Disequilibrium Theory Research Articles

Heterogeneous determinants of local unemployment in Poland

We identify determinants of large disparities in local unemployment rates across Poland. Using an extensive panel data-set on the NUTS-4 level (i.e. the poviats level, or districts or counties level) we examine a wide range of determinants of local unemployment. Our research examines two groups of the determinants: one related to equilibrium theory and the other related to disequilibrium theory of local unemployment. We find that demographics, education and sectoral employment composition exert a stronger impact over rates of local unemployment than various demand factors. The impact of the determinants, while robust for outliers, is not homogeneous across Polish regions. In particular, in the most depressed local labour markets, skill improvement programmes do not appear to work and unemployment rates are relatively less responsive to investment. Our research suggests that there is no easy cure for local unemployment in Poland, but a few policies have the potential to slightly reduce existing disparities.

The case for increasing returns I: ‘The Hicksian Getaway’ and ‘The Hirshleifer Rescue’

The case for increasing returns is accepted by most heterodox economists. Yet allegiance to decreasing returns in orthodox circles still endures directly and in the form of substitution assumptions. In forty short years from 1928 to 1968, beliefs shifted from Pigou calling rising cost ‘inadmissible’ to Alchian deeming decreasing returns ‘a universally valid law’ until Kaldor revived the case for increasing returns in the 1970s. How did these shifts of view occur? After dapham opened the door and Pigou defined the orthodox stand, the 1930s debates swept through imperfect competition and many other issues into Keynesian disequilibrium theory. In 1939, ‘The Hicksian Getaway’ opened an Age of Denial leading to equilibrium theories based on substitution; then during the 1960s a second challenge to rising cost based on learning and technical change was defeated by ‘The Hirshleifer Bescue’ of decreasing returns and thus substitution in neoclassical theory. Why economists' substitution assumptions still hold sway is the focus of this study. First, the paper reviews ‘The Hicksian Getaway’ in its context and with respect to equilibrium models. Second, the paper analyzes and disproves ‘The Hirshleifer Bescue’ as an invalid argument based on a non-sequitur and thus simply asserted. Third, the case for increasing returns is developed into a theory of planning horizons supporting a generalized complementarity in economics. Some methodological implications are explored at the end.

The Road Less Traveled: Monetary Disequilibrium, Austrian Capital Theory, and the 'Keynesian Diversion'

Abstract For nearly 80 years, the field of macroeconomics has largely been shaped by the aftermath of the Keynesian revolution. Many economists have argued that this revolution and the subsequent internal and external disputes it has sparked have had the unfortunate side effect of crowding out much of what was good in macro-level analysis before it, leading to the dissatisfactory state of macroeconomics we have today. In the search for alternative paths for macroeconomics, I focus on two separate but compatible traditions: monetary disequilibrium (MD) theory and the Austrian business cycle theory (ABCT). I argue that scholars in these traditions employed a far richer micro-theoretic explanation for the business cycle well before Keynes’s General Theory. Unfortunately, their ideas were not united in time to mount a sufficient counterattack to the Keynesian crusade. My goal is to unite the best elements of these two traditions by providing what I believe is the “missing link” that can help connect these alternative paths: free banking theory.

Measuring the Market Efficiency of Housing Market in China: Based on the Perspective of Disequilibrium

Based on the disequilibrium theory, the paper measured the market efficiency of housing market in China from 1998 to 2013 by constructing the econometric model. The proposed methods and model can solve the problem of how to quantize the market efficiency in a disequilibrium market, which will sever the purpose for indicating the market status and improving the market operation. The results showed that: during 1998 and 2013, Chinese housing market had been in a state of disequilibrium, and housing market efficiency was high and on the rise, which showed that Chinese macroeconomic regulation against real estate played an important role.

Private and Public Debt Markets in Disequilibrium Theory

In disequilibrium pricing of financial markets, excesses in either public debt or private debt can trigger a financial crisis, with attendant bank panics and recessions. For example, in the Euro crisis beginning in 2010, financial contagion in the sovereign bond market has spread among five nations: Greece, Ireland, Cyprus, Portugal, and Spain. But the reasons for the contagion was initially different for the countries, due to either disequilibrium pricing in public debt markets or disequilibrium pricing in private debt markets. In previous papers, we introduced a time-independent supply-demand model (three-dimensional model) for disequilibrium pricing in financial markets [1] and a steady-state disequilibrium systems model for the run-up of a financial crisis in a public debt market [2]. In this paper we construct a time-dependent disequilibrium systems model for the run-up of financial crises in a private debt market. We analyze the empirical case of the 2010-12 Euro crisis in Spain (private debt crisis) and then compare this to the empirical case of the 2010-2015 Euro crisis in Greece (public debt crisis).

