHOR]

We present a neoclassical economic model of the human right to water using a nonrenewable resource model inclusive of a backstop technology. The right is interpreted as a minimum consumption requirement the government is obligated to fulfill in the event that any one household cannot do so independently. Differing by income levels, households maximize utility by purchasing a composite consumption good and water from two distinct, government-owned sources. Facing physical and financial constraints, the government uses fiscal policy to address potential human rights violations. Reducing the analysis to two periods, we develop a novel approach to compare total welfare levels from a joint human rights and neoclassical economics perspective. We define a human rights welfare standard and discuss cases in which traditional social welfare measures would exceed, violate, or meet this standard. We thus offer a unique way to merge economic analysis with human rights research. [ABSTRACT FROM AUTHOR]

This paper argues that classical-Marxian models of economic growth are similar to neoclassical models in neglecting the role of aggregate demand, either by omitting aggregate demand issues altogether or by relegating the role of aggregate demand to the short run. By reviewing the writings of classical-Marxian authors and by examining recent contributions to the classical-Marxian literature, it discusses the implicit assumptions that allow these theories to neglect the role of aggregate demand by examining alternative growth theories in which aggregate demand has a major role to play. It also assesses to what extent classical-Marxian economists are justified in neglecting aggregate demand as a determinant of long-run growth. [ABSTRACT FROM AUTHOR]

This article investigates the proposition that situation is the determinant of selection and valuation. It investigates the ways in which various types of situation dictate selections and valuations and contrasts this process with the marginal model of economic theory. Rational and behavioural approaches to theory are compared. It is suggested that situation-related selection provides a more realistic account of consumer selection than neoclassical theory. The ‘situations’ that govern choice are seen as established through a process of ‘support-bargaining’, whereby individuals adjust their behaviour and opinions to gain the support of those around them. This process forms also the abstract ‘situations’ embodied in theories about the nature of the world and society. The individualism of neoclassical theory is displaced in the process of support-bargaining. The idea of support-bargaining focuses attention on the dependence of neoclassical theory on support to offset its fundamental faults. It is suggested that it be replaced with the theory of support-bargaining and associated situation-related selection. [ABSTRACT FROM AUTHOR]

The article presents a study which focused on the feasibility of empirically evaluating the internal dynamics of the Marshallian industrial district. The researchers used a model which is based on a structure-conduct-performance framework with multiple feedbacks. They also estimated the three equations that consist the model with the use of data from a sample of 45 districts found in the region of Castilla-La-Mancha, Spain from 1999 to 2004.

The magnitude and the direction of net international capital flows do not fit neoclassical models. The fifty U.S. states comprise an integrated capital market with very low barriers to capital flows, which makes them an ideal testing ground for neoclassical models. We develop a simple frictionless open economy model with perfectly diversified ownership of capital and find that capital flows among the states are consistent with the model. Therefore, the small size and "wrong" direction of net international capital flows are likely due to frictions associated with national borders, not to inherent flaws in the neoclassical model. [ABSTRACT FROM AUTHOR]

Although industrialization first occurred in England, it is thought that China, not England, may have been the world leader in technology at the time. Yet, China did not industrialize until 150 yr after England and nearly a century after less advanced European countries. This represents a puzzle because two-sector neoclassical growth models, such as Hansen and Prescott (2002) , that accurately match industrialization, require that more technologically advanced countries industrialize at an earlier date. I find that a model that accounts for cross-country heterogeneities in population density accurately predicts the timing of industrialization in China. ( JEL F43, N10, N30, O11, O14, O41) [ABSTRACT FROM AUTHOR]

This paper studies industry-level dynamics and demonstrates the ability of a modified neoclassical growth model to capture a range of empirical facts. The paper begins by using U.S. data to document skilled and unskilled labor trends within industry sector classifications as well as industry sector output trends. Using Current Population Survey data from 1968 to 2004, it is shown that the ratio of skilled workers to unskilled workers employed has risen in all industries. The absolute increase in this ratio was larger in the more skilled industries, while the growth rate was larger in the less skilled industries. Furthermore, using national income account data, it is shown that relatively high-skilled industries have accounted for an increasing share of output over time. A version of the neoclassical growth model is then constructed to match these observations. One important feature of this model is a structure that introduces new goods into the economy at each moment of time. The model is able to capture a rich set of labor market movements between sectors and between skill levels as well as changes in the relative output shares across industries, yet preserves many nice features of the neoclassical growth model.( JEL E13, J20, 030) [ABSTRACT FROM AUTHOR]

