JournalTOCs

Review of Evolutionary Political Economy
Number of Followers: 0

Hybrid journal (It can contain Open Access articles)
ISSN (Online) 2662-6144
Published by Springer-Verlag

[2469 journals]

Multilevel modelling approach to analysing life course socioeconomic
status and understanding missingness
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  Abstract: This paper investigated the extent to which parental socioeconomic status was associated with life course socioeconomic status heterogeneity between adult cohort members of the 1958 National Child Development Study and how this association differed depending on methods used to address longitudinal missing data. We compared three variants of the full information maximum likelihood approach, namely available case, complete case and partially observed case and two methods designed to compensate for missing at random data, namely multilevel multiple imputation and multiple imputation chained equations. Our results highlighted the important contribution of parental socioeconomic status in explaining the divergence in achieved socioeconomic status over the adult life course, how the available case approach increasingly overestimated socioeconomic attainment as age increased and survey sample size decreased and how the complete case approach downwardly biased the effect of parental socioeconomic status on adult socioeconomic status.
  PubDate: 2022-06-20
Economic insecurity in the family tree and the racial wealth gap
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  Abstract: Much research documents that middle-income households are facing high prevalence of economic insecurity associated with altruistic transfers to relatives in need. The focus of our examination is across and within generations of the same family tree that have grown up in different public policy regimes. Using panel data on U.S. families, we extend the breadth and depth of the work of Chiteji and Hamilton (2002). We find that, compared to their white counterparts, third-generation, middle-income Black families are disproportionately exposed to relatives who face poverty, unemployment, and wealth disparity. Additionally, we find that economic insecurity in the family tree is one of the largest contributors to the Black-White wealth gap.
  PubDate: 2022-06-03
Spatial political economy: the case of metropolitan industrial policy
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  Abstract: Industrial policy has become the focus of much more interest in recent times. Of particular note is mainstream economists’ fascination and their peculiar claims about how and why this new industrial policy promotes growth, redistribution, and sustainability. Such contentions warrant scrutiny. Using metropolitan data, plans, and laws, along with regional and national data from census and survey reports, this paper addresses three questions related to growth, inequality, and sustainability. On the basis of the evidence, collected and interpreted from the lens of original institutional economics, it is argued that industrial policy has been too strictly tied to (urban) economic growth which has not, contrary to expectations, led to ecologically sensitive and inclusive (urban) economic development. Instead, growth policies have cumulatively generated rising urban inequalities and ecological problems in cities and regions. This lack of congruence between the case for, and outcomes from, the pursuit of a particular type of industrial policy can be partly explained by the presence of absentee land ownership. Its entanglements with rent theft, profit seeking, and problematic engagement with persistent inequalities and unsustainability complement the explanation. A different industrial policy could seek to recoup socially-created, but privately appropriated, unearned income, reinvest this resulting revenue in ways that directly build state capacity, address persistent urban inequalities, attend to ecological challenges, and seek to create industries that avoid the problems of ‘progress and poverty’.
  PubDate: 2022-06-01
Crisis and class inequality in Argentina: a new analysis using household
survey data
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  Abstract: This paper explains how the stagnation and crisis in Argentina (2009–2020) reshaped the standard of living of the working class and how their effects are reflected through inequality indexes. Many studies have used quintile stratification for inequality analysis. Following the traditions of Marxian/structural theoretical frameworks, we analyse inequality by defining the different factions within the working class, estimating the Socio Occupational Condition (CSO) from Census Data. This strategy allows us building different strata within the working classes from information on regular surveys. We work with the data from the Permanent Survey of Households (EPH) of Argentina. We use bootstrapping techniques to strengthen our estimations of mean income, too, in order to improve our analysis of the difference between classes and variance’s income estimator. We analyse the evolution of inequality with several generalized entropy indexes. These indexes allow us to describe the composition of inequality between the different classes and within each class. We complement the analysis with macroeconomic estimates of income distribution to include estimates for income appropriation from other social classes. We study how macroeconomic developments and policies during the recent crisis have affected inequality.
