Paradigm Of Economic Theory Research Articles

Classical-Keynesian Political Economy, not Neoclassical Economics, is the Economic Theory of the Future

ABSTRACT This article implies that the time is ripe for a new paradigm in economic theory comprising classical (Ricardian) and Keynesian elements of analysis. The central Section Five presents the basic equations of classical-Keynesian political economy, the price and the quantity equation, based on three constitutive principles: the classical labour value and surplus principles and the Keynesian principle of effective demand. Subsequently, two employment mechanisms implied in the super-multiplier relation, the classical-Keynesian quantity equation, are mentioned, the internal and the external employment mechanism. Section Seven provides an analysis of the actual situation on the basis of the external employment mechanism, associated with cumulative processes of increasing disequilibria and inequalities. Given this, it ought to be replaced by the internal employment mechanism, allowing for Keynesian employment and distribution policies (Section Eight). However, the internal mechanism can only be implemented if a new world economic order is brought about, based upon a supranational currency, that is, Keynes's bancor, to ensure balance of current account equilibria worldwide. Section Ten sets forth Keynes's social liberalism, the social philosophy underlying classical-Keynesian political economy, the fundamental social ethical value of which is the Common Good. Social Liberalism thus emerges as the alternative to Capitalism and Socialism.

ECONOMICS OF SUSTAINABLE DEVELOPMENT IN THE THEORY OF SCIENTIFIC REVOLUTIONS BY THOMAS KUHN

The aim of this article is to analyze selected aspects of the theory of sustainable development as a potentially new paradigm in economic theory. The paper presents the concept of the economics of sustainable development in the context of the theory of scientific revolutions developed by Thomas Khun. The study focuses on such issues as externalities and the functioning of the economy in the macrosystem, including society and the environment. Their inclusion in the economics of sustainable development has allowed the assessment of such fundamental aspects as the voluntary nature of transactions or the social effects of running a business from a different perspective. Based on conducted analyses and the review of the literature, it has been noted that the main assumptions of the economics of sustainable development constitute some sort of anomaly, and perhaps even a revolution in relation to classical economics (understood, in this study, as a general theoretical concept that proclaims the reliability of the market mechanism, as well as the convergence of individual interests of producers and consumers with collective interests). In the context of Khun’s concept, it has been pointed out that a possible future paradigm of economics will not constitute so much disapproval of the present one but will make it more comprehensive and will approach economic problems from a different perspective.

First International Lvov Forum

The article is devoted to the analysis of the content and results of the First International Lvov Forum, dedicated to the 90th anniversary of the birth of Academician D. S. Lvov (1930–2007). The forum was held on October 20–21, 2020 at the State University of Management with the support of the Russian Foundation for Basic Research (RFBR), project No. 20-010-22058. Major Russian and foreign scientists, academicians and corresponding members of the Russian Academy of Sciences, leading Russian universities, universities of the Czech Republic, France, Bulgaria and other countries took part in the First Lvov Forum. The Forum discussed fundamental problems of modern Russian and world economic science, including: the problem of the crisis of the paradigm of economic theory; the problem of the relationship between philosophical and economic knowledge; the need to form a new paradigm of economic science; the problem of interaction between society, state and business at the micro, meso and macro levels in the face of modern challenges; place and role of Russia in the world socio-economic system; development strategy of the Russian socio-economic system in the context of the new paradigm of economic science in the context of modern challenges. The discussion of the above fundamental problems was on the basis of a synthesis of the principle of dichotomy and a systematic approach. The First Lvov Forum took a significant place among such major Russian scientific events as the Gaidar Economic Forum, the Krasnoyarsk Economic Forum, the Moscow Economic Forum, etc. due to the relevance of the problems considered at the Forum, the novelty of the methods proposed for their solution. The ideas of Russian and foreign scientists presented at the Forum can be used for the further development of modern economic theory, as well as for the development of programs for the development of the Russian economy at the micro, meso and macro levels.

