Econ 5602

Eco 5602 Colloquium in Advanced Microeconomics

Fall 2013

Required Texts

  • N. Fligstein, The Architecture of Markets.
  • M. Morgan, The World in the Model
  • F. Lee, Post Keynesian Price Theory
  • Z. Todorova, Money and Households in a Capitalist Economy:  A Gendered Post Keynesian-Institutional Analysis.
  • F. Lee (ed.), Social, Methods, and Microeconomics:  Contributions to Doing Economics Better (on Blackboard)
  • F. Lee (ed.), Social Provisioning, Embeddedness, and Modeling the Economy (on Blackboard)
  • F. Lee (ed.), Markets, Competitions, and the Economy as a Social System (on Blackboard)

Optional Texts:

  • H. Bortis, Institutions, Behaviour and Economic Theory
  • J. K. Moudud, C. Bina, and P. L. Mason, Alternative Theories of Competition

Support Materials:

  • F. S. Lee, The Simple Mathematics of Linear Production Models (on Blackboard)
  • Web sites to help students build their mathematical skills:
  • The Khan Academy: http://www.khanacademy.org/math/algebra
  • Geogrebra: http://www.geogebra.org/cms/

Assessment:

  • From Part I, a set essay of 3,000 words typed.  It is due on September 10, 2013.  It is worth 20% of your final grade.
  •  In-class Exam on September 24, 2013—worth 20% of your final grade
  • From Part II, a set essay of 6,000 words, typed.  It is due on November 19, 2013.  It is worth 30% of your final grade.
  • Final exam worth 30% of your final grade – the exam is on Tuesday December 11, 2013, from 8.00 – 10.00pm

Announcement:

  • Attendance at the Missouri Valley Economics Association conference, October 17-19, 2013—additional information to follow.

Problem Set: It will be distributed and placed on Blackboard.

Course Description:

The course covers heterodox microeconomic theory.  It introduces the student to the historical background and methodology of the theory and then deals with the business enterprise, production and costs, pricing and prices, industry and market, reproduction of the business enterprise, consumer, industrial and government demand, market price and market governance, trade associations,price leadership, government regulation, and the microfoundations of heterodox macroeconomics.  The course will also introduce the student to the heterodox disaggregated price-output model of the economy.

Link for essential information regarding university policies, rules, and resourceshttp://cas.umkc.edu/student-resources.asp

Please refer to the following web page and the linked resources for critical information regarding course policies and resources. You are expected to abide by all the rules and regulations regarding student conduct referenced in these pages.  http://cas.umkc.edu/CPR/

 

LECTURE AND READING OUTLINE

“Well, in our country, “ said Alice, still panting a little, “you’d generally get somewhere else—if you ran very fast for a long time….”  “A slow sort of country!” said the Queen.  “Now here, you see, it takes all the running you can do to keep in the same place.  If you want to get somewhere else, you must run at least twice as fast as that!”

Through the Looking-Glass

I. The Making of Heterodox Microeconomics
A. Heterodox Economics

  1. Lee, F. and Jo, Tae-Hee.  2011.  “Social Surplus Approach and Heterodox Economics.”  Journal of Economic Issues, 45.4:  857 – 75.
  2. Lee, F. S.  1998.  Post Keynesian Price Theory, chs. 1 – 10.
  3. Lee, F. S.  2011.  Social, Methods, and Microeconomics:  Contributions to Doing Economics Better.  Wiley-Blackwell, chs. 1, 2, 8.
  4. Lee, F. S.  2013.  Markets, Competition, and the Economy as a Social System.                                 Wiley-Blackwell, ch. 2.
  5. Bortis, H.  1997.  Institutions, Behaviour and Economic Theory:  A Contribution to Classical-Keynesian Political Economy.  Cambridge: Cambridge University Press, chs. 1, 2, and 5.
  6. Polanyi, K.  1968.  “The Economy as Instituted Process.”  In Primitive, Archaic and Modern Economies:  Essays of Karl Polanyi, pp. 139 – 174.  Edited by G. Dalton.  Garden City:  Doubleday and Co.
  7. Dugger, W. M. 1996. ‘Redefining Economics: from market allocation to social provisioning’, in C. Whalen (ed.) Political Economy for the 21st Century: contemporary views on the trends of economics, 31–43, Armonk: M. E. Sharpe, Inc.
  8. Dobb, M. 1945. Political Economy and Capitalism: Some essays in economic tradition, New York: International Publishers, ch. 1.
  9. Spash, C. L.  2012.  “New Foundations for Ecological Economics.”  Ecological Economics 77:  36-47.

