Mainstream Economics Research Articles

The Digital Economy as a Complex System

The digital economy is a complex system, but orthodox economic theory is unable to handle such complexity. For some decades economists have realized that the conventional theoretical models are not consistent with data on what people and institutions actually do, and a new behavioral economics is emerging. The science of complex systems developed over the last 50 years has developed many new ideas and methods for analyzing the non-linear non-equilibrium dynamics of complex systems. Responding to the failures of orthodox economics, those managing the global economy are willing and able to embrace and lead in this new way of looking at economic systems. Thus, economics is evolving and better able to inform decision making in the public and private sectors. This offers new ways of sthinking about the digital economy for entrepreneurs and policy makers which in turn will provide many new example of real-world complexity. The digital economy will drive the creation of future wealth and prosperity, co-evolving with the science of complex systems. We postulate that the research in complex systems will enable better understanding of the digital economy, augment existing economic models and improve their prediction powers.

Shocking projections: The rise of the [x-shock] construction complex in macroeconomics

How do economists think and talk about contingency? They express shock, but not in the typical sense of being surprised. In fact, mainstream economists build models in which shocking events are expected variables. An investigation of nominal forms in the [x-shock] construction (e.g., “technology shock,” “supply shock,” or “monetary shock”) among economists reveals a steep increase in the late twentieth century. We report on a large-scale empirical investigation of influential economic textbooks, top economic journals, and US Federal Reserve documents. Each corpus shows a steep rise in the frequency of nominal [x-shock] beginning in the 1980s. This quantitative analysis lays the groundwork for a qualitative analysis of the various uses of [x-shock] among economists from different schools. First, the rise of nominal shock typifies a process of de-subjectification in which shock moves from its more direct experiential uses toward a role of abstract causation. Second, the steep rise in usage coincides with the rise of general equilibrium models in some economic schools of thought. These models assume a particular type of force dynamic logic. In response, other schools invoke a contrasting force dynamic logic. These developments in the [x-shock] construction show not only semantic change but also the disciplinary logics consolidating that change.

Entering the mainstream economy? Workplace segregation and immigrant assimilation

Abstract Why do foreign-born immigrant workers often concentrate in low-wage, minority-dense workplaces? Do immigrants’ native-born children—who typically acquire better language skills, education, and country-specific knowledge—experience improved access to workplaces in the mainstream economy? Using economy-wide linked employer–employee administrative data from Norway, we analyze both ethnic and economic workplace segregation across immigrant generations. We find that, on average, 32% of immigrants’ coworkers and 16% of second-generation immigrants’ coworkers have immigrant backgrounds, compared to 7% for natives. In terms of economic segregation, the average percentile rank of coworkers’ salaries is 36, 49, and 52 for immigrants, children of immigrants, and natives, respectively. A formal decomposition analysis shows that differences in employee, workplace, and residential location characteristics collectively explain 54–74% of ethnic and 79–84% of economic workplace segregation for immigrants and their children. Key factors driving this segregation in both immigrant generations include education, occupational attainment, industry of employment, having an immigrant manager, and the concentration of immigrant neighbors. This suggests that both skill-based sorting and network-related processes contribute to immigrant–native workplace segregation. However, children of immigrants’ improved access to less immigrant-dense and higher-paying workplaces, compared to immigrants, is primarily driven by differential skill-based sorting (i.e., higher education and shifts in occupation and industry placement). Our findings reveal a sharp decline in workplace segregation relative to natives as children of immigrants advance into the mainstream economy, highlighting the central role of assimilation in skill profiles for workplace integration across immigrant generations.