The Landscape of Auto-Bidding Auctions: Value Versus Utility Maximization

Internet advertisers are increasingly adopting automated bidders to buy advertising opportunities. Automated bidders simplify the procurement process by allowing advertisers to specify their goals and then bidding on their behalf in the auctions that are used to sell advertising slots. One popular goal adopted by advertisers is to maximize their clicks (or conversions) subject to a return on spend (RoS) constraint, which imposes that the ratio of total value to total spend is greater than a target ratio specified by the advertisers. The emergence of automated bidders brings into question whether the standard mechanisms used to sell ads are still effective in this new landscape. Thus motivated, in this paper we study the problem of characterizing optimal mechanisms for selling an item to one of multiple agents with return on spend constraints when either the values or target ratios are private. We consider two objectives for the agents: value maximization, which is becoming the prevalent objective in advertising markets, and utility maximization, which is the de facto paradigm in economic theory. Our goal is to understand the impact of the agents' private information and their objectives on the seller's revenue, and determine whether the first-best revenue, which is the optimal revenue when all the private information is public, is achievable. We show that first-best revenue is achievable for value-maximizing buyers when either the target ratio or the values are private, but not when both are private. In the case of utility-maximizing buyers, first-best is never achievable and we characterize revenue-maximizing mechanisms.

Bunge’s Causality and the Laws of Economics

This paper deals with the analysis of the nature of economic relations from the perspective of Mario Bunge’s idea of causality. According to Bunge, causality cannot be regarded as the universal connection of phenomena. The application of Bunge’s concept to economics leads to the development of the hypothesis of the non-causal determination of economic phenomena. The contradiction between the non-causal nature of economic phenomena and the dominant causal paradigm in economic theory are shown and discussed. The hypothesis of non-causal determinations allows to explain an ongoing argument between monetarists and Keynesians, the viability of the different schools of economic thought, the existence of the radical criticism of neoclassical economics, the isolation of economic theory from applied economic disciplines.

Bunge’s Causality and the Laws of Economics

This paper deals with the analysis of the nature of economic relations from the perspective of Mario Bunge’s idea of causality. According to Bunge, causality cannot be regarded as the universal connection of phenomena. The application of Bunge’s concept to economics leads to the development of the hypothesis of the non-causal determination of economic phenomena. The contradiction between the non-causal nature of economic phenomena and the dominant causal paradigm in economic theory are shown and discussed. The hypothesis of non-causal determinations allows to explain an ongoing argument between monetarists and Keynesians, the viability of the different schools of economic thought, the existence of the radical criticism of neoclassical economics, the isolation of economic theory from applied economic disciplines.

(Причинность по Бунге и законы экономики) Bunge’s Causality and the Laws of Economics

Russian Abstract: Статья посвящена природе экономических связей и опирается на концепцию причинности Марио Бунге. Суть концепции Бунге в том, что причинность только одна из форм детерминации связей. Приложение концепции Бунге приводит к гипотезе о непричинных детерминациях в экономике (взаимодействие, целенаправленное действие, стохастическая, структурная и диалектическая детерминации). Выявляется и обсуждается противоречие между непричинным характером экономических связей и причинной парадигмой экономической теории. Гипотеза о непричинных детерминациях объясняет бесконечные споры между монетаристами и кейнсианцами, живучесть экономических «школ», существование радикальной критики неоклассики, обособленность экономической теории от прикладных дисциплин. Ключевые слова: философия науки, причинность, непричинные детерминации, причинный и непричинный закон, детерминации и законы экономики English Abstract: This paper deals with the analysis of the nature of economic relations from the perspective of Mario Bunge’s idea of causality. According to Bunge, causality cannot be regarded as the universal connection of phenomena. The application of Bunge’s concept to economics leads to the development of the hypothesis of non-causal determinations economic phenomena. The contradiction between the non-causal nature of economic phenomena and the dominant causal paradigm in economic theory is formulated and discussed. The hypothesis of non-causal determinations allows explaining an ongoing argument between monetarists and Keynesians, the viability of the different schools of economic thought, the existence of the radical criticism of neoclassical economics, the isolation of economic theory from applied economic disciplines.

Екологізація економічних систем як визначальна домінанта парадигмальних змін в економічній теорії ХХІ століття

