"This article provides a formal framework for the analysis of the impact of international migration in the presence of remittances. The discussion differentiates between temporary and permanent migration and between the effects of remittances that raise investment and those that raise consumption spending in the source country. Changes in prices, income distribution and national welfare are examined." The geographic focus is worldwide.
The author, Lauchlin Currie, suggests, in a memorandum written in February 1937, that there should be banking legislation with reference to foreign capital inflows. Gives a series of suggestions as to what might be needed.
Presents a paper written by Lauchlin Currie in January 1991 in which he attempts to demonstrate how lack of precision in the use of terms relating to money and savings can lead to a lack of precision in theories, which in turn leads to errors or misunderstandings in policies. Concludes that an essential step to correct the confusion would be the recognition that the most important portion of means of payment is that which performs a distinct service for which there is a demand, and which entails a cost for which the community is prepared to pay.
Through the sixteenth and seventeenth centuries, European science slowly lifted itself out of the fog of Mediaeval scholasticism. A rational, quantified and mechanised world picture emerged. In 1769 an essay questioned why economics benefited so little from the use of mathematics and quantification. Today the opposite may be argued – the increasing loss of relevance of economics is associated with the use of mathematics. Based on Francis Bacon’s criticism of scholasticism, it is argued here that strong parallels exist between the decay of scholasticism and the decay of modern economics. From being a science of practice, late neoclassical economics has degenerated into “working upon itself”, as Bacon says about late scholasticism. Since the 1769 essay, economics has come “full circle”. The problem for economics is not then mathematics per se – mathematics is just one language in which science may decay.
Describes the development of the Austrian university system 1875-1914. German influence was detrimental to Austrian universities' hopes for improving standards, higher status and autonomy. German scholarship was linked with German nationalism – increasing conflict between German-speaking and non-Germanspeaking institutions in Austria. German scholarship commanded high respect and German universities attracted professors away. University expansion created a market for professors and the Austrian universities were at a disadvantage.
We analyze historical business cycles as a sum of short- and medium-term cycles defined for a particular class of unobserved component models. By associating the trend with the low frequencies of the pseudo-spectrum in the frequency domain, manipulation of the spectral bandwidth will allow us to define subjective trends with specific properties. In this paper, we show how these properties can be exploited to anticipate business cycle turning points, not only historically but also in a true ex-ante exercise. This procedure is applied to US pre-Second World War GNP quarterly data taking as reference the NBER and Romer’s business cycle datings.
Presents the monthly estimates of the Federal Government in the USA from 1932-1937. States that in 1937 the contribution has declined below the levels of the other recent years, reflecting in part a decrease in expenditures but more largely an increase in tax receipts. Investigates how the contribution was measured and its significance. Examines the significance of the 1937 decline in contribution and proposes that there may be a decrement to buying power in the first half of 1938.
Following Clarida and Taylor, the term structure of forward exchange premiums can be interpreted as multiple cointegration vectors, if it is assumed that departures from the risk-neutral efficient markets hypothesis are stationary. This hypothesis is tested using spot rates and one-month and three-month forward rates for six European countries during the 1920s floating rate era. Beginning in late 1924, speculation about a return to gold may have resulted in a non-stationary forward premium. However, except for this speculative period, the term structure of forward premiums was stationary for three currencies. Thus the empirical results presented are broadly consistent with the analysis of Taylor and McMahon, MacDonald and Taylor and Miller and Sutherland.
Presents a memorandum written by Lauchlin Currie and Martin Krost in which they attempt to state and clarify the issues involved in, and to present estimates of the magnitude of Federal income-increasing expenditures.
Presents a memorandum dated March 29, 1935 which was prepared by Lauchlin Currie for Governor Eccles, probably as a basis for a speech. Currie includes a section in which he opposes the right, as under existing law, of the Governor to remain on the Federal Reserve Board if his term of office as Governor is not renewed. He also opposed the removal of the Secretary of the Treasury and the Comptroller of the Currency as ex-officio members of the Board.
Presents an address made by Lauchlin Currie before the Illinois Banking Association in Springfield, Illinois in May 1938. The paper discusses aspects of business and banking developments in 1936 and 1937. Concludes that the developments of 1936 led on the developments of 1937, which in turn are reflected in the present difficulties, and they condition in large part the timing and manner in which they will progress. The paper states that the main problem of making the economic machine function smoothly at near capacity levels, is always with present and its solution will tax economists for many years to come.
