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Using two questionnaires, the first applied in Brazil in March 2020, at the beginning of the COVID-19 pandemic, and the second applied in August 2020, when the pandemic's effects were best known, the authors analyze society's perception of fair price and its influence on firms' actions in times of pandemic, through the lens of neoclassical and institutional theories. They also suggest if this perception causes consumers to punish companies that do not respect the informal rules of society. Together, the questionnaires provide evidence that society, through informal rules, plays a fundamental role in influencing the actions of firms. Finally, the analyses suggest that institutional theory produces better interpretations of society's behavior regarding its perception of fair price. This understanding could contribute to firms making more assertive decisions by mitigating possible risks that affect their brand and results. [ABSTRACT FROM AUTHOR]

We examine the neoclassical interpretations of Shiller's tests on stock market volatility and analyze their theoretical and empirical limitations. We then show that volatility can be interpreted in an alternative way in the light of a new macroeconomic model whose main innovative feature is that it relates dividends to the Classical concept of "normal distribution" and stock prices to the Keynesian "principle of effective demand." While a relatively stable normal rate of profit determines dividends, the continuous fluctuations of investment, income, and saving and the related portfolio choices influence the demand for shares and provoke stock prices volatility with respect to dividends. The Classical-Keynesian model is then extended to contemplate also a "financial instability hypothesis" and a "monetary circuit." Neoclassical and alternative stock market models are presented here by adopting a comparative approach—that is, a single system of equations in which the causal relations among its variables change according to the theory examined. [ABSTRACT FROM AUTHOR]

This article traces the complex intellectual path of Olivier Blanchard, a personification of the controversial evolution of macroeconomic research over the last three decades. After contributing to consolidation of the core of mainstream macroeconomics, Blanchard recently suggested ‘rethinking’ some of its key aspects to take stock of the lessons of the 2008 Great Recession, which he witnessed as the International Monetary Fund’s Chief Economist. This welcome discussion, which according to Blanchard should open mainstream macroeconomics to heterodox thinking, has so far produced a certainly interesting albeit theoretically contradictory synthesis and limited policy consequences. The most paradigmatic aspect of this rethinking of macroeconomics is represented by the abandonment in teaching of aggregate supply and demand in favor of a revival of the IS–LM model complemented by the Phillips curve. While this change of perspective does allow for the instability of ‘natural’ equilibrium to be emphasized, a deeper reading may prove incompatible with the neoclassical foundations of the mainstream approach. [ABSTRACT FROM AUTHOR]

The article considers the prerequisites of the concept of the national innovation system (NIS), and it demonstrates the role of neoclassical economic theory as well as evolutionary, institutional, and neo-Schumpeterian approaches to the formation of the NIS. The article identifies problems that must be addressed by the new concept, and it describes the main characteristics of the approaches that it fosters for the analysis of the NIS, including the analysis of the advantages and disadvantages of these approaches. The author proposes an alternative approach for developing NIS theory on the basis of the structural-objective and functional approaches to the analysis of the national innovation system. [ABSTRACT FROM AUTHOR]

The microeconomic version of the theory of induced innovation extends the logic of factor substitution and static efficiency to the process of technical change and attempts to show that the ‘bias’ of technical progress in agriculture will work in the same direction as factor substitution at given technology, with factor proportions changing in inverse relation to relative factor prices. This article argues that even within the model itself, the scope for rising labour productivity associated with land-saving technical progress appears to be rather limited. Econometric studies of technical change in Japanese agriculture support this view. Moreover, the theory of induced innovation tends to confuse static efficiency with ‘dynamic efficiency’ implying investments, technological progress and changing factor proportions over time. The theory of induced innovation does not identify anydriving forceof technical change. Therefore, it cannot explain adequately why technical progress takes place or does not take place. The article concludes by arguing that in an agriculture of poor smallholders, price control and price stabilisation rather than market-driven changes of relative factor prices are important in stimulating technical progress. [ABSTRACT FROM AUTHOR]

Social capital generally refers to norms and networks of trust, reciprocity and cooperation that facilitate collective action for a mutual benefit. Critical views of social capital purport that the neoclassical principle is dominant in economics and the social sciences, and thus offers a reductionist view of social norms and networks that is instrumentalist and individualist. Here we argue that, despite neoclassical (mis)treatments, social capital can constitute a path to a more pluralistic economics, provided we turn to alternative, non-neoclassical principles of rationality that restore the social aspects of human behavior. To this end, we relate social capital to the concept of social embeddedness, where individuals take part in multiple collective agencies, and freely engage in a reflexive process to assess different norms and networks. Hence, individuals' choices do not depend on their personal utility, but on their personal identity, that is, who they want to be when confronting these choices. [ABSTRACT FROM AUTHOR]