На основі дослідження економічної та екологічної діяльності на початку третього тисячоліття в умовах значного посилення об'єктивних процесів екологізації сучасних економічних систем доведено необхідність переосмислення і перегляду багатьох вже застарілих методологічних положень економічної теорії, її поняттєвого апарату. Загострення проблеми взаємин людини і довкілля зумовило утвердження в економічній теорії екологічної парадигми, яка передбачає розгляд усіх економічних і соціальних процесів крізь призму збереження довкілля, умов існування і розвитку людської особистості. Наголошено, що сучасні підручники з економічної теорії недостатньо враховують екологічний імператив, бо необхідно досліджувати поведінку людей у процесі виробництва, розподілу і споживання матеріальних благ та послуг не просто в умовах обмежених ресурсів, а уже в нових умовах – умовах загострення екологічної кризи глобального, регіонального і локального характеру. Розкрито інституційні засади екологізації сучасних економічних систем з позицій постіндустріальної парадигми та економічної компаративістики в умовах посилення глобалізації. Виявлено зміст екологічної парадигми економічної теорії та обґрунтовано необхідність виокремлення соціально-екологічних відносин у системі економічних відносин суспільства. Наголошено на важливості формування сучасної екологічної культури у процесі трансформації економічних систем, коли в її основі мають бути орієнтованість на екологічну доцільність і безпеку, відсутність протиставлення людини і природи. Запропоновано авторське трактування процесу екологізації сучасних економічних систем в умовах посилення глобалізації, переходу людства до суспільства знань та "зеленої економіки". Під екологізацією економічних систем пропонуємо розуміти посилення екологічної спрямованості економічних систем у процесі їх трансформації, що виявляється у становленні сучасної економічної та екологічної свідомості і культури, екологічної відповідальності, утвердженні сучасних екологічних цінностей, формуванні відповідної нормативно-правової, інституційної бази, спрямованої на суспільний контроль за системою зв'язків "людина – економіка – екологія", застосуванні санкцій і стимулів щодо впливу економічної системи на стан екологічної рівноваги в умовах обмеженості природних ресурсів та загострення екологічної кризи глобального, регіонального і локального характеру. Екологізацію економічних систем є об'єктивним процесом їх трансформації, домінантою трансформації на зламі тисячоліть, що утверджує усвідомлення екологічних проблем як глобальних. Екологізація економічних систем розглядають сьогодні як дуже важливий, навіть визначальний, критерій порівняльного аналізу національних систем чи наднаціональних системних утворень. Запропоноване поняття "екологізація економічних систем", на наше переконання, не тільки заповнить відповідну прогалину в економічній теорії, а й дасть змогу повністю врахувати екологічний контекст дослідження і порівняння економічних систем на порозі третього тисячоліття, відобразить вплив практики на зміну застарілих теоретичних концепцій. Саме екологізація економічних систем і є сьогодні об'єктивною визначальною домінантою парадигмальних змін в економічній теорії ХХІ ст.

Екологізація економічних систем як пріоритет їх трансформації у ХХІ столітті

Розкрито інституційні засади екологізації сучасних економічних систем з позицій постіндустріальної парадигми та економічної компаративістики в умовах посилення глобалізації. Наведено зміст екологічної парадигми економічної теорії та обґрунтовано потреба виокремлення соціально-екологічних відносин у системі економічних відносин суспільства. Підкреслено важливість формування сучасної екологічної культури у процесі трансформації економічних систем, коли в її основі мають бути орієнтованість на екологічну доцільність і безпеку, відсутність протиставлення людини і природи. Запропоновано авторське трактування процесу екологізації сучасних економічних систем в умовах посилення глобалізації, переходу людства до суспільства знань та "зеленої економіки". Під екологізацією економічних систем пропонуємо розуміти посилення екологічної спрямованості економічних систем у процесі їх трансформації, що виявляється у становленні сучасної економічної та екологічної свідомості і культури, екологічної відповідальності, утвердженні сучасних екологічних цінностей, формуванні відповідної нормативно-правової, інституційної бази, спрямованої на суспільний контроль за системою зв'язків "людина – економіка – екологія", застосуванні санкцій і стимулів щодо впливу економічної системи на стан екологічної рівноваги в умовах обмеженості природних ресурсів та посилення екологічної кризи глобального, регіонального і локального характеру. Екологізація економічних систем є об'єктивним процесом їх трансформації, домінантою трансформації на зламі тисячоліть, що утверджує усвідомлення екологічних проблем як глобальних. Екологізацію економічних систем розглядають сьогодні як дуже важливий, навіть визначальний, критерій порівняльного аналізу національних систем чи наднаціональних системних утворень. Запропоноване поняття "екологізація економічних систем", на наше переконання, не тільки заповнює відповідну прогалину в економічній теорії, а й дає змогу повністю врахувати екологічний контекст дослідження і порівняння економічних систем на порозі третього тисячоліття.

