This paper explores the evolution of Kornai’s thought on general equilibrium theory (GET) and his position on mainstream economics. Three moments in this evolution will be highlighted, starting by his rejection of GET and advocating disequilibrium in Anti-Equilibrium (1971). While Kornai does not treat the “equilibrium paradigm” as irrelevant, he suggests an alternative paradigm, namely economic systems theory that he further develops in the 1980s as “system paradigm”. Economics of Shortage (1980) marks a second phase in which Kornai distinguishes Walrasian equilibrium from normal state or Marshallian equilibrium. In this phase, he supports Marshallian equilibrium rather than disequilibrium. Finally, By Force of Thought (2006) is a critical self-appraisal in which Kornai considers Anti-Equilibrium as a “failure” and acknowledges GET as a benchmark of an ideal competitive market. He now advocates a Walrasian equilibrium as an abstract reference model, but refuses to consider this model as a description of reality. In this sense, he rejects the New Classical economics. Paradoxically, however, his original heterodox concept of “soft budget constraint”, irreconcilable with standard microeconomics, has been integrated into new microeconomics as an optimal intertemporal strategy of a maximizing agent in the absence of credible commitments. It will be argued that Kornai’s so-called failure is rather related to his half-in, half-out mainstream position, while his institutionalist system paradigm is still a heterodox research project of the future.
Authors:Konstantinos Spinthiropoulos, Christos Nikas, and Eleni Zafeiriou
results of the DF-GLS test, we are confident that this is exactly the situation that was designed for the ARDL model simulation. Applying the unit root test for the first differences of each series has led us to the rejection of the zero hypothesis
given government cycle based on the data of the National Election Office. Later, I expanded the analysis to explore the reasons for rejection, as they are not indicated in the government resolutions: it is attempted to verify whether the financial
Hansen – Seo (2002) is employed and results support the threshold dependent cointegration between the variables under consideration. Test statistic amounts 18.17896 with corresponding P -value of 0.03 indicating the rejection of the null hypothesis in
rely heavily on researcher's intuitions in gathering knowledge about target systems, we are forced to conclude again that wholesale rejection of deduction would result in a disjointed body of contentious knowledge. But suppose that a lot of intuitive
In this article we carry out a time-series analysis on monthly HUF-EUR exchange rate data using both the Engle-Granger and Johansen methodology in order to find evidence for Purchasing Power and Uncovered Interest Rate Parities. Our results confirm that the producer price indices and the exchange rates are co-integrated with two co-integration vectors. Unlike the bulk of empirical literature that finds a quite sluggish adjustment of exchange rates, our estimate of the half-life from the Hungarian data is around 5 months only. Additionally, we find that when both PPP and UIP are included in the model, we cannot reject the hypotheses of proportionality and symmetry at 10%, while rejection is possible at 5%.
Ever since Goldin (1995) proposed the idea that there is a U-shaped female labor force participation rate function in economic development, empirical research is stunned by the question why the countries of the Middle East and North Africa (MENA) are characterized by such low rates of female labor force participation. This gap in labor economics research is all the more perplexing since gender equality, particularly in education and employment, significantly contributes to economic growth. The research strategy of this paper is within a relatively new tradition in labor market research, initiated by Besamusca et al. (2015), which does not exclude the “religious factor” and what the authors call “gender ideology”. Our analysis of the “gender ideology” of Islamism and gender values is based on an empirical analysis of World Values Survey data. In recent economic theory, Carvalho (2013) maintained that Muslim veiling is a strategy for integration, enabling women to take up outside economic opportunities while preserving their reputation within the community. The empirical data clearly support a pessimistic view. We show that Muslim Feminism, which according to our analysis implies the rejection of Islamism and the veil, and the democracy movement in the Muslim world, are closely interrelated. Thus, it is imperative that Western Feminism develops solidarity with Muslim Feminism, and that labor economics stop excluding the religious factor from the analytical frameworks explaining low female labor force participation rates.
, varying in the range 20–38%, to 10% proportional rate. However, the fiscal role of the personal income taxation (around 3% of GDP) did not change, due to the redistribution of the tax burden. Rejection of the nontaxable minimum income enhanced the taxable