Industrial Policy and Green Growth in a Small Island Economy: The Case of Singapore

Industrial Policy and Green Growth in a Small Island Economy: The Case of Singapore

An Overview of the Current State of Social Ecological Economics Field: A Literature Review

In 2023, the World Economic Forum reported the existence of high-severity global risks in both the short and long term, including climate change, natural disasters and biodiversity loss. In response, Clive L. Spash, a scholar specializing in ecosocial issues, has proposed a paradigm shift that considers the interconnection between ecological, economic, and social challenges, advocating for approaches that go beyond the positivistic approach of orthodox economics. He refers to this approach as Social Ecological Economics (SEE), a school of thought that has received limited attention, evident from the scarcity of publications on the subject. In light of this, the objective of this paper is to provide an overview of the key elements that define Social Ecological Economics as an alternative field within ecological thought. To achieve this, a literature review was conducted, employing open and in vivo coding using Atlas.ti 9 software. The findings identify the core components of Social Ecological Economics, organized into categories such as background, characteristics, dimensions, problems, criticisms, foundations, and proposals. These categories highlight the distinctive identity of this school. As this study is exploratory in nature, a future research agenda is proposed to further examine the relevance of this approach in tackling pressing global issues.

Three Problems of Business Addressed by Stakeholder Theory: Insights from the Institutional Economics of John R. Commons

AbstractStakeholder theory is traditionally motivated by the need to reconceptualize three core problems of business: value creation and trade, the ethics of capitalism, and managerial mindsets. We argue that the need for this reconceptualization arises, in part, from the limitations of mainstream economic theory in grasping the evolving business environment. The original institutional economics of John R. Commons offers an alternative body of economic thought that addresses these limitations by replacing the atomistic individualism of mainstream economics with an ontology grounded in collective action. Drawing on Commons’ insights, we demonstrate how the problem of value creation and trade takes on a new meaning of promoting security of expectations through conflict resolution and the maintenance of order. We further reconstruct the problem of the ethics of capitalism by drawing on Commons’ concept of reasonableness, rooted in evolving community standards of morality. Finally, we trace the problem of managerial mindsets to Commons’ category of industrial goodwill, which suggests that managers can deliberately pursue policies that maximize stakeholders’ collaborative attitudes. We conclude that reconstructing these three problems of business through Commons’ categories reveals the deeper institutional economics content embedded within contemporary stakeholder theory.

The Repo Market and Conflict Inflation

This article seeks to connect today's inflation with one of the least studied and understood creations of the Federal Reserve - the repurchase (repo) market. Despite decades of existence, it is only in the last few years that the repo market has ceased to function smoothly, experiencing first a moment of crisis followed by one of great profitability. When functioning properly, the repo market went virtually unnoticed. Now that it is not, the market has gained the attention of mainstream economics as well as policy makers. However, conventional academic analysis is limited and cannot fully capture the effects that the repo market has had on the overall economy. In this article, we argue that the causes of the pandemic inflation and its public policy response can be understood as the culmination of the longer term currents of globalized financialization and central bank independence. To sharpen our focus on the shorter term, we construct upon the heterodox position of conflict inflation, and argue that the repo market and its principle actors should be considered within the discussion.

The Place of World Economy Research in the Heterodox Analytics of Eurasian Integration

Aim. The article shows the increased productivity of heterodox approaches in the part of economics that studies the problems of the world economy, including regional integration.Methods. Illustrations of the apparent paradoxicity (for representatives of the economic mainstream) of geopolitical and world economic dynamics after 2022 are used to explain the importance of analyzing economic processes in the world economy, taking into account approaches of related social disciplines. The connection of some important scientific results of Russian scholars in the field of economics with the achievements of historians, orientalists and cultural scientists, representatives of economic and political geography and studies of international relations is shown.Results. The article describes the boundaries of the mathematization of the considered segment of heterodox analysis related to the unreliability of world economic statistics, with examples of the successful application of approximate (in a broad sense relative to mathematical terminology) calculations to assess shifts in foreign trade and foreign direct investment in contemporary Russia. The author demonstrates that the heterodox approach reveals the absence of contradiction between Russia’s intensification of Eurasian economic integration (including within the narrow limits of the EAEU) and our country’s efforts to build a more equitable polycentric world order, including strengthening the BRICS format. Greater interdisciplinary transparency for heterodox economists against the background of representatives of the mainstream, among other things, makes it possible to intensify fruitful cooperation between scientists and practical analysts representing analytical centers — think tanks of the post-Soviet space and neighboring countries in the interests of developing integration projects.Conclusions. The proposed methodological framework can enhance the effectiveness of the work of the analytical community of Russia and its friendly countries in obtaining new applied conclusions in the economic sphere, especially in terms of enhancing the effectiveness of integration efforts in Greater Eurasia. At the same time, heterodox economists are more receptive to cooperation with historians, political scientists and other analysts who have focused on Eurasian economic integration.