  PubDate: 2022-05-30
Thinking out stratification: the concept of subalternity
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  Abstract: The purpose of this article is to show that the concept of subalternity is a good starting point for the study of stratification. This concept had already been used by Gramsci (1992, 1996), Guha (1982), Spivak (1988), and Darity (2020), while I give it a meaning that is both broader and more precise than theirs. For me, subalterns are those who endure structural violence. By definition, this form of violence is not interpersonal in nature, but it is culturally and institutionally embedded. Seen in this way, the concept of subalternity offers four great advantages. First, it enables to delineate the scope of the analysis of stratification. Second, it makes it possible to grasp the state of people deprived of their agency, whatever their situation: poverty, exclusion, inferiority, vulnerability, and so on. Third, it allows for the complexity of stratification to be taken into consideration. Actually, the various forms of stratification are, in most cases, entangled and cannot easily be detached from one another. Finally, since it subsumes the different approaches on the matter, it can serve as a basis for discussion between scholars from various fields and theoretical backgrounds. The perspective of the paper is both conceptual and empirical. Three sets of examples (on the position of women, on the issue of education, and on the position of ethnic minorities) are provided to illustrate its theoretical dimension.
  PubDate: 2022-05-24
Intergroup disparity among student loan borrowers
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  Abstract: This paper uses stratification economics to study intergroup disparities among student loan borrowers. Today, approximately 44 million Americans hold around US $1.7 trillion in student loan debt, with over 20% of borrowers in default. Over one million borrowers fall into default annually. We find that Black and first-generation students have lower college completion rates, default more often on student loan debts, and gain less of a wage premium from their college degrees and graduate degrees compared to white graduates. We also find significant racial and class differences in household wealth generation among college graduates. We use the most recent data from the Federal Reserve Bank of New York’s Consumer Credit Panel and the Survey of Consumer Finances to study the changing size and distribution of student loan debt and default rates based on race and class. What we find is that the student loan debt system creates significant debt traps for many Black and first-generation students.
  PubDate: 2022-05-16
Occupational prestige: American stratification
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  Abstract: The COVID19 pandemic, recession, and now unequal recovery has uncovered what stratification economists have long recognized in the disparate layering of society—growing divergence in social mobility by race, ethnicity, and gender. New research on diminished and stagnating social mobility shows that these large discrepancies began well before the pandemic and have only been exacerbated in the recovery. However, long-run structural factors and the buildup of historic inequities have so far been absent in many of the analyses of the recent pandemic recovery. This paper uses a stratification lens to examine the already present sectoral and occupational divergences. We show that the so-called K-shaped economic recovery is present in more than sectoral differences. Using the American Time Use Survey data, we show, first, the “original K” in terms of the persistent inequality in racial, ethnic, and gender compositions of occupational prestige, measured through the Nam-Powers-Boyd occupational ranking. Then, we present evidence on the unequal recoveries by sector, illustrating preexisting labor market disparities. This paper highlights the systemic forms of racial, ethnic, and gender inequities by looking at the occupational prestige rankings and showing how COVID19 has amplified existing disparities.
  PubDate: 2022-05-12
Collective wealth and group identity: insights from stratification
economics
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  Abstract: Informed by insights drawn from stratification economics and deploying dynamic game theory, we project the long-term outcome of racial/ethnic wealth disparities under multiple policy scenarios. At the core of the analysis is the character of investment individuals make in-group identity. The scenarios involve six regimes where color blindness is the norm, an equal opportunity principle is operative, the equal results principle prevails, strict apartheid is practiced, discrimination on the basis of phenotype is practiced, and a final scenario where reparations on behalf of the subordinate group have been implemented. Utilizing a series of simulation exercises, we explore the long-term outcomes on polarization, racialization, and wealth disparities under the reach of the scenarios.