PUBLIC ADMINISTRATION OF ECONOMIC DEVELOPMENT IN THE CONTEXT OF THE INSTITUTIONAL THEORY

One of the priorities of socio-economic reform in Ukraine is the modernization of the structure of the national economy and its growth. An effective structure of the economy, which will correspond to a socially oriented model of economic growth and will be based on the use of both the country’s competitive advantages in the global division of labour and the economic benefits of cooperation, will guarantee the independence of any country and will be the key to its dynamic development. The development of economic theory is due to the emergence of fundamentally new ideas, sustainable accumulation of knowledge, intellectual and meaningful updating of established concepts and theories, the formation of new scientific schools. A new paradigm of economic theory should explain the real processes in real economies, which operate on the principles of complex systems of synergistic nature and the theory of nonlinear dynamics. There is a process of theoretical polystructuredness both of mainstream and heterodoxy. An important task is to form an interdisciplinary dialogue between economists and scientists, which stipulates the relevance of the research topic. The subject of the study is the theoretical and methodological foundations and approaches to state management of economic development in the context of the institutional theory. The purpose of the study is to determine the role and influence of public administration of the development of the economy in the context of institutional theory and to develop strategic goals of the state’s innovation policy. Methodology. Directions of correlation of the system of economic development of the country and the potential of the state development with the historical preconditions for the emergence and development of the institutional doctrine of economic theory are investigated. Based on the revealed interrelations, the necessity of using instruments of institutionalism for studying the economic development system is substantiated. The state, in all available ways, should encourage economic actors to develop and implement innovations, thereby creating favourable conditions for innovative and technological development of production, saturation of the domestic market with highly competitive goods and services, which, in turn, will strengthen export potential, fill the budgets of all levels, increase incomes of business entities, reduce unemployment and improve working conditions, increase social security of the population, and also strengthen the positive image of public administration and local self-government bodies. That is, the socio-economic development of the country depends directly on the innovation-technological potential and on the efficiency of public administration in its development at all levels of the economy. Conclusions. The author generalizes the theoretical and methodological foundations of the country’s development in the context of the institutional theory: the system of economic development of the state has a set of direct and indirect links with the historical background of the emergence and development of an institutional doctrine of economic theory; the revealed directions of correlation contribute to the formation of a scientific and methodological basis for further study of economic development and economic potential of a country (state) in the context of the institutional doctrine of economic theory in its relation to the public administration theory; the economic development of a country (state) depends on the institutional environment, in which it operates, and is both an object of its influence and a subject that determines its transformation. The author investigates the theoretical principles of state regulation of innovative and technological development of the country’s economy. The existing strategies and programs of innovative development and innovation activity in Ukraine are explored. The state of innovation and technology of the national economy and the potential of key sectors of the economy in terms of innovative development are analysed.

Склонность к методологии

The article is dedicated to the memory of an outstanding scholar and economist, Nikolai Tsagolov, the 110 anniversary of his birth. Special emphasis is paid to the role of methodology in the development of a new paradigm of economic theory and methodological seminar as an essential tool for processing theorists’ factual material, which was effectively used by N. Tsagolov. The article describes the structure of the methodological seminar for many years operating at the department of political economy of the Economics faculty of Moscow State University. The author emphasizes the collective nature of scientific work aimed at rational organization of labor. Attention is also drawn to the risks inherent in the widespread use of methodological techniques as well as the issues which require the attention of social theorists.

СОЦІАЛІЗАЦІЯ ЕКОНОМІКИ ЯК НОВА ПАРАДИГМА ЕКОНОМІЧНОЇ ТЕОРІЇ

The article outlines the necessity of redefining the economic theory’s paradigm under the circumstances of current global socio-economic crisis. Consumer Society Theory based on the approaches of neoclassic mainstream has proven its deficiency. That prompts the development of new paradigm in economic theory. The interests of different social layers in the society should be consolidated according to social vector. Socialization of economy could alleviate the problem of economic inequality, enhance social and economic welfare. It could help to manage socio-labor relationship in a more efficient way, lessen social risks and frequency of conflicts; reduce income gaps. It would also increase motivation of labor force and competitiveness of the economy in general. Socialization of economy would help to make well-being of people and their personal development as a main target of production activity.

ECONOMIC APPROACHES TO IMPROVE THE COMPETITIVENESS OF UKRAINIAN TRANSPORT ENTERPRISES ( THE EXAMPLE OF CIVIL AVIATION)

