Harald Hagemann

Economics of Networks

This question was raised by some participants when the topic was suggested as a special module for this project. Many economists working in academia, government institutions, and business have reservations about whether this field of economic research really warrants special attention. On the other hand, the number of scientific articles and conferences using network economics as a label to address issues related to actual organizational phenomena and physical networks increased significantly during the 1990s. Since 1997, the German Research Council (DFG) has even been financing an interdisciplinary Special Research Section (SFB) on Networking as a Factor in Competition 3 at the University of Frankfurt/Main. Furthermore, the rapid worldwide growth of the Internet and the dramatic changes accompanying the de- and re-regulation of network industries, which have been subject to the close control of government institutions in most countries, have stimulated debate on applied and practical political topics, as well as a more fundamental theoretical debate within the economic profession. This internal debate addresses the importance of networks as new entities in modern developed economies throughout the world, and the implications of networks for the developing countries wishing to catch up.1 Well-known economists have set up web sites to address this topic as their special research area.2

Internal rate of return

The internal rate of return of an investment project is that discount rate or rate of interest Y which makes the stream of net returns x t associated with the project equal to a present value of zero. It is the solution for i in the following equation in which 6 indicates the physical lifetime of the investment project.

Money, financial institutions and macroeconomics

Introduction A.J. Cohen, et al. Part I: The Theory of a Monetary and Credit Economy. 1. The Uses of the Pure Credit Economy H.-M. Trautwein. 2. Post Keynesian Monetary Theory and the Principle of Effective Demand C. Rogers. 3. Keynesians, New Keynesians and the Loanable Funds Theory M. Messori. 4. The Fisher Effect: Phenomenology, Theory and Policy A. Cottrell. 5. Loanable Funds, Endogenous Money and Minskys Financial Fragility Hypothesis M. Lavoie. Part II: Alternative News on Money and Credit. 6. Keynes and Friedman on Money G. Dostaler. 7. The Role of Credit in Fishers Monetary Economics R.W. Dimand. 8. Henry Dunning Macleod and the Credit Theory of Money N.T. Skaggs. 9. Early Twentieth-Century Heterodox Monetary Thought M. Seccareccia. 10. The Role of Credit in the Mania-Crisis Process B. Spotton. Part III: Monetary Policy Issues in North America. 11. The Institutionalization of Deflationary Monetary Policy T.I. Palley. 12. Monetarism and the United States Economy D.I. Fand. 13. A Fiscal-Monetary Mix-Up D. Laidler. 14. Flying Blind: Recent Federal Reserve Policy L.R. Wray. Part IV: Monetary Policy Issues in Europe. 15. The Problematic Nature of Independent Central Banks P. Arestis, M. Sawyer. 16. Credibility, Reputation, and the Instability of the EMS H.-P. Spahn. 17. Competition and the Future of the European Banking and Financial System V. Chick, S.C. Dow.18. The Monetary Shock of German Unification H.-H. Francke, H. Nitsch. Index.

Solow's 1956 Contribution in the Context of the Harrod-Domar Model

Shortly after World War II growth theory came to occupy a central position in modern economics. Two of the most important early contributions were made by Harrod and Domar. Both aimed to extend Keyness analysis in the General Theory into the long run by considering under what conditions a growing economy could realize full capacity utilization and full employment. Solows neoclassical model came into existence as a reaction to the approaches by Harrod and Domar and some problems associated with it, as in particular the enormous instability. Solow saw the main reason for this “knife-edge” problem in the absence of any adjustment mechanism and based his alternative model on substitution between capital and labor in production and flexibility of factor prices. This article focuses on Solows motivation and the main content of his approach in reaction to Harrod and Domars impulse. Furthermore, focus is on the reactions by Harrod and Domar et al. as well as on the distinction between two different instability problems, namely, the divergence between the warranted and the natural rates of growth that marked Solows starting point, and the divergence between the warranted and the actual rates of growth creating a business-cycle problem.

Dismissal, expulsion, and emigration of German-speaking economists after 1933

The dismissal of academicians from German universities under the Restoration of Civil Service Act (Gesetz zur Wiederherstellung des Berufsbeamtentums), promulgated by the National Socialists on April 7, 1933, and the expulsion of academicians from Germany, Austria, and other European countries interrupted or destroyed promising developments in economics, as well as in physics or other areas. According to this new “law,†which was passed by the Nazis in a short cut immediately after coming to power, “disagreeable†persons could be dislocated from the public service predominantly for racist (section 3) or political (section 4) reasons.

European émigrés and the ‘Americanization’ of economics

Abstract The development of economics since 1945 was marked by an increasing internationalization that was simultaneously in large part a process of Americanization. This article focuses on the role refugee economists from Continental Europe played in the rise of American economics. It focuses on the emigration of German-speaking economists after 1933; and then deals with the special case of Jacob Marschak who emigrated twice, first from the Soviet Union in 1919 and then from Nazi Germany, and exerted a greater influence in Britain and in the USA. Finally important contributions by émigré economists to game theory, public finance and development economics are reflected.

Schumpeter's early contributions on crises theory and business-cycle theory

The article describes Schumpeter’s early contributions on business-cycle theory, particularly his 1910 essay “On the Nature of Economic Crises”, and the evolution of his thought on the issues involved in his Theory of Economic Development over a period of three decades until his Business Cycles (1939). From the very beginning Schumpeter made it clear that his theoretical system is based on the fundamental distinction between statics and dynamics. Therefore his use of the core concepts ‘statics’ and ‘dynamics’ is discussed in greater detail. Comments on the central Wgure of the innovative entrepreneur and the importance of credit for causing cyclical Xuctuations in the economy follow. The paper concludes with Schumpeter’s idea of the business cycle as a superposition of diVerent waves.

Growth theory and growth policy

Part 1. Explaining Endogenous Growth Part 2. Growth and Fluctuations Part 3. Growth and Government Intervention Part 4. Growth and Employment Part 5. The Empirics of Growth

The legacy of Hicks : his contributions to economic analysis

Sir John Hicks made a major contribution to almost every aspect of modern economic theory. His diverse and inventive work has left a huge impression on the discipline. Contributors: Christopher Bliss, Oxford University; John S. Chipman, University of Minnesota; Nicholas Georgescu-Roegen, Vanderbilt University; Richard Goodwin, University of Siena; Frank H. Hahn, Cambridge University; John D. Hey, University of York; Charles M. Kennedy, University of Kent; David Laidler, University of Western Ontario; Axel Leijonhufvud, University of California, Los Angeles; Robin C.O. Matthews, Cambridge University; Michio Morishima, London School of Economics; Kurt W. Rothschild, Vienna; Robin Rowley, McGill University; Roberto Scazzieri, University of Bologna.

Growth, Structural Change, and Employment

The world-wide competition situation has changed dramatically over the past 20 years. The dominating three economies in world trade (United States, EU, Japan) now face growing competition from other regions of the world. Goods, labor, and particularly capital markets are characterized by increasing integration in the ongoing process of globalization. The traditional industrial sectors are no longer able to secure job-enhancing growth. The new information and communications technologies (ICTs) have made it easier to shift production abroad. Moreover, the transformation process in Central and Eastern Europe has made available a greater labor force, without contributing much in the way of modern capital stock, thus changing the relative scarcities of capital and labor.