  PubDate: 2022-04-11
  DOI: 10.1007/s43253-022-00074-7
The sustainability transition and the digital transformation: two
challenges for agent-based macroeconomic models
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  Abstract: Digital transformation and sustainability transition are complex phenomena characterized by fundamental uncertainty. The potential consequences deriving from these processes are the subject of open debates among economists and policy-makers. In this respect, adopting a modeling and simulation approach represents one of the best solutions in order to study potential effects linked to these complex phenomena. Agent-based modeling represents an appropriate paradigm to address complexity. This research aims at showing the potential of the large-scale macroeconomic agent-based model Eurace in order to investigate challenges like sustainability transition and digital transformation. In particular, two different simulation studies, i.e., the digital transformation and the sustainability transition are presented, in order to show the potential of the Eurace model in addressing such kinds of complex phenomena. As regards the digital transformation, the Eurace model is able to capture interesting business dynamics characterizing the so-called increasing returns world and, in case of high rates of digital technological progress, it shows significant technological unemployment. As regards the sustainability transition, it displays a rebound effect on energy savings that compromises efforts to reduce greenhouse gas emissions via electricity efficiency improvements. Furthermore, it shows that a carbon tax could be not sufficient to decouple the economy from carbon consumption and that a feed-in tariff policy fostering renewable energy production growth may be more effective.
  PubDate: 2022-04-01
  DOI: 10.1007/s43253-021-00060-5
The day after tomorrow: financial repercussions of COVID-19 on systemic
risk
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  Abstract: In this paper, we study the financial repercussions of COVID-19 and the effect of anti-epidemic measures on financial markets. By using a composite dataset containing stock market indices of 10 countries characterized by heterogeneous levels of contagion, the daily COVID-19 cases and the 108 more restrictive measures implemented to limit the virus from 31/12/2019 to 13/03/2020, we examine the emergence of financial systemic risk, its speed of propagation and the effectiveness of the policies implemented to curb it. On the one hand, the spread of contagion and its transmission on financial markets are investigated via a lagged cross-correlation analysis. Our results show the emergence of systemic risk characterized by a high speed of diffusion. On the other hand, an augmented AR(1)-EGARCH(1,1) model is applied to examine the impact of anti-COVID-19 “policies on financial markets. We show that, regardless of the level of contagion, the restrictive measures are not able to contain the virus-induced investors panic in the first months of the epidemic.
  PubDate: 2022-04-01
  DOI: 10.1007/s43253-021-00059-y
Distributional effects of technological regime changes: hysteresis,
concentration and inequality dynamics
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  Abstract: In this paper, we study the effect of different types of technological regime changes on the evolution of industry concentration and wage inequality. Using a calibrated agent-based macroeconomic framework, the Eurace@Unibi model, we consider scenarios where the new regime is characterized by a finite time period of more frequent respectively more substantial changes in the frontier technology compared to the old regime. We show that under both scenarios, the regime change leads to an increase in the heterogeneity of productivity in the firm population and to increased market concentration, where effects are much less pronounced if the new regime differs from the old one with respect to the frequency of innovations. If the new regime is characterized by an increase of the size of the frontier jumps along the technological trajectory, the evolution of the wage inequality has an inverted U-shape with a large fraction of workers profiting in the very long run from high wages offered by dominant high-tech firms. Finally, it is shown that (observable) heterogeneity of worker skills plays an important role in generating these dynamic effects of technological regime changes.
  PubDate: 2022-04-01
  DOI: 10.1007/s43253-021-00052-5
Unconventional monetary policies in an agent-based model with
mark-to-market standards
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  Abstract: We employ an agent-based model to shed light on the macroeconomic effects of accounting principles, unconventional monetary policies, and of their possible interactions. If mark-to-market accounting standards may entail positive feedbacks which amplify economic or financial shocks, unconventional policies may introduce negative feedbacks that might dampen instabilities in financial and real markets. For these reasons, we jointly study these two sets of policies by employing a modified version of the Schumpeter meeting Keynes (K+S) macroeconomic agent-based model. Our results confirm that, due to its pro-cyclical nature, the mark-to-market accounting standard amplifies credit cycles, generating more instability with respect to a simulated economy wherein the historical accounting principle is employed. In contrast, unconventional monetary policy is counter-cyclical and it improves macroeconomic indicators. Finally, we study a scenario wherein mark-to-market accounting and unconventional monetary policy interact. We find that unconventional monetary policy can counterbalance the negative effects brought about by the application of mark-to-market accounting. Our results suggest that unconventional monetary policy instruments should not be considered as temporary interventions to be employed only during crisis periods. They should be part of the toolbox of central banks also in normal times.