The Optimal Interpretation of Austrian Business Cycle Theory

Abstract Since Hayek’s pioneering work in the 1930s, the Austrian business cycle theory (ABCT) has been presented as a disequilibrium theory populated by less-than-perfectly rational agents. In contrast, we maintain that (1) the Austrian business cycle theory is consistent with rational expectations and (2) the post-boom adjustment process can be understood in an equilibrium framework. Hence, we offer a new interpretation of the existing theory. In doing so, we also address concerns raised with Garrison’s (2001) diagrammatic approach, wherein the economy moves beyond the production possibilities frontier. Our interpretation might accurately be described as a monetary disequilibrium approach grounded in an implicit general equilibrium framework with positive costs of reallocation.

General Equilibrium Theory Behind the Iron Curtain: The Case of Victor Polterovich

In this article we address the story of developments in general equilibrium theory in the Soviet Union during the 1970s through the lens of a single biography. The Soviet advances in mathematical economics give an occasion to reflect on the extension of the Walrasian paradigm to nonmarket societies, as well as on the ideological effects of general equilibrium theory and its interpretations in a Soviet context. Our contribution is focused on the development of general equilibrium theorizing in the work of Victor Meerovich Polterovich (b. 1937), who has been one of the leading figures in mathematical economics and general equilibrium theory in the Soviet Union and post-Soviet Russia. His papers on the abstract models of exchange, dynamic general equilibrium and optimal growth theory, excess demand correspondences, monotonicity of demand functions, and disequilibrium theory were for the most part published in English and gained considerable attention within the field. We reconstruct the political and ideological basis of the general equilibrium concept and show how abstract mathematical models reflected the discursive shift from optimal centralized planning to various forms of decentralization. We argue that the Soviet work on general equilibrium was a part of the global development of mathematical economics but was not integrated into it institutionally.

General Equilibrium Theory in Soviet Economic Science:bibliometric analysis

This paper is the first attempt at quantitative and qualitative analysis of the Soviet literature on general equilibrium theory in 1960-1990s. We divide the papers into four subgroups: von Neumann-Gale class of models and equilibrium growth; Arrow-Debreu class of models; disequilibrium theory; other branches of general equilibrium theory. Bibliometric analysis shows that von Neumann-Gale class of models was the most popular one in the Soviet mathematical economics.

Research about the Disequilibrium Degree of Supplying and Demanding Market for Newly-Built Commodity-Housing from 1998 to 2011 in Xian

Basing on the disequilibrium theory, taking use of SPSS software, taking advantaging of multiple linear regression methodology, this article analyzed the state of supply and demand of newly built commodity-housing market from1998 to 2011 in Xian, constructed the equation about land supply, housing price, load rate and housing-supply, and constructed the equation about per capita disposable income, and housing-demand. Basing on the supply-equation and demand-equation, this article obtained the state of supply and demand of new-built commodity- housing in Xian, at last, calculated the non-equilibrium degree and drew a conclusion.

Spatial Disequilibrium Development and its Policies of Central China: The Case of Hubei Province

Central China is progressively paving its way to the second carrier of Chinese population after the east coastal areas with disequilibrium theory as the guidance of provincial spatial development. Based on ESDA (exploratory spatial data analysis) with statistical data of GDP per capita of Hubei Province by county-level (2000-2010), this paper reveals the spatial differentiation characteristics of economic differences among counties in Hubei Province. According to global analysis of ArcGIS and GeoDA095i, economic space of the county presents the trend of climbing up and then declining. Besides, differences between counties are remarkable. The LISA clean-cut indicates different developed and underdeveloped districts. Finally, contrasting to policy response that the provinces cope with disequilibrium theory in Central China, the results show that the Central China continues to promote disequilibrium development is a reasonable choice, and it’s also indispensible to pay attention to controlling magnification of differences in regional development.