We study the effects of inflation for a small open economy when the representative agent has Marshallian preferences, with which the rate of time preference is a decreasing function of savings. An increase in the inflation rate reduces the permanent income of the representative agent, which, with Marshallian preferences, also reduces the rate of time preference. Hence, savings falls and the country runs a current account deficit. The numerical evaluations of the model suggest that inflation has significant effects on welfare in the steady state. [ABSTRACT FROM AUTHOR]

In the neoclassical growth theory, higher saving rate gives rise to higher output per capita. However, in the Keynesian model, higher saving rate causes lower consumption, which may lead to a recession. Students may ask, "Should we save or should we consume?" In most of the macroeconomics textbooks, economic growth and Keynesian economics are in separate, sometimes unsequential, chapters. The connection between the short run and the long run is not apparent. The author builds a bridge between the neoclassical growth theory and the Keynesian model. He links the Solow diagram and the IS-LM curves and depicts the short-run to long-run transition of the economy after changes in saving and other macroeconomic policies. [ABSTRACT FROM AUTHOR]

The article explores a synthesis between neoclassical economic theory and critical theory. The author views that the neoclassical paradigm is not inconsistent with the progressive anti-subordination and community building goals of critical theory. It presents neoclassical theory as an example of rigorous empirically based scholarship and suggests that critical theory could benefit from making similarly rigorous models.

Tony Lawson has argued that the methodology of neoclassical economics is deductivist: in constructing their formal models, economists hope to be able to provide explanations based on laws, as described by the deductive-nomological model of explanation. This article argues in contrast that neoclassical economics cannot be understood as following just one methodology. It is argued that neoclassicism exhibits two methodologies, one "official" and one tacit. The former is empiricist, and corresponds to the practice that has been described by Lawson. The latter, which can be called "hypothetico-deductive rationalism", amounts to the position that knowledge of the world can be obtained without any empirical verification of one's assumptions, simply by exploring the implications of the assumptions one makes. [ABSTRACT FROM AUTHOR]

The cardinal postulate of neoclassical economics is that individuals and entrepreneurs seek to maximize their unique positions in the world. Yet behind this postulate is an even more fundamental premise: that men are rational and can discern their own best interests. From Adam Smith on, it has been accepted that reasonable men act to maximize their own pecuniary advantage and in most economic models even the potential for irrationality is ignored. Nevertheless, it is becoming increasingly obvious from the research conclusions of other disciplines (psychology, philosophy, political science, and sociology in particular) that the simplistic notion of "economic man," posited so often in the economics literature, is more fancy than fact. There is an implicit recognition that the neoclassical assumptions may not be correct in the developing area of economic behaviorism. The economic behaviorists, however, adopt a more general definition of rationality, substituting what might be called a "modified rationality postulate" for the global rationality assumed in neoclassical theory. As a result, their conclusions do not differ greatly from those of the neoclassicists. Fortunately, ideas are now crystallizing in psychology which may enable us to shed light on decisions which previously would have had to be classified as non-rational, irrational, or unexplainable. Some of those ideas are explored. [ABSTRACT FROM AUTHOR]

Building on Ricardo's two-sector corn model (Pasinetti, 1960), the paper develops a classical alternative to the standard neoclassical two-by-two general equilibrium model (Jones, 1965; Uzawa, 1961/3). The alternative model has the following characteristics: (1) As against related Neo-Ricardian work, it is fully causal and capable of tracing the economy's traverse from arbitrary initial conditions to a growth steady state (with land-augmenting technical progress); (2) the simultaneous presence of a wage fund and of land makes possible the incorporation of expectations formation and perfect-foresight equilibrium. [ABSTRACT FROM AUTHOR]

In this paper I present conditions under which the long run stock equilibrium in Patinkin's general equilibrium model exists, is unique and is globally stable. These conditions are basically that all goods are weak gross substitutes and noninferior The model is developed in Patinkin (1965); Archibald and Lipsey (1958) were, I think, the first writers to study its long run properties. The demonstration of the proposition is a straightforward application of Morishima's (1964) generalizations of the Perron-Frobenius theorems.
Actually, the analysis applies to a somewhat wider class of models than Patinkin's, since the properties of his model which we use are those concerning the homogeneity of the demand and excess demand functions. It is clear that these properties will be true of other money models as well.
I make no particular defense of this model against, for example, the criticisms of Hahn (1965) and Clower (1967). However, the properties of it that I use are standard assumptions in expositions of neoclassical monetary theory (see also Friedman, 1969, and Samuelson, 1968). For that reason alone it seems worthwhile to investigate its long run behavior since it is only in the long run that the principal results of that theory hold. [ABSTRACT FROM AUTHOR]