Present a paper and an accompanying letter sent to Governor Eccles by Lauchlin Currie, explaining the Tripartite Agreement between Britain, France and the USA and appealing to him to think twice before heeding calls for a return to the gold standard.
Presents a paper by Lauchlin Currie on the stabilization of purchasing power through the use of public credit which was originally delivered at the American Economic Association Meeting at Chicago Distribution of Purchasing Power and Business Fluctuations Round Table on December 30, 1936.
Looks at the excess reserves of 1937 in the USA, which were well over $2 billion. Discusses what criterion can be used to determine the adequacy or excessiveness of the volume of money and what the prospects would be for further expansion if no action were taken. Concludes that on balance, probabilities appear to suggest that further expansion will occur unless checked, and that adequate monetary grounds exist, therefore, for taking action to prevent an injurious expansion of credit.
Examines the economic distribution of demand deposits during 1935 in the USA. Concludes that data on the distribution of money permit a significant advance in the understanding of the factors reflected in changes in income velocity.
Discusses, in a speech given by Lauchlin Currie at the Chicago Forum of the American Institute of Banking on February 24, 1938, behavior of deposits from the viewpoint of an individual banker. Looks at some of the functions and peculiar characteristics of banking which are mainly associated with deposits. Concludes that the more accurately bankers can determine the probable variability of their deposits the more efficiently will they be able to discharge their responsibilities to their stockholders, depositors, localities and the nation at large.
Examines, in a paper written in 1938 by Lauchlin Currie, the banking and monetary system of the USA. Presents the 100 percent reserve plan, its claimed advantages and the objections to it. Concludes that a basic reform in the nature of the 100 percent reserve plan is inevitable.
Academic research in the USA and more recently in the UK and Sweden, has highlighted public capital as a significant growth determinant. Public capital, it is argued, has a positive effect on private sector output, productivity and capital formation. However, controversy surrounds the empirical results emerging from this literature. Much of the controversy rests on research methods employed. Adds to this body of literature in two ways. First, estimates aggregate production functions for private sector output using Irish data. The stock of public capital is included as an input to investigate the effects of government investment on private sector productivity. Second, uses modern time-series techniques to test the hypothesis. Employs the Johansen (1988) cointegration testing procedure and error correction modelling on annual data for the period 1958-1990. These modern techniques produce empirical results which do not support the public capital hypothesis. Suggests several reasons to explain this outcome, and outlines possible policy implications.
Uses a specially constructed data set to present new evidence on the convergence performance of Ireland among European Union (EU) countries at the aggregate, sectoral and industry levels for the period 1960 to 1990. Overall, aggregate convergence occurred among the EU 12 over the period. Ireland did exhibit catch-up on the EU average. However, Ireland’s convergence performance becomes distinctly less favourable if adjustments are made for the increase in net factor outflows during the late 1980s. This is especially the case when gross national product is used instead of gross domestic product (GDP) to measure Irish living standards as this results in a divergent trend emerging. For labour productivity the adjustment of Irish GDP to take account of transfer pricing by multinationals leads to the finding that labour productivity convergence performance in Irish manufacturing is substantially overstated if “official” GDP estimates are used. This translates into more muted convergence performance at the aggregate level if the adjustments are made.
Hourly labor costs in the manufacturing sector of seven EC countries, the USA and Canada are used to test the factor price convergence (FPC) by employing Johansen’s multivariate cointegration tests. We also examine if there is a two-way causality in wages between two groups of countries covered in this study. Both objectives are evaluated by developing error-correction models for Western Europe and North America. Our empirical findings provide support for the FPC and the existence of a long-run equilibrium cointegration relationship among labor costs in manufacturing. The estimation results of error correction models show that a feedback causality exists between manufacturing labor costs in North America and Western Europe.
New evidence is presented on the degree of aggregate and sectoral labour productivity convergence among 11 EU countries between 1970 and 1990. As with studies for other groups of countries, it is found that there is a greater degree of aggregate than sectoral convergence. Aggregate productivity converged at 0.9 percent per annum, with agriculture and manufacturing both diverging and only services converging (0.6 percent p.a.). We contend that structural change provides one explanation for this finding. When measured as changes in sectoral employment shares, structural change accounted for between 50 percent and 66 percent of the overall rate of aggregate productivity convergence among the EU countries over the period. Countries with relatively low levels of aggregate productivity benefited most from structural change.
