Neoclassical Theory Research Articles

Assessment of validity of local neoclassical transport theory for studies of electric-field root-transitions in the W7-X stellarator

Abstract The neoclassical ambipolarity condition governing the radial electric field in stellarators can have several solutions, and sudden transitions (in radius) between these can then take place. The radial position and structure of such a transition cannot be determined from local transport theory, and instead a non-rigorous model based on a diffusion equation for the electric field is usually employed for this purpose [1]. We compare global (full plasma volume) drift-kinetic simulations of neoclassical transport in the Wendelstein 7-X stellarator with this model and find significant discrepancies. The position r0 of the transition is not predicted correctly by the diffusion model, but the radial structure of the transition layer is in reasonable agreement if the diffusion coefficient is chosen appropriately. In particular, it should depend on the plasma temperature in the same way as the plateau-regime coefficient of neoclassical transport theory or the gyro-Bohm diffusion coefficient. In the small-gyroradius limit, the prediction of r0 by the diffusion model simplifies to the so-called Maxwell construction [2, 3]. However, this property also emerges from a wide range of other mathematical models in the appropriate limit. The basic assumption underlying these models is that the diffusion, or generalisations thereof, is independent of the radial electric field, which is however unlikely to be the case in practice. Presumably this fact explains the discrepancy between the diffusion model and the drift-kinetic simulations. Finally, it is found that global simulations replicate the phenomenon of spontaneous root transitions driven by variations in the electron-to-ion temperature ratio, as predicted by local theory in the small-gyroradius limit.

A Neoclassical Theory of Labor Exploitation: Some Comments

In this note, we comment on two aspects of the analysis presented in Eswaran’s article “The Nature of Labor’s Vulnerability to Exploitation.” First, we compare Eswaran’s neoclassical views of labor exploitation with the standard Marxian understanding of labor exploitation. Second, we delve deeper into Eswaran’s model and raise a set of questions about his analysis. JEL Classification: P12, J22, B14

Testing the Solow Hypothesis for Fiscal Convergence: a Dynamic Spatial Analysis

The study of regional fiscal convergence is a recent extension of the neoclassical growth theory. Various studies have shown the existence of fiscal convergence across countries or states in federally governed countries. This paper tests the growth theory on income and fiscal variables differently in a centrally ruled country. Therefore, we estimate spatial and non-spatial panel models from 2004 to 2022 for Türkiye. A general-to-specific methodology is applied for selecting an appropriate model to determine spatial interactions of the variables by using the panel data at the level of 81 Turkish provinces. The Ordinary Least Squares (OLS) estimation results from the non-spatial model partially validate the growth theory as the study does not find evidence of absolute convergence for government expenditures. The results, however, confirm the conditional convergence for all variables. The Maximum Likelihood (ML) method is applied for the estimation of the dynamic and static spatial panel models to explain their spatial interactions. The ML findings are consistent with the OLS results. Moreover, unlike direct and total effects, it is not possible to define indirect effects explaining spatial spillover effects in the short and long terms.

Emergence of global value chains as key driver behind industrial development: evidence from participating African countries

Purpose The purpose of this paper is to examine the role of global value chains (GVC) in industrial development of emerging economies, with particular focus on participating African countries. The findings of this study are expected to provide insight on the need for more developing countries to participate in GVC. Design/methodology/approach This study is built upon the neoclassical and endogenous growth theories, which postulate that savings, physical capital and human capital are the fundamental drivers of development in productive sectors of the economy. The investigation, covering the period 1980–2021, is carried out by using the unrestricted error correction model and dynamic ordinary least squares model. Findings The results of this study reveal that GVC stands as the dominant factor driving industrial development, compared to savings, physical capital and human capital. The findings, therefore, seem to contradict the postulation of conventional theories. The policy implications of the findings are not far-fetched. First, industrial development in the participating African countries has benefited largely from GVC; hence, it is necessary to encourage more participation. Second, industrial development also benefited from the control variables (savings, physical capital and human capital), hence the need to sustain their complementary role. Thirdly, only three African countries are actively participating in GVC, which suggests that more countries need to join, to facilitate industrial development. Originality/value Previous studies have not given adequate attention to African countries that participate in GVC, thus creating a void that needs to be filled. This study, therefore, produced results that are relevant to policy-making on industrial development in African countries.

