oligopsoneia-deactivated2018051 asked: Of the resources list you reblogged, I suspect that you might get the most out of Shaikh's "Capitalism," though presumably as a longer read - there are higher technical barriers to entry compared to many resources on the list but fewer "cultural" ones, if that makes sense.

nostalgebraist:

nostalgebraist:

Damn this looks really good, thanks

(For those reading this post who don’t want to go back to the earlier one, here’s the PDF)

Hildebrand (1994) suggests that one should leave “preferences and choices [to] … psychiatrists” and focus instead on establishing the statistical conditions under which basic economic patterns such as downward sloping market demand curves can be derived (Dosi, Fagiolo, Aversi, Meacci, and Olivetti 1999, 141). Hildebrand (1994) and Trockel (1984) provide the pioneering work in this regard.

In each of these cases, economic shaping structures create limits and gradients that channel aggregate outcomes: the positive profit survival criterion in the case of the firm, individual economic characteristics in the case of income distribution, and the budget constraint in the case of individual consumer choice. Each of these gives rise to stable aggregate patterns which do not depend on the details of the underlying processes. And precisely because many roads can lead to any particular result, we cannot be content with considering a model valid simply because it yields some observed empirical pattern. Other facets of the model may yield conclusions which are empirically falsifiable, for which the model must also be held responsible. […]

In what follows, I will demonstrate that the major empirical patterns of consumer behavior can be derived from two key shaping structures: a given level of income, which restricts the choices that can be made; and a minimum level of consumption for necessary goods which introduces a crucial nonlinearity. The patterns in question are downward sloping market demand curves, income elasticities of less than one for necessary goods and more than one for luxury goods (Engel’s Law), and aggregate consumption functions that are linear in real income in the short run and include wealth effects in the long run (Keynesian type consumption functions). The analytical derivations will be supplemented by the simulation of four radically different models of individual behavior: (1) a standard neoclassical model of identical hyper-rational consumers in which a representative agent obtains; (2) a model of heterogeneous hyper-rational consumers in which a representative agent does not obtain; (3) a model with diverse consumers in which each one acts whimsically by choosing randomly within the choices afforded by his or her income (this is Becker’s irrational consumer); and (4) a model inspired by Dosi et al. (1999) in which consumers learn from those around them (their social neighborhood) and also develop new preferences (mutate) over time. Despite their differences, all of the models give rise to the very same aggregate patterns. The essential point is that the same macroscopic patterns can obtain from a great variety of individual behaviors. This way of proceeding harks back to an earlier approach initiated, and subsequently abandoned, by Becker (1962).

OK, this is already giving me cartoon heart-eyes, since this is the kind of approach that seems obviously necessary and important to me but to which I had given up on the prospect of finding in actually-existing econ

(Or, more accurately, you can find little sketches of things like this in the work of various “heterodox” economists, but the danger of heterodoxy is that you spend your career poking thorns in the side of orthodoxy rather than getting anywhere yourself; this guy seems to have a big, substantial positive theory, just one that starts out in an unusually promising way)

OTOH, it is frustrating that he uses the word “turbulent” a lot and I can’t find anywhere where he defines it (if he does at all, it is only after having used it many times without definition).  In a less mathematical book, I could accept being asked to reconstruct the sense of a term like this, but this is the sort of book where you’d expect such a term to have a precise definition, and/or a definition close to the established technical one

Part of it is that I have a background in fluid mechanics, so I know all sorts of things that “turbulence” could connote, and have trouble returning to a “colloquial” definition if that’s what’s being used here

oligopsoneia-deactivated2018051 asked: Of the resources list you reblogged, I suspect that you might get the most out of Shaikh's "Capitalism," though presumably as a longer read - there are higher technical barriers to entry compared to many resources on the list but fewer "cultural" ones, if that makes sense.

nostalgebraist:

Damn this looks really good, thanks

(For those reading this post who don’t want to go back to the earlier one, here’s the PDF)

Hildebrand (1994) suggests that one should leave “preferences and choices [to] … psychiatrists” and focus instead on establishing the statistical conditions under which basic economic patterns such as downward sloping market demand curves can be derived (Dosi, Fagiolo, Aversi, Meacci, and Olivetti 1999, 141). Hildebrand (1994) and Trockel (1984) provide the pioneering work in this regard.

In each of these cases, economic shaping structures create limits and gradients that channel aggregate outcomes: the positive profit survival criterion in the case of the firm, individual economic characteristics in the case of income distribution, and the budget constraint in the case of individual consumer choice. Each of these gives rise to stable aggregate patterns which do not depend on the details of the underlying processes. And precisely because many roads can lead to any particular result, we cannot be content with considering a model valid simply because it yields some observed empirical pattern. Other facets of the model may yield conclusions which are empirically falsifiable, for which the model must also be held responsible. […]

In what follows, I will demonstrate that the major empirical patterns of consumer behavior can be derived from two key shaping structures: a given level of income, which restricts the choices that can be made; and a minimum level of consumption for necessary goods which introduces a crucial nonlinearity. The patterns in question are downward sloping market demand curves, income elasticities of less than one for necessary goods and more than one for luxury goods (Engel’s Law), and aggregate consumption functions that are linear in real income in the short run and include wealth effects in the long run (Keynesian type consumption functions). The analytical derivations will be supplemented by the simulation of four radically different models of individual behavior: (1) a standard neoclassical model of identical hyper-rational consumers in which a representative agent obtains; (2) a model of heterogeneous hyper-rational consumers in which a representative agent does not obtain; (3) a model with diverse consumers in which each one acts whimsically by choosing randomly within the choices afforded by his or her income (this is Becker’s irrational consumer); and (4) a model inspired by Dosi et al. (1999) in which consumers learn from those around them (their social neighborhood) and also develop new preferences (mutate) over time. Despite their differences, all of the models give rise to the very same aggregate patterns. The essential point is that the same macroscopic patterns can obtain from a great variety of individual behaviors. This way of proceeding harks back to an earlier approach initiated, and subsequently abandoned, by Becker (1962).

OK, this is already giving me cartoon heart-eyes, since this is the kind of approach that seems obviously necessary and important to me but to which I had given up on the prospect of finding in actually-existing econ

(Or, more accurately, you can find little sketches of things like this in the work of various “heterodox” economists, but the danger of heterodoxy is that you spend your career poking thorns in the side of orthodoxy rather than getting anywhere yourself; this guy seems to have a big, substantial positive theory, just one that starts out in an unusually promising way)

oligopsoneia-deactivated2018051 asked: Of the resources list you reblogged, I suspect that you might get the most out of Shaikh's "Capitalism," though presumably as a longer read - there are higher technical barriers to entry compared to many resources on the list but fewer "cultural" ones, if that makes sense.

Damn this looks really good, thanks

(For those reading this post who don’t want to go back to the earlier one, here’s the PDF)