General Equilibrium Theory Behind the Iron Curtain: The Case of Victor Polterovich

In this paper we address the story of developments in general equilibrium theory (GET) in the USSR during the 1970s through the lens of a single biography. The Soviet advances in mathematical economics, only fragmentarily known in the West, give an occasion to reflect on the extension of the Walrasian paradigm to non-market societies, as well as on the ideological effects of GET and its interpretations in a Soviet context. Our contribution is focused on the development of general equilibrium theorizing in the work of Victor Meerovich Polterovich (b. 1937) who has been one of the leading figures in mathematical economics and general equilibrium theory in the USSR and post-Soviet Russia. His papers on the abstract models of exchange, dynamic general equilibrium and optimal growth theory, excess demand correspondences, monotonicity of demand functions, and disequilibrium theory were for the large part published in English and gained considerable attention within the field. We reconstruct the political and ideological basis of the general equilibrium concept and show how abstract mathematical models reflected the discursive shift from optimal centralized planning to various forms of decentralization. We argue that the Soviet work on general equilibrium was a part of the global development of mathematical economics but was not integrated into it institutionally.

Neuropathologies of the self: Clinical and anatomical features

The neuropathologies of the self (NPS) are disorders of the self and identity that occur in association with neuropathology and include perturbations of the bodily, relational, and narrative self. Right, especially medial-frontal and orbitofrontal lesions, are associated with these conditions. The ego disequilibrium theory proposes this brain pathology causes a disturbance of ego boundaries and functions and the emergence of developmentally immature styles of thought, ego functioning, and psychological defenses including denial, projection, splitting, and fantasy that the NPS patient has in common with the child. I hypothesize that during brain development between approximately ages 3 and 7 immature defensive functions and fantasies tend to be replaced by mature defenses and the inhibition of fantasy a process that depends upon maturational processes within the right hemisphere. I propose a four-tiered model of the NPS that emphasizes a multifactorial approach and includes both negative and positive, bottom up and top down, and neuropsychological and psychological factors.

Reduced vagal cardiac control variancein exhausted and high strain job subjects

This paper has two primary objectives. First, the paper proposes methodological strategies for analyzing multiscale vagal cardiac control based on the Stress Disequilibrium Theory (SDT) using high frequency power of heart rate variability (HFP) and short term variance of HFP. Second, the paper provides evidence of reduced vagal cardiac control range and variability in high strain job and exhausted subjects. Job Strain was measured using the Job Content Questionnaire, 8/day diary reports, and a nationally standardized occupational code linkage in 36 healthy mid-aged males with varying strain jobs. Subjects were Holter-monitored for 48 hours, including a work and rest day. Subjects responded to questions on a daily diary as well as on the Job Content Questionnaire to test for exhaustion as a dichotomous state variable. Vagal cardiac control was measured by components of electrocardiograph: heart rate variability based measures of high frequency power (HFP). We assessed range of vagal cardiac control using extreme value analysis (data in upper tail); and short term vagal variability using Poincaré plots of HFP. Comparisons were made between high (N = 10) and low job strain (N = 22) jobs. Furthermore, subjects categorized as exhausted (N = 4) were separately analyzed. Exhausted subjects displayed a reduced range of vagal cardiac control on the workday; and both high strain and exhausted subjects displayed reduced short-term variance in vagal cardiac control. A repeated measures ANOVA controlling for age confirms reductions in variance of cardiac vagal activity in high job strain subjects (0.01), with further reductions in subjects reporting exhaustion (p = 0.001). This analysis supports the hypothesis that (a) job strain is associated with reductions in cardiac vagal - or system level - variance; and (b) that reduced system variability may be a characteristic of exhaustion.

L’approche séquentielle du déséquilibre dans les modèles de stocks et de flux

This article is concerned with those aspects of economic policy that are related to macro disequilibrium theory. Central to it is the way by which time enters the latter theory. Clower's dual hypothesis about Keynesian consumption function did not refer to time at all. Clower, Leijonhufvud and Howitt did introduce time in the so-called shopkeeper model, but they neglected the role of stocks. This article suggests the incorporation of buffer stocks in models of general disequilibrium. The method is the one used to endogenize policy reaction functions. Time and stocks are then the two poles around which a consistent view on quantitative economic policy can be formulated.

Dynamic analysis of the game between land supply and housing prices

A non-linear dynamic game between land supply and housing prices, based on disequilibrium theory and non-linear cobweb mode, is established in this paper. The influence of land price adjustment measures on housing prices is analysed with the assumption that the demand function is non-linear and the supply function is linear. Given a fully inelastic land supply, a land price adjustment parameter and a housing price adjustment parameter are introduced into the non-linear dynamic model. We observe that the evolution of the system varies with the above two parameters. The path leading the system from stability to bifurcation, then to period doubling bifurcation, and finally to chaos is also found. A numerical simulation is provided to demonstrate the dynamic behaviour.