The effects of internal migration on regional convergence: Evidence from Serbia

The paper investigates the effects of internal migration flows on regional convergence in Serbia, a country with large regional disparities, during the period 2000–2018. For this purpose, we implement both the net and the gross (in- and out-) migration approaches. We undertake separate analyses for different categories of the migrant population to explore the impact of migrations involving different levels of human capital. The results show that internal migration flows between NUTS3 units in the observed period mainly fostered divergence, thus contradicting the neoclassical theory. This effect is especially pronounced when considering migrations of the active population and prime-age specialists.

An Analysis of Japan’s Diplomacy towards Israel since Shinzo Abe Era: Based on the Theoretical Framework of Neoclassical Realism

Neoclassical realism theory holds that a nation’s foreign policy is the result of international systemic stimuli intervened by domestic variables. It provides a suitable theoretical framework for analysing the changes of Japan’s foreign policy towards Israel. For a long time after World War II, the relations between Japan and Israel remained cold mainly under the system constraints and its contradictions with domestic variables. However, since Abe’s second term in power, Japan has significantly strengthened its diplomatic relations with Israel. The changes both in the Middle East regional system and the global system have stimulated the adjustment of Japan’s policy while the domestic variables have responded to systemic stimuli actively. Japan’s strengthening of relations with Israel is reflected in several aspects, including high-level political visits, innovative industrial cooperation, and people-to-people cultural diplomacy. On the whole, Japan’s development of relations with Israel serves the interests of both countries and has had a certain impact on the international system. However, there are obvious limitations to Japan’s intensifying diplomacy with Israel.

Foreign Direct Investment and Its Effect on Agricultural Productivity Kenya

Kenya has historically been one of Africa's top destinations for foreign direct investment. Foreign direct investment is critical for Kenya's agricultural sector, offering capital, technology transfer, and skill development that enhance productivity and economic growth. Despite agriculture being a primary economic driver, challenges such as limited capital, outdated farming techniques, and insufficient infrastructure continue to hinder growth. The research explores the contribution of foreign direct investment on agricultural productivity in Kenya as well as to assess the effect of foreign direct investment on the productivity levels of small-scale and large-scale farmers in Kenya for a period 1993 to 2022. Neoclassical growth theory, Endogenous theory were key in guiding the study. This study adapted the causal research design employing time series data from World Bank spanning from years 1993 to 2022. Data was analyzed the data both descriptively and by inferential statistics. The findings of correlational analysis revealed a moderate positive relationships (r= 0.3213) between Foreign direct investment and agricultural productivity. Multiple regression analysis confirmed the significant positive effect of foreign direct investment on agricultural productivity with a coefficient of 0.3661 and p value 0.0014<0.05. This signifies that, in the short term, a 1% increase in foreign direct investment results in a 36.61% rise in the growth of Agricultural productivity, assuming all other variables remain constant. The findings implied that foreign direct investment inflow has the ability to create employment, technological development and improve access to international markets playing a pivotal role in accelerating the agricultural productivity. The Kenyan government should have more effective foreign direct investment strategies to facilitate technology transfer agreements between foreign investors and local agricultural enterprises, additionally, the government should pursue macroeconomic policies that attract foreign direct investment by providing an investor-friendly environment.

How population ageing affects FDI flows: a tale of South Korea

The neoclassical theory predicts that population ageing would reduce net FDI inflows, which would nullify government efforts to attract FDI. There is a complete paucity of literature on the dynamic relation between population ageing and FDI flows for South Korea. This is a distinctive attempt to test the hypothesis that population ageing reduces net FDI flows (% of GDP) in South Korea. The results of the ARDL bounds testing approach to cointegration analysis under structural breaks provide clear evidence of non-linearity between population ageing and net FDI flows (% of GDP). Support for the neoclassical hypothesis is established only in the short-run.

Paradojas dialécticas del modelo de competencia perfecta de la teoría económica neoclásica

Neoclassical economic theory holds, with apparent certainty, that the model of perfect competition is an idealized form of real markets. Although difficult to find, it is of enormous importance as a scientific concept and as a guide to practice. In this article we propose that this statement is partially incorrect. Neither is perfect competition an idealized form of real markets, nor can it serve as an adequate guide for an economic policy on the ordering of markets. Instead, perfect competition and other similar concepts are topological variants of spontaneous order. From the two previous considerations, a set of paradoxes and inconsistencies derive that, however, do not totally invalidate the search for transcendental concepts, if we correctly locate their place in the social sciences.