Failure in Fully Funded Pensions: Voluntary Exchange and Coercion

Private pension failure for much of the economics mainstream would be regarded as an artifact of markets that are insufficiently regulated, such that suppliers are able to exploit monopoly advantages, and are free to make serious errors of judgment. Market failure analysis is flawed, however, by its own failure to acknowledge salient elements of the institutional context of private pension provision, which, while it has been regulated according to approved public interest ends, has been prone to suboptimal investment performance. Drawing on classical liberal political economy, an alternative account of private pension failure would emphasize the perverse consequences of state intrusion in the market for retirement income protection. The origins of regulation failure can be traced back to a combination of two policy decision dynamics, one of intentional rent creation, a second of imperfect knowledge and understanding of markets resulting in flawed regulatory arrangements. By stifling competition, regulation diminishes the capacity of pension markets to serve pension plan participants by means of improved investment performance. The prevalence of private pension failure is an artifact of regulatory intrusiveness. Given this direction of causality, a better approach to policy would rest centrally on the deregulation of pension markets.

Agricultural cooperatives as a means of promoting local economic development in a township in South Africa

ABSTRACT Cooperatives have long been recognized as a collaborative effort by a group of individuals to address their social and economic needs. In South Africa, cooperatives have been adopted to address the triple challenge of poverty, inequality, and unemployment. Drawing on 15 face-to-face interviews with members of agricultural cooperatives in a township in South Africa, this study interrogates the extent to which agricultural cooperative can enhance local economic development and sustain livelihoods. Agricultural cooperatives have been widely supported and promoted as a vehicle for smallholder farmers to directly participate in the mainstream economy of South Africa. The interviews suggest that some cooperatives were found to efficiently sustain livelihoods, and create limited job opportunities in the community. However, challenges like lack of resources, inadequate training, unregulated management, as well as other underlying internal and external shocks are hindering the contribution of the cooperatives to the local economy.

British Public Investment, Government Spending, Housing, and the Industrial Revolution: A Study of Governmental and Social Surplus Absorption

: When it comes to the British Industrial Revolution of the eighteenth century, much of the mainstream economics literature has tended to focus on how property rights, limitations on the crown or government, and changes in production techniques caused a big transformation in the nation’s economy. Marxian and other heterodox economics views acknowledge these developments but also emphasize the enclosure movement and the development of an exploited proletariat. Both sets of views acknowledge the role of the British government in facilitating the revolution, but in doing a review for this article, there is only a small amount of literature on how government investment and spending and the housing of workers may have helped spur the revolution. This is especially true within heterodox schools of thought, and this article aims to add to the heterodox literature by discussing how government investment and investment in housing assisted with surplus absorption during the Industrial Revolution, which in turn helped the British economy to achieve greater heights. Finally, it can be shown that this investment, in turn, would have helped business investment and spending in absorbing as much of the surplus as possible. Strong and sensible uses of government spending matter as much as free market ideology.

From pin money to side hustle: Rural and regional women's side businesses in Australia 1900–2023

AbstractIn the last 15 years, mainstream use of the term ‘side hustle’ has boomed. But the act of having a side hustle is not new; the term's novelty obscures a long‐established pattern of ‘sideline earning’ by Australian rural women, and indeed around the world. Through the lens of environmental, labour and gender history, and using interviews, digital media, diaries, court records, newspaper and magazine articles and other archival records, this research explores how Australian rural women have engaged in and relied on the practice of sideline earning as an economic necessity, long before it entered the mainstream economy and consciousness.