  PubDate: 2022-03-30
  DOI: 10.1007/s43253-022-00065-8
Why do we need agent-based macroeconomics'
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  Abstract: We are entering the third decade of the twenty-first century with profound uncertainties and crucial challenges for the world economy. Phenomena like climate change, digital transformation, migration, demographic changes, and the ongoing COVID pandemic need to be understood and promptly addressed. We argue that the agent-based approach in economics is well suited to tackle these topics, because of its capacity to integrate the “micro” and “macro” dimensions by modelling the network of interactions among heterogeneous economic agents and their aggregate outcomes. This paper explains why the agent-based methodology is needed to overcome the limitations of the neoclassical approach in economics, which has not been able to properly address those challenges. To do so, the paper retraces the main stages of the scientific evolution in a general historical and epistemological perspective, showing how the paradigm of reductionism, which led to extraordinary advances after the scientific revolution of the seventeenth century, is less effective when addressing the main challenges ahead. On the other hand, the sciences of chaos theory and complex systems can provide the economic discipline with more suitable instruments to face those challenges. Finally, the paper briefly presents the contributions of the special issue, which use applications of agent-based models to study the main problems of our times.
  PubDate: 2022-03-29
  DOI: 10.1007/s43253-022-00071-w
Colorism and employment bias in India: an experimental study in
stratification economics
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  Abstract: In this paper, we examine whether the prevalence of colorism in India can be linked to discrimination in hiring for people with darker skin shades. Colorism or preference for lighter skin tones has a long history primarily linked to colonialism in parts of Asia and Africa. More recently, this preference for lighter skin has become amplified by growing and global whitening product industries dominated by multinational corporations. In India, the industry has tried to link lighter skin to economic success, specifically labor market success. However, the existence of such a link is yet to be explored given the lack of skin tone–specific data in the global context. We implemented an experimental survey design in India to overcome this lack of data. Participants in our study were asked to evaluate job candidates on the basis of unchanging resumes paired with photographs manipulated to vary skin tones. We did not find a statistically significant bias in favor of resumes paired with lighter-skinned photographs. Overall, participants tended to evaluate both lighter-skinned and darker-skinned candidates similarly. Our findings suggest that colorism in India cannot be easily linked to direct instances of hiring discrimination. Differential outcomes due to preference for skin color though might operate in other economic contexts beyond entry into employment. It may also exist in social contexts like marriage and family or health outcomes and in situations where beauty ideals are more relevant. Our findings provide an important counter-narrative to the skin whitening industry’s worrisome efforts to expand their consumer base by linking lighter skin to economic success. Our methodology also provides new directions for future research on colorism, an important new global frontier in stratification economics.
  PubDate: 2022-03-18
  DOI: 10.1007/s43253-022-00073-8
A general theory of social economic stratification: stigmatization,
exclusion, and capability shortfalls
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  Abstract: This paper develops a general theory of social economic stratification based on the interconnection between a specific micro-level mechanism and a broad macro-level process. At the micro-level, it models stigmatization as selective social identity stigmatization; at the macro-level, it explains social exclusion using the club goods concept from the standard goods taxonomy. The paper argues that individuals in disadvantaged social groups, particularly by race and gender, suffer two kinds of capability shortfalls: capability devaluations at the micro-level and capability deficits and the macro-level. These micro-level social identity stigmatization and macro-level social exclusion mutually reinforce and sustain the economy’s overall hierarchical ordering of social groups. The interconnection of these two processes is formally explained using a simple complexity theory analysis from Simon. The two types of capability shortfalls are argued to imply two types of mutually supporting social policies: those combatting discrimination in the case of stigmatization and those advancing social group reparations in the case of social exclusion. Together, they aim at fostering non-hierarchical, pluralist democratic societies which promote individuals’ capability development irrespective of social identity.