Purpose – This paper seeks to explore the factors behind the slow growth of economies with abundant oil and gas resources, despite the opportunities these resources potentially represent. Design/methodology/approach – The building blocks of standard economic growth models and the implication of natural resource utilisation is the methodological and analytical approach adopted. A qualitative analysis of the impact of oil and gas activities on the growth of the Nigerian economy is carried out using relevant macroeconomic indicators. Findings – The oil and gas sector is imbued with enormous linkage potentials that can stimulate other sectors to generate endogenous growth. Emphasis on the extraction and export of oil and gas subverts technological progress, stifles the revenue earning potential of the economy and stultifies the effectiveness of factors of production, thereby retarding economic growth. Research limitations/implications – Data on technological input into oil and gas activities could not be obtained, but the changing pattern of productive capacity, especially in the downstream sub-sector, is used as a measure of technological change. Practical implications – Oil- and gas-abundant economies can exploit potential comparative advantage by creating favourable conditions in value-adding oil and gas activities. Through spill-over effects a wide range of economic activities evolves, with concomitant market expansions. Positive externalities for learning-by-doing arising from this process can lead to endogenous technological progress to drive sustainable economic growth. Originality/value – The findings show that rather than reliance on foreign exchange revenues from oil and gas, creating the appropriate conditions for the effective domestic utilisation of oil and gas resources to bolster inter-sectoral linkages is a more virile strategy for oil-and-gas driven economic growth.
The secular transformation in Irish sectoral employment shares, which has been stimulated by the change in focus of both Irish industrial and trade policies, mirrors the significant changes that have occurred in international structures of production. Estimates the contribution of changes in Ireland’s sectoral employment structure to labour productivity convergence between Ireland and the EU average from 1970-1990. Identifies the variation in Irish sectoral employment distribution over time as a significant source of labour productivity convergence. Ireland’s labour productivity convergence was 0.3 per cent per annum higher as a result of shifts in Irish employment distribution than would have occurred without changes in the structure of Irish employment.
Investigates the time series relationship between export earnings instability and instability in receipts from international tourism for Singapore between 1972 and 1988. Computes four standardized instability indexes for both merchandize exports and international travel receipts, having suitably adjusted the official export series for re-exports and corrected the two data series for trend. There is some support for the view that export receipts are more unstable than tourism receipts. Although exports are generally more unstable over the whole period, they were relatively more unstable in the early to mid-1970s during a period of international instability. Tourism receipts, on the other hand, were relatively more unstable in the 1980s, partly as a result of world recession, but also because of structural problems in the tourism industry in Singapore. Also finds that the development of the tourism sector in Singapore has exerted a net destabilizing effect on total exports of goods and services.
In the absence of any theoretical guidance, a solution to the question of what is the appropriate functional form for an import demand model can only be found empirically. Examines this question in the context of UK motor vehicle imports by applying a range of tests of functional form to two, alternatively specified, import demand models: the “traditional” price-income model incorporating the popular but restrictive partial adjustment mechanism and a cost-expenditure model that employs a less restrictive lag structure. Finds, principally that the commonly imposed linear or log-linear functional forms cannot be rejected in relation to the price-income specification, but there is some evidence that neither functional form may be appropriate in relation to the theoretically sounder cost-expenditure model of import demand.
Reconsiders tax reform and economic emancipation of women with respect to public policy formation in The Netherlands. In particular, investigates the attempts of organised interest groups of the Dutch women's liberation movement during the 1980s to influence the public policy process on tax form. The theory of public choice is applied as a theoretical framework for this case study of The Netherlands. The analysis starts with an overview of the issues at stake in the tax reform debate in The Netherlands. Organised women's interest groups have a specific viewpoint on these issues. These viewpoints are expressed in the public policy process by various lobby mechanisms and political arenas in the Dutch political-economic system. The attempts to influence these mechanisms and arenas in favour of women's interests appear to have been rather unsuccessful in the 1980s. The Dutch policy process can be characterised by the so-called “barrier model”. Various barriers in the Dutch policy process offer an explanation for the relative failure of the organised women's interest groups to influence the tax reform process in The Netherlands. This explanation may also be valid for similar cases in other West European countries, where the same issues of tax reform and women's emancipation are at stake and where the public policy process has the same characteristics. Finally, formulates some policy recommendations to overcome the barriers in the public policy process on tax reform.