A Simple Physics-Based Model of Growth-Based Economies Dependent on a Finite Resource Base

Mainstream economics describes virtual wealth with theory that is at odds with the physical laws that govern a nation’s physical resources. This confusion fundamentally prevents the realization of “sustainable” economies. The relation between debt and the metabolism of a country (measured by GDP or power consumption) appears to follow a diffusion relationship, in which debt encodes the temporal evolution of an economic potential. Debt enables the production of resources and the realization of a country’s economic wealth potential (the sum of its environmental, geological, and societal endowments, among others). Any economic scheme dependent on finite stocks of free energy for growth must eventually collapse, and as such cannot be considered sustainable. Our simple debt–diffusion model is shown to closely match the trajectories of 44 different economies.

Going collective: worker takeovers, entrepreneurship and collective actions

Over the past two decades, researchers have collected solid evidence on the ability of job-threatened workers around the world to preserve their jobs via takeover operations. Worker takeovers are effective strategies to preserve jobs in times of crisis, spread economic democracy and promote local development. Yet, collectives of workers running their own businesses under self-management challenge the premises of orthodox economics and entrepreneurship. By analysing critical contributions via an integrative literature review, the paper discusses core assumptions of methodological individualism and opportunity entrepreneurship. The paper also uses the case of worker takeovers to further falsify these assumptions and confirm the shortcomings of research approaches anchored to the individual-opportunity nexus. By building on the case of worker takeovers, the paper endorses approaches which adopt (collective) entrepreneurial actions as crucial metrics to analyse entrepreneurial undertakings.

Waqf Business Model (WBM): Towards A Sustainable Social Business Model on The Mainstream Economics

The Waqf Business Model (WBM) represents an innovative and transformative approach to establishing a sustainable social business model within mainstream economics, rooted in Islamic economic principles. This paper explores the current state of waqf as an alternative model for social business, emphasizing its ability to combine social impact with long-term economic sustainability by preserving assets and generating ongoing revenue. It also advocates for integrating WBM into the mainstream economy to serve as a powerful mechanism for addressing the Sustainable Development Goals (SDGs). The paper highlights the challenges faced by traditional Islamic economic institutions, particularly waqf, which have struggled due to outdated management practices and a conceptual crisis regarding the role of waqf in modern economies. Revitalizing waqf institutions requires enhancing their capabilities and aligning them with contemporary business strategies. Additionally, this paper encourages future research to explore how WBM can be fully integrated into the existing economic ecosystem. In theory, WBM provides a framework for ethical and inclusive economies, while in practice, it has the potential to create self-sustaining institutions that reduce reliance on external aid, offering an innovative solution to global socio-economic challenges by blending sustainable innovation.

RESEARCH OF PROCESSES OF TRANSFORMATION OF THE ROLE OF THE STATE IN REGULATING ECONOMIC PROCESSES: LOGICAL-HISTORICAL ANALYSIS

The article aims to analyze the evolution of views on the state's role in regulating economic processes using the methodological approach of combining the historical and logical, constructing an objective process of modifying the economic system and subjectivizing it within the framework of the concepts of mainstream economics. The conditions for the transformation of theoretical views based on the determination of the influence of the basic parameters of the economic system are studied, among which the primary attention is paid to the characteristics of the competitive environment. The dialectic of the evolution of theoretical visions is presented as a transition from the dominance of supporters of market self-regulation (classical political economy) to a significant expansion of the functions of the state with an emphasis on the pluralism of approaches to the recognition of the most effective strategies for the implementation of economic policy with the selection of personalized views on the optimal system of its instrumental content. The logic of forming a two-factor model of macroeconomic regulation of the market economy based on historical relativity is revealed. It is shown that the state's acquisition of the role of a social center is a consequence of the delegation of part of its functions by economic subjects in the pursuit of realizing the interests of both the monopoly sector (it was freed from the need to eliminate the structural disparities created by it), and the non-monopolist sector and consumers (they received guarantees of protection competitive features). The stages in the dominance of liberal doctrines and dirigisme policies in the economic theory and practice of the late 20th - early 21st centuries were studied. The main task of modernizing the content of macroeconomic policy in the conditions of transferring the problems of optimizing the distribution of resources to the supranational level, the erosion of state sovereignty is outlined, which consists of finding individual national trajectories of a combination of integration into global economic structures and justified economic nationalism.