The Mediating Effect Of Market Liquidity On The Relationship Between Financial Liberalization And Stock Market Returns Among East Africa Community Member Countries

The motivation for this study stems from the critical role of financial markets in economic development and the need to understand the factors influencing stock market performance in the East African Community (EAC) member countries. Financial liberalization, market liquidity, and macroeconomic stability are pivotal in shaping stock market returns. However, empirical studies examining these relationships within the EAC context are limited, prompting this comprehensive analysis. The general objective of this study was to investigate the effect of financial liberalization, market liquidity, and macroeconomic factors on stock market returns among EAC member countries. The study was anchored on the theory of financial liberalization, neoclassical theory, efficient market hypothesis, behavioral finance theory, and the general theory of employment, interest, and money. Data were collected from secondary sources, including financial reports, stock exchange databases, and relevant economic databases, covering the period from 2002 to 2021.The study employed fixed-effects regression models, chosen based on the Hausman specification test, to control for unobserved heterogeneity across countries. Baron and Kenny’s approach was used to test for mediation and moderation effects. The analysis involved examining the direct and, mediating relationships between the key variables. The findings revealed that financial liberalization significantly and positively affects stock market returns. Conversely, market liquidity was found to mediate this relationship, enhancing the positive effects of financial liberalization. The study concludes that financial liberalization is a crucial determinant of stock market performance in the EAC region. Market liquidity plays a significant role in amplifying the benefits of financial liberalization. For policymakers, the study recommends policymakers in EAC should focus on developing infrastructure that supports efficient trading systems. This recommendation is based on the finding that higher market liquidity significantly boosts the positive effects of foreign assets and liabilities on stock market returns

‘The economics of singularities’ by Lucien Karpik: debts and criticisms

This article examines ‘the economics of singularities’ by Lucien Karpik, which is a sociological theory explaining the functioning of markets for a specific type of goods, labeled as ‘singularities’, defined according to three criteria: the plurality of qualities, quality uncertainty and the primacy of quality. According to Lucien Karpik, singularities complement the typology of goods traditionally used by economists, consisting of homogeneous and differentiated goods. He argues that singularities represent a ‘blind spot’ of what he calls ‘neoclassical economic theory.’ According to him, while neoclassical economic theory is adequate for studying homogeneous and differentiated goods, an autonomous framework is indispensable for studying singularities. In this article, we propose a comprehensive overview of the economics of singularities, and we formulate a critique of Karpik’s positioning in relation to neoclassical economic theory.

Neoclassical realism(s) vis-à-vis other theories of foreign policy: taking the indistinguishability problem seriously

Neoclassical realism (NCR)’s opponents have considered it an incoherent and indistinctive approach because of its interest in addressing ideational and institutional factors. Specifically, they have denounced NCR’s fuzzily established internal and external conceptual boundaries, corresponding to central dimensions of this approach’s ‘indistinguishability’ problem. Even though NCR has responded in a sophisticated manner to its critics, such a response still falls short of advancing some subtle strategies to forge NCR’s theoretical identity and research design. To fill this gap, I distinguish several neoclassical realist theories (Types I, II, IIA, IIB and III) to clarify NCR works’ common ground and the several options available to the analyst to cope with the indistinguishability problem’s internal dimension. Furthermore, I compare neoclassical realist theories with organizational, bureaucratic, realist, liberal and constructivist approaches to foreign policy to discuss the indistinguishability problem’s external dimension. Dealing with this dimension entails acknowledging that neoclassical realist theories provide a top-down, as compared to a bottom-up approach to explain foreign policy as a policy rather than a process. It also provides a thorough explanation rather than a parsimonious account aimed at distinguishing independent and intervening variables. With different intensities, neoclassical realist theories embrace specific, refined logics of consequentialism rather than appropriateness to explain distinct state preferences rather than assuming power maximization or security seeking as pre-fixed state goals.

On the limited damp-proofing of residential buildings: do social norms matter?

PurposeThis study draws on neoclassical and behavioural economics theories to provide an empirical insight into the effect of knowledge, costs, and social norms on damp-proofing residential buildings in Ghana.Design/methodology/approachThis study used the quantitative approach involving survey data. A sample size of 242 participants was involved in the study. Applying principal component analysis on the responses from the participants, an index for damp-proofing, cost, knowledge, and social norms was derived. After generating the indexes, the ordinary least squares (OLS) regression was applied to estimate the impact of knowledge, costs, and social norms on damp-proofing.FindingsThe results from the OLS regression revealed that knowledge has a significant positive effect on damp-proofing while costs and social norms have significant negative effect on damp-proofing in Ghana. This study, therefore, concludes that although neoclassical economic factors such as knowledge and cost affect behaviour (damp-proofing), behavioural factors such as social norms also matter.Practical implicationsThe outcome of this study calls for policymakers to consider putting in place measures that increase knowledge and promote the use of damp-proofing techniques during the construction of buildings. In addition, the study calls for scholars to partake in collaborative research amongst disciplines such as economics, psychology, and the construction industry in order to provide more innovative solutions, the key of which is finding innovative ways to damp proof buildings.Originality/valueThis study is original in its context as it draws on neoclassical and behavioural economics theories to provide an empirical insight into the effect of knowledge, costs, and social norms on damp-proofing of residential buildings in Ghana. This is an area that has received less attention in the areas of building biology and building pathology globally.