Karl Marx ends the first chapter of Capital with a discussion of 'commodity fetishism' or the economic and noneconomic conditions necessary for commodity exchange to occur. In today's most popular mainstream economics textbook, N. Gregory Mankiw outlines the forms, concepts, and methods of 'thinking like an economist,' including positive analysis, a focus on efficiency, and a host of assumptions about individual human nature. Comparing the two, we find that the 'fetishism of the commodity' parallels the set of conditions described by Mankiw as comprising 'thinking like an economist.' However, Mankiw treats these conditions as natural while Marx understands them to be social, historical, and open to change. I argue that numerous possibilities are opened up in economics education by destabilizing the 'market fetishism' of mainstream economics and teaching neoclassical theory as a social and historical construction rather than a reflection of economic reality. [ABSTRACT FROM AUTHOR]

This rejoinder contrasts a Keynesian approach for explaining unemployment in Germany's eastern region with a neoclassical, market-failure approach advanced by Christian Merkl and Dennis Snower. A skewed distribution of headquarters favoring the western region, combined with insufficient levels of effective demand for output—and subsequently for labor—are argued to be the key causes of persistent unemployment. Seven tables offer a comparative approach to output, investment, and labor demand in Germany's eastern and western regions, noting the emergence and persistence of "involuntary" unemployment appearing as a jobs' gap in the eastern region, especially for services. [ABSTRACT FROM AUTHOR]

In this article, part of an ongoing discussion, Samuelson (2000) is taken as the occasion for a critical examination of Samuelson's work on the classical economists and Sraffa, a subject of continuing interest for that author, especially after Sraffa (1960). The article argues for the existence in Smith and Ricardo of an alternative approach to distribution and prices, and it aims at a critique of Samuelson's contention that 'Smith, Ricardo and J.S. Mill used essentially the same logical paradigm as did Walras and Arrow Debreu' (2000: 140). In the first two sections, the attempt by Arrow (1991) to detect in Ricardo a theory of prices independent of demand - and founded instead on a real wage determined separately from, though not necessarily independently of, prices and the non-wage distributive variables - is considered with its implication of the wage entering the determination of the latter as an 'intermediate datum' of the theory. This then makes it possible to outline the characteristic analysis we find in Smith and Ricardo, where the wage as 'intermediate datum' entails a similar treatment of the output levels. The resulting theoretical structure is then used in order to answer, in sections III and IV, the two basic criticism, that Samuelson has advanced against Sraffa (1960). While the claimed dependence of the (1960) prices on an assumption of constant returns is voided by the mentioned treatment of outputs as intermediate data, the relevance of the Standard commodity, as well as that of Ricardo's 'invariable measure of value' is explained by the needs of determining non-wage incomes as a difference or 'residual', the essence of the theoretical structure under consideration. Section V then deals more directly with Samuelson's denial of the existence of a classical paradigm of economic theory. His arguments and interpretations are found to be in contrast with central features of Smith and Ricardo's work and, in particular, with their theory of wages. Thus, the admission of labour unemployment in 'normal' competitive positions compels Samuelson to a highly questionable interpretation of the chapter 'On Machinery' in Ricardo's Principles. In section VI, finally, the attribution to 'Sraffian literature' of a central concern for what Samuelson sees as 'steady states', but are in fact the traditional 'normal positions' of the economy leads the article to the deficiencies of neoclassical theory - an issue inevitably underlying the debate on the Classical paradigm. The dependence of the traditional versions of the theory, based on normal positions, on the notion of capital as a single magnitude - which forced the generalized abandonment of those versions in pure theory after the early stages of the capital controversies - is argued to emerge as equally present in the contemporary reformulations of the theory, thus affecting them, it is argued, no less than it did the abandoned earlier versions. [ABSTRACT FROM AUTHOR]

Relatively high rates of persistent unemployment plaguing the eastern region of Germany are argued to be caused especially by two factors engendering slack labor demand relative to supply. Demand for East German labor declined as (1) rapid privatization was followed by cross-regional capital flows, resulting in high levels of capital intensity and a dramatic shedding of labor. Reindustrialization and service-sector expansion proved too weak to generate sufficient labor demand. (2) Related to privatization, business headquarters moved to the west of Germany, resulting in a notable pattern of reindustrialization and the eastern region's specialization in intermediates vis-à-vis finished goods, engendering weak labor demand. [ABSTRACT FROM AUTHOR]