During the 1980s Latin America’s inflation problem worsened and successive stabilization programmes failed in many countries. This led to an increasing concern about the degree of rigidity imposed on the economy by different labour market structures built up over many decades. Wage indexation, in particular, was often blamed for the failure of stabilization and adjustment programmes. Examines the different components of an indexing system and assesses the degree of flexibility that the systems implemented in some countries brought to the labour market. While a particular indexing system may have the effect of reducing wage flexibility in certain periods, the analysis of data at the macro level shows that in the long term wage indexation has not been insurmountable obstacle. Stresses that wage determination is just one of the key processes with a substantial influence on inflation. In the case of high inflationary countries, the existence of various key prices draw attention to the need for co-ordination in the adjustment of different prices during the application of a stabilization programme.
Investigates the hypothesis of increased financial integration within the European Union (EU) based on an examination of covered and nominal interest rate differentials between March 1979 and August 1992 using cointegration and time-varying parameter econometric techniques. Discovers evidence of increased financial integration from about 1983, although this is not universal for all countries within the EU. In particular the UK seems to have more financial independence, perhaps reflecting its non-membership of the exchange rate mechanism, while Belgium is the country most closely tied to German monetary policy.
Reports an attempt to evaluate the role of industrial policy in affecting entry in Greek manufacturing industry in 1982-1988. Finds that industrial policy favouring the restructuring of Greek manufacturing towards capital-intensive and high technology sectors, affected entrants' numbers but not entrants' total assets. Therefore, proposes that its effect on restructuring is minimal. Finds that other factors influence entry significantly. Gives suggestions for a more effective sectoral policy.
Compares changes in the competitive position of six Dynamic Asian Economies (DAEs) – Singapore, Thailand, Malaysia, Korea, Taiwan and Hong Kong – exporting to the USA, Japan and the European Union (EU) between 1983 and 1995. Dynamic shift-share methods are applied to two digit data for the top five manufactured exports to the USA and the EU, and the top four in the case of Japan. Findings emphasise the magnitude of the structural transformation which occurred over this period as the emerging DAEs such as Malaysia and Thailand became more competitive across a broad range of manufactured goods relative to the older DAEs, while the latter endeavoured to switch into higher value-added manufacturing and services or new markets, or to establish manufacturing facilities overseas as a substitute for exports.
Purpose – The purpose of this paper is to discuss the role of Markovian transitions related to the economic convergence among countries. Thus, the paper aims to develop an overview of several classical approaches, including an analysis of fallacies exposed through the literature. Design/methodology/approach – The number of modes in the distribution of the RGDPL for 100 countries in the period from 1986 to 2000 is calculated. Next, the results obtained from the relevant transition matrices are discussed and the existence of twin peaks in the distribution of income is analyzed. Finally, the adequacy of both Markovian and (time) homogeneity hypotheses in connection with the stochastic process that underlies income distribution is studied. Findings – The results across the period 1986-2000 show the evolution of countries into convergence clubs, instead of the existence of economic convergence. Originality/value – The paper discusses two important issues on the convergence hypothesis. First, the discretization process really matters. If quartiles or quintiles are used the ergodic distribution does not show twin peaks because the process shows an equiprobabilistic ergodic (stationary) distribution in the long term. Second, the twin peaks results need a Markov (time) homogeneous chain as a model for the underlying income process, and then Chapman-Kolmogorov's equation must be satisfied. However, the paper finds empirical evidences of failure in such an argument.
Purpose – The purpose of this paper is to reassess the relative impact of labour market regulation on economic performance. Inflexible labour markets combined with high welfare costs are often thought to be the main cause of low growth in Europe. Design/methodology/approach – This paper compares the impact of labour market regulation to that of macroeconomic policies (such as fiscal policy, monetary policy, macroeconomic cost management) and to that of investment into future growth (such as research, education and the diffusion of technology). We develop for this purpose a highly stylised model explaining economic growth; we suggest a synthetic measure of performance and use data for the US and Europe for the empirical test. Findings – The main result is that regulation impacts on growth, the impact of regulatory change is, however, less easy to demonstrate. The impact of macro economic policy can be demonstrated first by the more growth oriented monetary and fiscal policy in the US and the success of some European countries in bringing private and public costs in line with productivity and tax revenues. However, boosting investment into future growth by encouraging research, education and technology diffusion seems to be the most important determinant of performance. Research limitations/implications – As to the limits of this paper, we have to acknowledge that our analysis refers to a short time period, a small number of countries and uses a highly stylised model. Practical implications – If the results can be replicated for larger data sets and by more elaborated technical methods, the findings have an important policy implication: country strategies relying only on deregulation, without complementary macroeconomic policy and without strategy to boost “growth drivers” are suboptimal. This questions the policy advice given by some economists and economic think tanks, which call for deregulation as main policy strategy and then expect market forces to boost growth quickly and without specific policy measures. Originality/value – The attempt to assess the relative impact of the three policy areas is specific to this paper; most other papers focus on one policy area only.