B. Methodology of Heterodox Economics

  1. Lawson, T.  2003.  Reorienting Economics.  London:  Routledge, chs. 1-4, 6,10.
  2. Downward, P.  Applied Economics and the Critical Realist Critique, chs. 5, 6, 7, 9.
  3. Downward, P. and Mearman, A.  2007.  “Retroduction as Mixed-Methods Triangulation in Economic Research:  Reorienting Economics into Social Science.”  Cambridge Journal of Economics 31.1:  77 – 99.
  4. Olsen, W. and Morgan, J.  2005.  ‘A Critical Epistemology of Analytical Statistics:  Addressing the Sceptical Realist,” Journal for the Theory of Social Behaviour, 35.3:  255-84.
  5. Emirbayer, M. and Mische, A.  1998.  “What is Agency?American Journal of Sociology, 103.4:  962-1023.
  6. Morgan, M.  2012. The World in the Model, Cambridge University Press, chs. 1, 3, 4, 6, 10

II. Structure, Agency, and Modeling the Economy

  1. Lee, F. S.  2012.  Social Provisioning, Embeddedness, and Modeling the Economy, Wiley-Blackwell, chs. 1, 5, 6, 8.
  2.  Lee, F. S.  2011.  Social, Methods, and Microeconomics:  Contributions to Doing Economics Better.  Wiley-Blackwell, chs. 3, 5.
  3. De Gregori, T. R.  1987.  “Resources are Not; They Become:  An Institutional Theory.”  Journal of Economic Issues 21.3 (September):  1241 – 1263.
  4. O’Boyle, E. J.  2011.  “The Acting Person:  Social Capital and Sustainable Development.”  Forum for Social Economics 40(1):  79-98.
  5.  Herman, E. S.  1981.  Corporate Control, Corporate Power.  Cambridge:  Cambridge University Press, chs. 1, 2.
  6. Todorova, Z.  2009.  Money and Households in a Capitalist Economy:  A Gendered Post Keynesian-Institutional Analysis.  Cheltenham:  Edward Elgar, chs. 2, 3.
  7. Dean, E. N.  2013.  “Toward a Heterodox Theory of the Business Enterprise:  The Going Concern Model and the US Computer Industry.”  Dissertation.  University of Missouri-Kansas City, ch. 2.

III. The Business Enterprise:  Production, Costs, and Pricing
A. Decision-Making and the Acting Enterprise

  1. Moss, S.  1981.  An Economic Theory of Business Strategy.  New York:  John Wiley and Sons, ch. 2.
  2. Fligstein, N.  1990.  The Transformation of Corporate Control.  Cambridge:  Harvard University Press.

B. Structure of Production and Costs

  1. Lee, F.  1986.  “Post Keynesian View of Average Direct Costs:  A Critical Evaluation of the Theory and the Empirical Evidence.”  Journal of Post Keynesian Economics 8.3 (Spring):  400 – 424.
  2. Dean, J.  1976.  Statistical Cost Estimation.  Bloomington:  Indiana University Press, “Introduction to Part I”.
  3. Scranton, P.  1991.  “Diversity in Diversity:  Flexible Production and American Industrialization, 1880-1930.”  Business History Review 64.1:  27-90.
  4. Abruzzi, A.  1965.  “The Production Process:  Operating Characteristics.” Management Science 11.6, Series B:  B98-B118.
  5. Scazzieri, R.  1983.  “The Production Process:  General Characteristics and Taxonomy.”  Rivista Internazionale di Sciencze Economiche e Commerciali 30.7:  597-611.
  6. Scazzieri, R.  1993.  A Theory of Production:  Tasks, Processes, and Technical Practices.  Oxford:  Clarendon Press.
  7. Morroni, M.  1992.  Production Process and Technical Change.  Cambridge:  Cambridge University Press, parts I and II.
  8. Mir-Artigues, P. and Gonzalez-Calvet, J.  2007.  Funds, Flows, and Time:  An Alternative Approach to the Microeconomic Analysis of Productive Activities.  Berlin:  Springer.

C. Pricing and Prices

  1. Lee, F. S.  1998.  Post Keynesian Price Theory, ch. 11; Appendix A, B.
  2. Downward, Applied Economics and the Critical Realist Critique, ch. 14.
  3. Downward, P.  1999.  Pricing Theory in Post Keynesian Economics:  A Realist Approach,  Cheltenham:  Edward Elgar, chs. 3-8.
  4. Hall, S, Walsh, M., and Yates, A.  2000.  “Are UK Companies’ Prices Sticky?”  Oxford Economic Papers 52.3 (July):  425 – 446.
  5. Downward, P.  2000.  “A Realist Appraisal of Post Keynesian Pricing Theory.”  Cambridge Journal of Economics 24.2 (March):  211 – 224.
  6. Fabiani, S. et. al. 2007.  Pricing Decisions in the Euro Area:  How Firms set Prices and Why. Oxford:  Oxford University Press, parts I and II.
  7. Gu, G. C.  2012.  “Pricing, Price Stability, and Post Keynesian Price Theory.”  Dissertation.  University of Missouri-Kansas City, chs. 2-3.
  8. Melmies, J.  2010.  “New Keynesian versus Post Keynesians on the Theory of Prices.”  Journal of Post Keynesian Economics 32.3:  445 – 65.
  9. Coutts, K. and Norman, N.  2013.  “Post-Keynesian Approaches to Industrial  Pricing:  A Survey and Critique”.