Development Agents And Nomadic Agency : Four Perspectives in the Development “Market”

Discourse between development agents and nomads implies that development for nomadic communities is a contradiction in terms. Two systems, the nomadic and the development system, interact and exist in conflict. Discourses of sedentarization and associative life threaten pastoral adaptive strategies. Within these discourses, a market‐oriented subtext underscores investors' power, brokers' competition, and clients' opportunism. Semistructured and informal interviews focused on relations between Woδaaöe communities, local pastoral organizations, government technical services, and international agencies. This paper examines communication between these parties through approaches of agency, political ecology, and disequilibrium theory. How will the social change instigated by development affect cultural mechanisms that facilitate resource access and allocation? Will development become too costly for pastoral households, local ecology, and even the national economy?.

Disequilibrium Dynamics and Aggregate Excess Demand: On a Homunculus Fallacy in Economic Theory

Modern economic theory is predominantly a theory of equilibrium. The question of how such positions of rest, in which all individual plans and expectations match, come about in larger economies is rarely addressed. The discipline has little more to offer on it than the metaphor of the “invisible hand,” the imposed “law of supply and demand,” which says that the prices of goods and services rise when their demand exceeds their supply and fall otherwise until they are equal, or at best formalizations of such price adjustments, carried out by an auctioneer-like central institution with information on aggregate excess demand. The auctioneer model is hardly convincing as an explanation of the majority of market processes in which no such central coordinator is present. By appealing to an outside entity, an “auctioneer,” with no objectives of its own, existing disequilibrium theory is furthermore at odds with the microfoundations of economics. It presupposes a level of coordination, whereas economics’ original research question is whether and how order arises in an unorchestrated society of people making their own individual plans. Moreover, despite this considerable amount of structure, the approach was able to

Towards a disequilibrium theory of structural dynamics: Goodwin's contribution

In this paper, we reconstruct the complex itinerary towards the solution of a conceptual and mathematical problem, how to obtain growth and fluctuations in a framework where structural change is an endogenous, though intermittent, phenomenon and irregularity a natural dynamic property. This has been Goodwin's life-long research program, driven by the effort of marrying Poincaré's qualitative approach to dynamical systems with the earliest (and some of the later) attempts to formalise economic structure as a set of interacting economic units, i.e. the cells of the modern cellular dynamics. This eventually led him to computational dynamics. Our interpretation integrates the more conventional one that emphasises conceptual connections with the thoughts of Marx, Schumpeter and Keynes. Focussing upon modelling issues of an apparently pure technical nature permits a comparison of Goodwin's evolving views with those that have emerged more recently in dynamics, e.g. in the real business cycle and endogenous theories of growth. In a brief assessment towards the end of the paper, it is argued that while there is still much to be done along the path he chose, Goodwin left enough indications for us to know in which direction to go.

Garrison and the “Keynes Problem”

Time and Money provides a highly effective platform from which to consider macroeconomic theory, and its capacity to service the needs of comparative macroeconomic analysis is an important contribution in its own right. The book will be important for the development of Austrian economics because it identifies important questions and provides sensible answers to the questions it analyzes. Although not discussed at length in these remarks, the framework contained inTime and Money is receptive to the extension of Austrian economics, especially with respect to monetary disequilibrium theory and to comparative institutional analysis. The impetus Garrison’s book provides for the wider acceptance and extension of capital-based macroeconomics will be carried out both at the level of theory and, one hopes, at the empirical level as well.

School Accountability – An Elusive Policy Solution: The Israeli Experience in Comparative Perspective

Politics of accountability theory contends that policymakers are unlikely to adopt external accountability policies. Contrary to the theory, many countries have adopted external school accountability policies, while Israel has not. The disequilibrium theory of policy selection is used to analyze differences among countries in school accountability policymaking. I find that the symbolic potency of policies helps to explain these differences. The symbolic potency of external school accountability depends on the extent to which school performance is perceived as a problem, the degree to which powerful stakeholders are affected by the problem and some broader political and administrative factors. Where client stakeholders are stirred out of their apathy, the education policy subsystem will adopt school accountability policies. However, preliminary evidence reveals implementation obstacles that may render these policies ineffective.