David Dequech

Neoclassical, mainstream, orthodox, and heterodox economics

This paper discusses the concepts of neoclassical, mainstream, orthodox, and heterodox economics, distinguishing temporally more general and more specific concepts. The concept of mainstream economics is based on prestige and influence and includes ideas taught in prestigious schools. Although the current mainstream (neoclassical economics included) is clearly diverse, commonality in it is more controversial. Heterodox economics can be defined negatively, in opposition either to the orthodoxy or to the mainstream. The lack of consensus generates communication problems. Another possibility would be to define heterodox economics positively, but the result in the current period may be an empty set.

Conventional and unconventional behavior under uncertainty

When discussing the relation between rationality and conventions under non-neoclassical uncertainty, almost all economists focus on the rationality of following a convention. This paper contributes to the construction of an alternative approach, which argues that conventions and rationality are compatible but reasonable behavior may be conventional or (partly) unconventional. The paper reviews several arguments for the reasonableness of following a convention. It then stresses the importance of factors such as creativity and an optimistic disposition to face uncertainty (animal spirits) and shows how these factors are crucial for determining whether behavior will be conventional or not.

Uncertainty: A Typology and Refinements of Existing Concepts

The present article proposes a typology of the main varieties of uncertainty considered by economists and refines existing concepts. This typology combines three distinctions, between: substantive and procedural uncertainty; weak and strong uncertainty; and ambiguity and fundamental uncertainty. These concepts refer, or fail to refer, to factors such as: a lack of information; complexity; the (im)possibility of building probability distributions that are unique, additive and reliable; structural change; etc. When refining these concepts, the article pays special attention to the conception of social reality underlying each concept. It refers to what each concept may imply about the complexity and changeability of social reality and the limitations and creative potential of the individuals that inhabit this reality, in addition to, in some cases, the roles of institutions and the features of the process of technological change.

Economic institutions: explanations for conformity and room for deviation

Why do economic agents conform with existing institutions? Drawing on economics and organizational institutionalism, this article identifies existing explanations, extends or refines some of them, suggests new ones, classifies these various explanations, and integrates them into an organized framework. One set of explanations focuses on conformity out of habit. The other refers to more conscious thought and behavior and considers coordination and increasing returns to adoption, social sanctions, informational differences, uncertainty, legitimacy, naturality, and lack of power/resources to deviate. (This abstract was borrowed from another version of this item.)

Financial conventions in Keynes's theory: the stock exchange

This paper examines Keyness treatment of financial conventions, focusing on the stock exchange. It shows that Keyness approach was unclear but insightful. Some elements are combined here to clarify his implicit concept, which incorporated features of a general concept (social sharing, conformity with the conformity of others, and arbitrariness) with specific characteristics in financial contexts. The paper identifies a peculiar sense in which the speculator is unconventional. It contrasts the potentially short duration of Keyness financial convention with the widespread idea that informal institutions change very slowly. Finally, it discusses the relation between convention, self-interest, and decision-theoretic and social norms.

Post Keynesianism, Heterodoxy and Mainstream Economics

After briefly presenting the concepts of orthodox, mainstream and heterodox economics, and applying them to the contemporary period, this article discusses the Post Keynesian school and its relation to contemporary orthodox and mainstream economics. While opposed to the neoclassical orthodoxy, the Post Keynesian school has some positive unifying ideas, although some internal tensions remain. There are also some overlaps between Post Keynesianism and other approaches, and a careful combination of contributions from different approaches and different disciplines is not only possible, but also necessary. Post Keynesianism is located outside current mainstream economics, although this argument partly depends on a more precise specification of the concept of uncertainty. The non-mainstream character of Post Keynesian economics has at least two types of important implications. The first involves the approachs ability to influence the economy and the danger of ‘the scholastic fallacy’; the second refers to a reproductive difficulty inside academia.

The Institutions of Economics: A First Approximation

Institutions are socially shared systems of rules of behavior or thought. This article considers the institutions of economics from a theoretical perspective, applying to economics itself ideas that have been used to study institutions in the economy and other domains. The institutions of economics are not often treated as such, but deserve attention not only because they impact the discipline, but also because they interact with economic reality, including institutions in the economy. Particularly important are the mental models socially shared by academic economists. Conformity with these institutions and their sharing can be explained by various social factors, such as the perception of legitimacy or naturality, sanctions, uncertainty, increasing returns to adoption, informational differences, lack of power, and habits. A conventional model is adopted, at least in part, because other agents adopt it, and it is arbitrary in the sense that a non-inferior alternative to it is conceivable. An epistemic social norm implies possible sanctions and may be internalized as legitimate. Despite the profound cognitive and motivational influence of a disciplines institutions, together with other conservative forces, cases of non-conformity do occur and promote change. Prestigious academics are often successful innovators.

Logics of Action, Provisioning Domains, and Institutions: Provisioning Institutional Logics

This article proposes a synthetic new concept of logics of action, intending to apply it to the market, the family, and the polity (inclusive of the state and the community) as crucial instances of what may be termed provisioning domains. These are the broadest or most general domains in which economic activities take place. This article defines a logic of action as a set of socially shared rules of thought and behavior (i.e., socially shared mental models and behavioral rules) that involve a domain of action, the metric used, and the objectives or obligations associated with the positions people occupy in this domain. The domain by itself does not suffice to characterize a logic, and it has to be combined with the other two aspects. The article further discusses the relation between logics of action and institutions, arguing that logics of action are institutions with specific characteristics. They are conceived in relation to very broad provisioning domains and, as such, they have a high degree of generality. The market, the family, and the civic logics may be called provisioning institutional logics, but important differences do exist between the proposed concept herein and some treatments of institutional logics.

Is money a convention and/or a creature of the state? the convention of acceptability, the state, contracts, and taxes

This article begins by presenting the idea of money as a convention, first in the economics of conventions and then in post Keynesian economics, also examining whether and how one can reconcile money as a convention with Keyness essential properties of money. The article then considers the view of money as a creature of the state, in two versions, which connect money to contracts or to taxes, respectively. Finally, it further explores the monetary foundations of a market economy, the conventional foundation of money, and the role of the state. Acknowledging that money is ultimately or fundamentally a convention requires recognizing limits to the states ability to impose its money on the private agents. At the same time, the state is usually in a much better position than any private agent to influence the process through which the convention of acceptability of money emerges and is reproduced. A stronger proposition is that without state money there would be no stable money in a market economy. Both the fundamental conventionality of money and the essential role of the state can be thus emphasized.

Instituições e a relação entre economia e sociologia

This article discusses the relation between economics and sociology, highlighting institutions among other social objects of study. The article points out several difficulties in distinguishing economics from sociology when the latter studies economic issues. Separating economics and economic sociology by defining each of them in terms of an approach does not work because there are different approaches within each, as well as similarities across these disciplines. It is better to define economics and sociology in terms of a broad subject matter, but this does not imply separating them, because the economic is social and, in particular, institutional. Institutions are inside the economy and inside economic agents themselves, influencing their motivations and cognition. On the other hand, one can distinguish some practices of economists and economic sociologists. Anyway, the most important distinction is one between approaches and not one between disciplines.