A now widespread critique of the Rotterdam Model correctly observes that the model's properties and theoretical implications are known exactly only in a highly restrictive and uninteresting special case. Hence the model currently can be related exactly to available theory only if that unacceptably restrictive special case is maintained. In this paper, we shall fill the gap in our knowledge which has been observed to exist by the model's critics. We shall derive the model's theoretical properties at the aggregate level over a much larger region of the macroparameter space than the tiny region within which the currently understood special case is defined. [ABSTRACT FROM AUTHOR]

The article presents information on efficient capital accumulation in a multisector neoclassical model. The problems of characterizing efficient infinite programmes, and in particular efficient competitive programmes, have been much discussed in the literature by D. Cass and M. Majumdar. For the standard neoclassical model with one producible good and a more general model with many capital goods and one consumption good, the fundamental result of Cass provides people with an easily applicable criterion for testing the efficiency of competitive programmes, viz, a competitive programme is efficient if the terms of trade of the consumption good do not deteriorate too fast. The appropriate differentiability and curvature assumptions are imposed directly on the technology, and no restriction is imposed on the nature or number of consumption goods. It should be noted that the result obtained here is qualitatively different from the transversality condition criterion obtained by Majumdar, for the simple linear model, with many consumption goods.

• We suggest a 'new' ecological economics which foregrounds ecological ethics. • A new ecological economics could de -commodify nature. • A new ecological economics could promote Earth jurisprudence and ecojustice. • Models of ecological economics are compared re limits, equity, and ethics. • The steady state economy compares best of all models. Neoclassical economics has been dominated by anthropocentrism. We argue that much of ecological economics (EE) is now also dominated by this. EE should now break-free from anthropocentrism, including the commodification of nature. We suggest a 'new' ecological economics which foregrounds an ecocentric worldview, ecological ethics and ecojustice. These can assist society to reach a truly sustainable future where it accepts nature's intrinsic value and extends respect to the nonhuman world. Models associated with EE are considered in terms of their approach to ecological limits and equity, as well as ethics. The paper concludes the only EE model that comes close to foregrounding ecological ethics is the steady state economy. Most of the others explicitly (or implicitly) retain an anthropocentric bias. Four approaches to 'moving forward' are suggested: achieving ecocentrism; advocating Earth jurisprudence; supporting ecojustice; and dealing ethically with the commodification of nature. We argue that a rejuvenated EE should de -commodify nature. Hence we should consider 'People's Contributions to Nature', rather than just 'Nature's Contributions to People'. For both practical and ethical reasons, the paper concludes that EE needs to reevaluate its worldview and ethics. A possible research agenda is suggested that could help integrate ecological ethics with ecological economics. [ABSTRACT FROM AUTHOR]

The article "It's Not Factor Accumulation: Stylized Facts and Growth Models," by William Easterly and Ross Levine moves away from the critical assumption in the neoclassical revival that the level of technology is the same in all countries. The article makes an implicit case for moving away from a narrow focus on testing models, and in its place, the authors challenge economists to understand what happens in the countries they study. At a substantive level they suggest that there is abundant evidence that the level of technology does vary across countries. At a methodological level, they attack business as usual in empirical growth theory. To avoid the threat that a wide variety of evidence would pose to the neoclassical revival, economists advocated a narrow methodology based on model testing.

Irving Fisher is rightly thought of as one of the pioneers of neoclassical economics. Fisher's contributions in Modern behavioral economics is characterized by three features. First, rational choice is used as a starting point for developing theories of economic decision-making and market equilibria. Second, actual individual behavior is analyzed using a variety of data-collection methods. Third, these observations of human behavior, along with some lessons from other social scientists are used to explain and understand the ways in which the rational theories fail to describe the world we live in. Two of Fisher's favorite topics, time preference and money illusion, illustrate how he utilizes this approach. In his book "The Theory of Interest," Fisher develops what is still thought of as the modern theory of intertemporal choice. The famous Fisher diagram is still an essential element of any course on microeconomics, macroeconomics, or finance. The outcome of this analysis is that at the margin everyone has the same preferences for intertemporal substitution.

Presents an abstract related to the Neoclassical revival in growth economics. Revival of the neoclassical growth model for explaining the differences in levels and growth rates of output per worker in the U.S.; Features of the neoclassical growth model; Role of productivity difference as a dominant source of the large international dispersion in levels and growth rates of output per worker.