Although mass privatizations in Slovakia had the same starting point as those in the Czech Republic, mass privatisation in Slovakia led to a different ownership structure, which also partly reflects the different industry structure. Proximately to political decision making of the new management is close and explicit. The new structure lends itself to targeted industrial policy.
Presents a paper written by Lauchlin Currie in November 1992 in which he identifies and defends the concepts of money and the demand for it. The paper argues that the heavy cost of maintaining checking accounts is not reasonably explained by the conventional listing of motivations, especially in the case of large deposits. A new hypothesis is given on the demand for money. The paper concludes that checking accounts possesses the further essential quality of being quantitatively subject to control, which in turn permits a limitation of the total quantity of demand deposits and hence of money.
Purpose – The purpose of this paper is to develop and empirically test the conditions that describe adjustment velocities to reach equilibrium under Cournot's duopoly model. Design/methodology/approach – The paper uses a vector error correction (VEC) framework as the basis for determining and testing adjustment velocities using data about cellphone service in Colombia in the time period from 1995 to 2001. Findings – Empirical evidence suggests the following: first of all, companies operating in the cellphone market behave as cournot's competitors and have constant marginal costs; secondly, cellphone companies operating in the eastern zone of Colombia are in long-term equilibrium; and lastly, equilibrium adjustment velocities are statistically significant. As predicted by theory, in terms of welfare, the existence of equilibrium in Cournot's model implies that cellphone users in the eastern zone of Colombia enjoy a small consumer surplus. Originality/value – Testing the microeconomic implications of the equilibrium dynamics of Cournot's model, using a VEC framework.
Purpose – The purpose of this paper is to focus on links between former “Heilbronn Symposia” on social, economic and political changes, and evolutionary concepts of the nineteenth and early twentieth century to solve the “Social Question” (“S. Qu.”) in Germany. Design/methodology/approach – The approach is based on references to authors of German historical schools, social policy, labor economics and liberal economic policy. The paper supplies a literature review in the area of social policy. It starts from different earlier definitions of the S. Qu. An overview is provided of selected studies of formerly leading German authors, who basically investigated economic and social policies conditioned by the existing economic system. The contents demonstrate different perspectives of the considered authors: Wilhelm Roscher's long-term, even “modern” view of the development of property and wealth; Gustav Schmoller's broad view of economic and social development, demanding a strong state, efficient organizations of entrepreneurs and trade unions; Lujo Brentano's demand of basic institutional changes concerning labor markets and social security by trade unions; authors of different social-economic studies written at the twentieth century, like Leopold von Wiese, Walter Eucken, Gerhard Weisser and Hans Peter Widmaier. Findings – The findings point out: not all of the considered authors applied the same long-term view; all of the authors demonstrated negative social effects of industrialization; authors of the twentieth century pointed out a broader concern of S. Qu. and social policy than former authors. Research limitations/implications – Areas of future research include: a broadening perspective of long-term studies, and an increasing demand for analyses of social disturbances and of effects of social policy on the distribution of life conditions. Originality/value – The comparison of selected authors focusing on their views of the S. Qu. in Germany during the nineteenth and twentieth centuries allows for special conclusions related to the causes, performance and measures to solve or at least reduce the burden of the S. Qu. in the considered economy.
Purpose – The purpose of this paper is to measure the efficiency of UK airlines in light of all the recent industry challenges. Design/methodology/approach – The study measured the technical efficiency of airlines through the innovative data envelopment analysis (DEA) bootstrap methodology. Findings – Results based on a sample of recent input/output data indicated that the efficiency of UK airlines has continuously declined since 2004 to reach a value of 73.39 per cent in 2007. Factors which were found to be significantly and positively related to technical efficiency variations include airline size and load factor. The paper also highlights that factors such as increase in oil price and fierce market competition were also potential inefficiency determinants. Practical implications – The findings of this paper provide a fresh link between airline performance and the current industry characteristics. UK airlines also have a major role in the European and international aviation sector, and thus a reflection on their efficiency could be of interest to private and public policy makers. Originality/value – The paper focuses on a recent period and thus provide a fresh efficiency assessment of the airline industry. The study also extends the limited literature available on UK airlines.