  PubDate: 2022-03-10
  DOI: 10.1007/s43253-022-00066-7
From financialization to economic socialization: the meso-economy and the
ethic social capital concepts to change the social order in modern
democracies
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  Abstract: The paper proposes a process called economic socialization as a response to the financialization process of the economy. To do this, the role of social relations guided by cultural elements is proposed as the basis for orienting the economy towards the construction of a relational identity, which is defined, in these pages, as ontological reason. With these purposes, it briefly analyzes the causes and effects of the economic financialization of these times starting with the rise of financial capitalism, as the cause of one of the major current problems, namely the distance/rupture between society and the economy. As part of the process of economic socialization, based on the affirmation of a core of common values that guides the economy and the use of goods and services, the paper proposes concepts such as meso-economics. It is defined as a space made up of intermediate bodies and the State, in which the demand for peoples’ rights is built through the affirmation of cultural elements excluded from economic positivism. We therefore speak of the need to have a minimum necessary nucleus of community values (social ethical capital) that are reflected in goods and services in order to implement the ontological reason and get out of the predominance of individual interests, today legitimized in their maximum expression in the process of financialization of markets almost completely extraneous to the productive economy and social life.
  PubDate: 2022-02-01
  DOI: 10.1007/s43253-022-00068-5
Acknowledgement to the Reviewers of 2021
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  PubDate: 2022-01-31
  DOI: 10.1007/s43253-022-00070-x
Derisking the low-carbon transition: investors’ reaction to climate
policies, decarbonization and distributive effects
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  Abstract: The role of climate finance policies and instruments in scaling up and derisking low-carbon investments has received growing research attention. However, financial actors’ reaction to climate finance initiatives, and their implications on decarbonization of the economy and on inequality, has not been assessed yet. Our manuscript contributes to address this knowledge gap by analysing under which conditions government’s climate finance policies and investors’ climate risk adjustment can affect the success of the low-carbon transition and the ability to close the green investment gap. We further develop the EIRIN Stock-Flow Consistent behavioural model with a financial market, an energy market and investors’ portfolio choice of financial contracts, for the European Union. First, we study the macroeconomic impacts of government’s green subsidies that can be financed either by introducing an unanticipated carbon tax or by issuing green sovereign bonds. Then, we assess how investors adjust firms’ risk assessment in reaction to the carbon tax introduction, and how this affects firms’ low-carbon investment decisions. We find that both a carbon tax and green bonds financing can give rise to trade-offs in terms of decarbonization of the economy (absolute emission reductions), distributive effects and public debt sustainability. The channels of transmission differ and are policy and instrument specific. Green subsidies that are financed by green sovereign bonds issuance generate positive spillovers on GDP growth and less distributive effects than a carbon tax. Nevertheless, due to the relative decoupling of the economy, GDP growth impairs emission reduction efforts. Finally, investors’ climate risk adjustment helps to smooth this trade-off, contributing to a full decoupling.
  PubDate: 2022-01-12
  DOI: 10.1007/s43253-021-00062-3
Endogenous clearinghouse formation in payment networks
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  Abstract: Moving from the historical experience of the Free Banking Era characterizing the US banking system from 1837 to 1863, the purpose of this paper is to investigate the rationale for the endogenous emergence of a clearinghouse, that is, a centralized institution established to manage monetary payments among many economic units. To this end, we propound an agent-based network model suitable for analysing the economic dynamics which develop whenever decentralized agents must decide on the type of payment settlement that they can perform by means of coordinated optimizing behaviours. We test the model for competing settlement modes, different economic scenarios and payment networks. We find that the topology and the density of the payment network influence the choice of agents as much as the interest rate and the probability that the clearinghouse will fail.
  PubDate: 2021-12-21
  DOI: 10.1007/s43253-021-00054-3
Correction to: Financialisation: continuity and change—introduction
to the special issue
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  PubDate: 2021-12-14
  DOI: 10.1007/s43253-021-00063-2