Performance management in the prosocial market economy: a new paradigm for economic performance and sustainability

Purpose The purpose of this multi-voiced paper is to propose a prosocial paradigm for the field of performance management and management control systems. This new paradigm suggests cultivating prosocial behaviour and prosocial groups in organizations to simultaneously achieve the objectives of economic performance and sustainability. Design/methodology/approach The authors share a common concern about the future of humanity and nature. They challenge the influential assumption of economic man from neoclassical economic theory and build on evolutionary science and the core design principles of prosocial groups to develop a prosocial paradigm. Findings Findings are based on the premise of the prosocial paradigm that self-interested behaviour may outperform prosocial behaviour within a group but that prosocial groups outperform groups dominated by self-interest. The authors explore various dimensions of performance management from the prosocial perspective in the private and public sectors. Research limitations/implications The authors call for theoretical, conceptual and empirical research that explores the prosocial paradigm. They invite any approach, including positivist, interpretive and critical research, as well as those using qualitative, quantitative and interventionist methods. Practical implications This paper offers implications from the prosocial paradigm for practitioners, particularly for executives and managers, policymakers and educators. Originality/value Adoption of the prosocial paradigm in research and practice shapes what the authors call the prosocial market economy. This is an aspired cultural evolution that functions with market competition yet systematically strengthens prosociality as a cultural norm in organizations, markets and society at large.

Neoclassical Gravitational Field Theory

This Neoclassical Gravitational Field Theory offers a potential alternative perspective on the nature of gravity by expanding upon Newton’s classical law of gravitation. It seeks to address fundamental questions, such as why gravity functions as it does and why nothing in the universe can escape its influence. This paper explores some of the long-standing mysteries of gravity, including why masses are multiplied in Newton's gravitational formula and why objects accelerate at the same rate in a local gravitational field, regardless of their structure or composition. By presenting a classical framework, this research aims to provoke discussion and encourage further exploration of alternative explanations for gravity, potentially leading to a deeper understanding of both gravity and the universe itself.

The impact of minimum wage increases on unemployment in the V4 countries: Assessing the recommendations of the European Commission

The European Commission has recently implemented legislative measures to improve worker protection through an adequate minimum wage set by national laws or collective agreements. A recommended benchmark for minimum wage calculation is 60% of the gross median wage or 50% of the mean wage. However, the Kaitz index, a ratio indicator, shows lower values in most EU countries, raising concerns about potential negative impact on the labour market. This study aims to identify the impact of the Kaitz index and several other selected variables on unemployment in the V4 countries. Using multiple linear regression, we concluded that the Kaitz index’s growth does not uniformly impact unemployment in the V4 countries. Specifically, in Slovakia and the Czechia, the Kaitz index growth appeared to increase unemployment, in line with neoclassical economic theory. In contrast, Hungary and Poland did not register significant effects. Gender differences were also noted, with the Kaitz index affecting female unemployment in the Czechia and Hungary, and male unemployment in Slovakia. The research results suggest that increasing the minimum wage in the V4 countries is feasible if its growth rate is higher than that of unemployment benefits and the living minimum, but lower than the average wage growth, and if it is supported by economic growth.

Formation of the prerequisites of the analysis of investment activities to the era of the establishment of the market economy