Financializing the Central Highlands: Indebtedness in Everyday Life of the K’ho-Chil Ethnic Communities

Ethnic communities in Vietnam’s Central Highlands as the K’ho-Chil in reality are highly integrated into the economic mainstream. Yet, without preparedness for the bad side of the market mechanism, they are falling into the vicious cycle of debt and poverty. Evidence reveals that indebtedness has shaped everyday life and the financialization process is increasing. From the household lens, the State policies create supportive environments for credit demands while cultural assimilation makes indebtedness emotive and acceptable. Cash crops generate limited incomes while the increase of household consumption has widened the earning-spending gaps. Debts are employed to fill in such gaps but in the long-run have led to the vicious cycle of impoverishment. Better policies need to broaden opportunities for the minority to escape the monopoly of commercial crops while aid packages should redesign to target indebted problems.

Responsible management and the global grand challenges: A social systems perspective

The eight research articles in this edition of BESS examine the empirical and theoretical aspects of social systems and individual behaviours. The issue also initiates a theoretical discourse on the ethical dimensions of economics as a discipline, pointing out how mainstream economics tends to overlook environmental and social concerns. The various articles emphasise unethical conduct among individuals and organisations as a pressing issue. BESS's recent research in management, economics, decision-making, and accounting underscores the need for scholars to research the interplay among managers, organisational behaviours, decision-making processes, and contemporary and systemic social and environmental dilemmas commonly called global grand challenges.

Operation warp speed: Harbinger of American industrial innovation policies

Abstract Operation warp speed (OWS) was a crash effort from 2020 to 2021 to undertake the late-stage development, production, and distribution of vaccines for the coronavirus pandemic. The vaccines were developed, approved, and available in a record time of 8 months using an industrial policy approach. Mainstream economists have long opposed industrial policy approaches as market interference, unless they can be justified by clear market failures. The nation has long had industrial economic policies in such areas as defense, health, transport, and agriculture. However, interventionist policies on the non-defense innovation side of the economy after the research stage have generally been avoided. OWS was a departure, an industrial innovation policy. OWS built a new organization with officials from major health science, regulatory, public health, and research agencies as well as the Defense Department. Elements of its program included: supporting a portfolio of different technology platforms, guaranteed contracts that enable production to evolve alongside development, flexible contracting mechanisms that enabled rapid procurement and intervention into supply chains, rapid technology certification that assured the new vaccines of rapid market entry, mapping supply chains and filling gaps to assure rapid production and distribution, and major product distribution. The elements applied in OWS amount to a new tool kit potentially relevant to other areas, and the USA is now pursuing a series of these in other technology fields.

Lifelong Learning among Students in the Context of COVID-19: A Case Study of the SADC Region

COVID-19 has disrupted the process of teaching and learning across the globe, posing significant challenges to educational institutions worldwide. Some universities in the Southern African Development Community (SADC) region faced difficulties in transitioning to online learning, which adversely affected students' academic progress. The pandemic intensified the existing inequalities in the SADC region, further marginalising students from disadvantaged backgrounds and impeding their access to quality education. However, despite the adverse effects of COVID-19 on traditional contact-based learning, students managed to acquire a new set of skills necessary for navigating the digital age. Moreover, the pandemic presented opportunities for students in the SADC region to develop essential skills for participation in the mainstream economy. This study examines how COVID-19 disrupted students' academic development, and the lessons that students learnt during the pandemic in the SADC countries, with a special focus on South Africa and Zimbabwe. The study concludes by highlighting the interventions adopted by higher education institutions in the SADC region to support students in the context of COVID-19. Methodologically, this study employed secondary data analysis, including policies and existing literature. The findings reveal that students learnt new and innovative ways of studying during the pandemic. This study is underpinned by the self-directed learning theory, which emphasises the importance of self-reliance among students. An important recommendation concerns implementing policies within SADC to promote lifelong learning among students, both during and after COVID-19. In addition, the study proposes that higher education institutions establish tech-innovation hubs on campuses, where students can interact and acquire new skills needed in the digital age.