The purpose of reforming the air transport in Ukraine is the implementation of market economic transformations in economic and financial methods of the management of civil aviation operational firms, which were still formed on the basis of Soviet plan-army management principles. The author suggests the mechanism of formation of financial supply paradigm for reformed air transport firm because these reformations are to be carried out when the elaborated optimal economic-legal, investment-innovation, and (what is the most important) organizational-financial complex unified methodical principles of the interaction of air transport (АТ) subjects are absent (which becomes clear in the course of re-structuring them). Vital problems of formation of investment-innovation re-structuring mechanism for functioning the air transport firms are described in this article. New results of subsequent scientific research concerning financial scheme development of enterprising and commercial activities of airlines in today’s economic stabilization and growth, formation of new paradigm of economic theory and reformation of managing practice are suggested to the participants of the Conference in the course of prolonging the author’s discussion; a possible approach to the solution of financing problems for their re-structuring by means of creating new aviationtransport consortia is also suggested. The aim of creating a new consortium is to improve the economic efficiency of activity of airlines, their competitiveness in internal markets of transport services as well as to reform the system of air transport subjects in Ukraine. This is one of the complex trends for solving the problems of creating national air carrier, the organization of optimal forms and methods of financial schemes formation for measures aimed at improving the competitiveness.

New Informational-behavioral Paradigm: The End of the Theory of Equilibrium or Its Second Wind?

The authors analyze the informational paradigm in economic theory. The article introduces and develops a concept of information consistency; the authors apply this concept to the analysis of labor market, credit market, etc. Moreover, they suggest that the microeconomic conclusions be extended to the macroeconomic level. So they introduce a concept of a favorable type of macrodynamics and describe macroeconomic features of economy with respect to the information consistency of certain markets. The authors come to the conclusion that the informational paradigm serves as a good supplement to the traditional equilibrium theory.

Professor Samuelson on Sraffa and the classical economists

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.

Bioeconomics as economics from a Darwinian perspective

Bioeconomics—the merging of views from biology and economics—on the one hand invites the 'export' of situational logic and sophisticated optimization developed in economics into biology. On the other hand, human economic activity and its evolution, not least over the past few centuries, may be considered an instance for fruitfully applying ideas from evolutionary biology and Darwinian theory. The latter perspective is taken in the present paper. Three different aspects are discussed in detail. First, the Darwinian revolution provides an example of a paradigm shift which contrasts most significantly with the 'subjectivist revolution' that took place at about the same time in economics. Since many of the features of the paradigmatic change that were introduced into the sciences by Darwinism may be desirable for economics as well, the question is explored whether the Darwinian revolution can be a model for introducing a new paradigm in economic theory. Second, the success of Darwinism and its view of evolution have induced economists who are interested in an evolutionary approach in economics to borrow, more or less extensively, concepts and tools from Darwinian theory. Particularly prominent are constructions based on analogies to the theory of natural selection. Because several objections to such analogy constructions can be raised, generalization rather than analogy is advocated here as a research strategy. This means to search for abstract features which all evolutionary theories have in common. Third, the question of what a Darwinian world view might mean for assessing long term economic evolution is discussed. Such a view, it is argued, can provide a point of departure for reinterpreting the hedonistic approach to economic change and development. On the basis of such an interpretation bioeconomics may not only go beyond the optimization-cum-equilibrium paradigm currently prevailing in economics. It may also mean adding substantial qualifications to the subjectivism the neoclassical economists, at the turn of the century, were proud to establish in the course of their scientific revolution.

The natural rate moves! A review essay of Edmund Phelps' structural slumps

This review essay of Edmund Phelps' Structural Slumps.The Modern Equilibrium Theory of Unemployment, Interest and Assets argues thatStructural Slumps is an important book, which enriches neoclassical economics and has substantive things to say about the persistence of high unemployment rates in many industrial countries. However, the book does not substantiate Phelps' own claims that the structural approach represents a new paradigm in economic theory and that the new paradigm is the only convincing explanation for persistently high levels of unemployment. With respect to the first claim it is argued that the structuralist approach is not fundamentally different from neo-classical macroeconomics. With respect to the second claim it is illustrated that the empirical evidence is inconclusive as far as the alleged superiority of the structuralist approach is concerned.

Trade deficits: A look beyond the economic view

That the United States faces a “crisis situation” regarding the state of its trade deficit is a matter that has been widely proclaimed by several reputable economists, policy makers, and the public at large. In this paper, we analyze the etiology of this crisis situation and indicate that within the paradigm of economic theory, trade deficits constitute a “no-problem” situation. The paper argues that to explain the origin of the “crisis dimension” that has been ascribed to this situation, one is required to step outside the received economic view and look toward fields of inquiry like psychology and politics. It is shown that moralistic and/or political arguments are the primary cause of the current perception of the crisis situation. Standard economic theories provide, at best, minor perturbations to these central moralistic and political themes. It is argued that it is unlikely that current economic theory can be adjusted to provide useful results by incorporating these political and moralistic issues as “added variables,” because the proper inclusion of such issues would challenge the basic axioms on which the edifice of modern-day economics is built.