The paper is devoted to the study of the prerequisites for the development of investment activity analysis before the era of the formation of a market economy in the countries of European civilization. In the 21st century, investment activity has gained particular importance, and understanding the historical aspects of economic relations and accounting practices is crucial for its effective analysis. For this purpose, the paper systematizes and periodizes the stages of development of accounting and economic analysis, starting from the early civilizations up to the end of the 19th century. The research employs a comprehensive set of methods, including dialectical, historical, abstract-logical, methods of induction and deduction, as well as expert evaluation and comparison methods. The application of these methods allowed for the identification of patterns in the development of accounting and economic activity analysis in connection with the evolution of socio-economic relations. Significant attention is given to the analysis of the stages of accounting development, starting from its primitive forms in a natural economy to the emergence of complex accounting and analysis systems in the context of expanding commodity-money relations and the establishment of capitalist relations. The development of economic theory concepts, particularly mercantilism, physiocracy, classical and neoclassical theories, which influenced the formation of approaches to accounting and analysis, is also examined. The research results indicate that the development of investment activity was closely linked with the evolution of economic relations, the growth of production scales, trade, and financial market services. Important prerequisites for the formation of investment analysis included the emergence of the institution of property, the development of commodity-money relations, and the need to account for and analyze capital to manage resources effectively. The paper also systematizes information about the formation of investment analysis, which initially had an empirical nature and, with the development of accounting and economic theory, adopted a systematic approach. This laid the foundation for modern investment analysis, which is an important tool for making managerial decisions in a market economy. Overall, the paper emphasizes the importance of a historical approach to studying the development of accounting and analysis, which allows for a better understanding of modern trends and challenges in the field of investment activity.

Markets and Public Goods: Integrity, Trust, and Climate Change

Public goods are an anomaly in neoclassical economics, a form of ‘market failure’. They exist outside the efficient and equitable optimality of market exchange. It can be shown however that competitive markets are only efficient in short product cycles. Long-term objectives require social support. Corruption arises from the consequent private public interaction. Integrity, the absence of corruption, is a public good. Corruption has risen since the 1980s with privatization and outsourcing. How did European governments become honest in the first place? In the century after the 1770s, they moved from regarding public office as a form of private property to a conception of serving the public good. This integrity revolution was facilitated by Weberian bureaucracies, selected by academic merit and committed to impartiality by long-term incentives. The neoliberal revolution of the 1980s regarded bureaucracies as obstructive and slow. It admired the business corporation with its opaque procedures and charismatic leadership. Concurrently economics moved from neoclassical harmony theory to an asymmetric information model of ‘opportunism with guile’, providing doctrinal legitimacy for corruption. Corporate advertising is deliberately deceptive, and undermines the public good of trustworthiness. Digital platforms, powered by advertising, have subverted public discourse. Misinformation and disinformation have become prime risk factors for current societies. The practical operation of markets undermines the public goods of integrity and trustworthiness. The public good of a habitable climate cannot be achieved by market methods. For long-term payoffs, ‘free markets’ are a harmful delusion, inefficient, corrupt, impossible to achieve, and not sustainable.

Driving Factors Affecting the Migration of Young Nursing Care Professionals from Pokhara in a Globalized World: A Hospital Ethnography

Due to unfulfilled expectations in local health-care industry, the participating nurses working in private hospitals in Pokhara were willing to migrate abroad where their aspirations could be met. The irritation, worry, and unhappiness with their career were revealed by the focused-group discussion, in-depth interview, and kuragraphy methods utilized in this study among young nurses in Pokhara. Some of the nurses had already registered for overseas studies and jobs while still working in hospitals and awaiting their visas. As globalization has stimulated the movement of people, the concept of globalization in association with neo-classical and new economic theory of migration, transnationalism, neoliberalism and world-systems from an anthropological standpoint has been applied to analyze the reasons of participant nurses to migrate where the study found that the main reasons for them to migrate were low pay, an uncertain future, a lack of career opportunities, job pressure, and the trend of out-migration. These competent nurses desired to work in core nations have considered semi-periphery as a secondary option. Through the stories of young nurses, this study exposes the dire condition in Nepal’s health-care industry which is motivating nurses to relocate in destination countries resulting brain-drain.

Cross Country Study of Human Capital Formation and USFDI Inflows

Purpose: The neo-classical theory of economic growth features the positive impact of the human capital of an economy on its growth. The inflow of foreign direct investment is one of the main components to carry forward the growth effect, this study investigates the impact of country-specific institutional quality and human capital on the cross-country variations of US-Foreign Direct Investment (FDI) inflows. Our core hypothesis is that Countries with better Human capital will attract more FDI if they have good quality institutions in terms of less risk in investment opportunities. Method: Using a set of panel data of US-Foreign Direct Investment (FDI) inflows for both developed and developing countries over the period 1984-2021. Result: The country-specific quality of institutions reinforces the impact of human capital on the inflow of US foreign direct investment in this study. Using two-dimensional panel data we find strong support for our hypothesis using a two-way fixed effects model. Our results are robust to the alternative measures of institutional quality. Implications: The strength of our approach is that in contrast to the previous works (1) we have used the USFDI inflow across countries that have been widely neglected in the related literature and (2) emphasis has been given to the conditional or joint impact of human capital and country-specific institutional quality in determining the cross-country variations in USFDI inflows.