Sketches the history of economic thought regarding the self-expanding growth of investments through the accrual of compound interest. Exercises that calculate such growth in terms of “doubling times” have already been found in Babylonian textbooks from c. 2000?BC. Although compound interest was not permitted to be charged in practice (each loan matured at a given date), investors could keep ploughing back their funds into new loans. Through the ages, this essentially logarithmic principle has described how loan capital grows independently of the ability of debtors (or the economy at large) to pay. It has been expressed by dramatists such as Shakespeare, by novelists, and by eighteenth-century actuaries and economists. Before the contrast between “geometric” and “arithmetic” rates of increase were made famous by Malthus in his description of population growth tendencies, it was formulated with reference to the work on public debt by Richard Price. This principle is incompatible with “equilibrium” theories of self-regulating debt, or ideas that economies can automatically adjust to its growth over time.
Purpose – Based on a sample of foreign-financed manufacturing firms in southern China, the purpose of this paper is to study the effects of ISO certification on productivity. Design/methodology/approach – The paper employs the stochastic frontier approach to estimate frontier efficiency scores at firm level. Findings – The empirical results suggest that the implementation of ISO was able to improve firms' productivity in the form of a wholly disembodied shift of the production frontier. The results further show that there was a mildly positive embodied shift of the production frontier due to the effects of ISO on the marginal product of labor. However, the embodied effects of ISO on the marginal product of capital were not significant. Research limitations/implications – The sample size is small and the data were collected from southern China. A generalization of results to other parts of China should be interpreted with caution. Despite the limited degree of generalization, firms with ISO certifications are suggested to be aware of certain flexibility in the implementation of the ISO documented procedures. Practical implications – The findings of the paper should be of general interest to firms seeking or adopting ISO system or other international standards. Originality/value – The originality of the paper resides in the fact that the empirical work investigates the embodied effects of ISO certification on the marginal product of labor and capital.
The concept of “political correctness” (PC) does not have a clear and simple definition on which there is even a majority, let alone universal, consensus. Nevertheless, during the last decade, and especially in North America, a series of events and positions have emerged to which the term PC is at least partially applicable. I shall begin by alluding to North American PC in institutions of higher education and in scientific organizations, which I have discussed elsewhere in more detail. I suggest that North American PC has crossed the Atlantic and elaborate upon this suggestion by discussing the recent dismissal of a tenured member of the teaching staff by Edinburgh University, and relating this case to the Du¨hring dismissal.
Purpose – The purpose of this paper is to prove that the abolition of state monopoly in the provision of educational services in Continental Europe will result in members of the educational community spending less time towards rent protection and more time towards educational activities, something that should also benefit the consumers of these services. It also aims to prove that once deregulation reform is introduced, those that now fiercely resist to it will, rationally, accept the new status quo and adapt to it. Design/methodology/approach – The paper presents a model in which externalities affect the decision of the community of educational services providers to allocate time among their profession and towards opposing reform and protecting rents that follow from laws that establish state monopolies in the market for education services. The model proposed shows that, in the presence of such externalities, the introduction of reforms that remove the state monopoly will make the educational community adapt to the new status quo by allocating less time to protect monopoly rents and oppose reform, and more time and effort towards educational-related activities like research and publications, high-quality teaching and tutorials, etc. Findings – The prediction of the assumed model that no internal forces can lead to a departure from the unfavorable equilibrium that exists before reform, underlines the need of society to press ahead with reforms regardless of the objections raised by the affected interest communities. Originality/value – The paper provides for the first time in the relevant literature, an analysis of the harms and drawbacks of the higher education state monopoly in Continental Western Europe.
Seeks to define the proper role for mathematics to play in economic theorizing by spelling out its limits. Specifically, has the mathematization of economics contributed to its narrowing of scope since the anti-classical reaction of the 1870s? If so, is mathematics inherently narrow? Or does the modern, and often other-worldly, treatment follow from the particular way in which mathematics has been applied? To describe “bad” mathematical economics, one must state what kinds of problems its formulations tend to exclude. This paper focuses on “equilibrium” analysis that rules out such real-world phenomena as instability and economic polarization, thereby diverting attention from the actual structural problems at work.