IV. The Business Enterprise:  Investment, Output, and Employment
A. Investment

  1. Lavoie, M., Rochon, L.-P., and Seccareccia, M.  2010.  Money and Macrodynamics, chs. 3, 4
  2. Moss, S.  1981.  An Economic Theory of Business Strategy.  New York:  John Wiley and Sons, chs. 3, 8.
  3. Baddeley, M. C.  2003.  Investment:  Theories and Analysis.  Houndsmills:  Palgrave.
  4. Scheibl, F. and Wood, A.  2005.  “Investment Sequencing in the Brick Industry:  An Application of Grounded Theory.”  Cambridge Journal of Economics 29.2 (March):  223 – 247.

B. Production and Employment

  1. Spencer, D. A.  2011.  “Work is a Four-Letter Word:  The Economics of Work in Historical and Critical Perspective,”  American Journal of Economics and Sociology 70.3:  563-86.

C. Wages, Salaries, and Dividends

  1. Bewley, T. F.  1999.  Why Wages Don’t Fall During a Recession.  Cambridge:  Harvard University Press.
  2. Bewley, T. F.  1998.  “Why Not Cut Pay?”  European Economic Review 42:  459 – 90.
  3. Dickens, W. T. et al.  2007.  “How Wages Change:  Micro Evidence from the International Wage Flexibility Project.”  Journal of Economic Perspectives 21.2:  195 – 214.

D. Theory of the Business Enterprise

  1. Dean, E. N.  2013.  “Toward a Heterodox Theory of the Business Enterprise: The Going Concern Model and the US Computer Industry.”  Dissertation.  University of Missouri-Kansas City, chs. 3-4.
  2. Jo, Tae-Hee and Henry, John F. 2013. “Take the Money and Run: The Business Enterprise in the Age of Money Manager Capitalism.

V. Markets and Demand for the Social Product
A. Market, Industry, and the Social Provisioning Process

  1. Fligstein, N.  1996.  “Markets as Politics:  A Political-Cultural Approach to Market Institutions,” American Sociological Review 61 (August):  656 – 673.
  2. Granovetter, M.  1985.  “Economic Action and Social Structure:  The Problem of Embeddedness,” American Journal of Sociology 91 (November):  481 – 510.
  3. Smelser, N. J. and Swedberg, R. (eds.)  1994.  The Handbook of Economic Sociology.  Princeton:  Princeton University Press, chs. 11 and 15.
  4. Fligstein, The Architecture of Markets, chs. 1, 2, 3, and 4.
  5.  Hermann, A.  2008.  “The Institutional Analysis of the Market.”  International Journal of Green Economics 2.4:  379-391.
  6. Lee, F. S.  2013.  Markets, Competition, and the Economy as a Social System.                                 Wiley-Blackwell, chs. 5,6.

B. Demand for the Social Product

  1. Fuller, C. G.  1996.  “Elements of a Post Keynesian Alternative to ‘Household Production‘”.  Journal of Post Keynesian Economics 18 (Summer):  595 – 607.
  2. Lavoie, M.  1994.  “A Post Keynesian Approach to Consumer Choice.” Journal of Post Keynesian Economics 16 (Summer):  539 – 562.
  3. Lavoie, M.  1992.  Foundations of Post-Keynesian Economic Analysis.  Aldershot:  Edward Elgar, ch. 2
  4. Devetag, M. G.  1999.  “From Utilities to Mental Models:  A Critical Survey on Decision Rules and Cognition in Consumer Choice.”  Industrial and Corporate Change 8.2:  289 – 351.

C. Structure of Market Demand and the Market Price

D. Competition, Market Power, and the Going Market Price

 

VI. Competition, the Market Price, and Market Governance
A. Market Governance:  Controlling Instability Through Regulating Markets

  1. Richardson, G. B.  1965.  “The Theory of Restrictive Trade Practices,” Oxford Economic Papers 17 (November):  432 – 449.
  2. Moss, S.  1981.  An Economic Theory of Business Strategy.  New York:  John Wiley and Sons, ch. 5, 6, 7, and 8.
  3. Clifton, J. A. 1987.  “Competitive Market Process.”  In The New Palgrave Vol. I A to D, pp. 553 – 556.  Edited by J. Eatwell, M. Milgate, and P. Newman.  New York:  Stockton Press.
  4. Grabher, G. (ed.)  1993.  The Embedded Firm.  London:  Routledge, chs. 1 – 2.
  5. Campbell, J., Hollingsworth, J., and Lindberg, L.  (eds.)  1991.  Governance of the American Economy.  Cambridge:  Cambridge University Press, chs. 1, 2, 11, 12.
  6. Lee, F. S.  2013.  Markets, Competition, and the Economy as a Social System.                                 Wiley-Blackwell, chs. 7, 8.
  7.  J. K. Moudud, C. Bina, and P. L. Mason.  2013.  Alternative Theories of Competition.  London:  Routledge, chs. 2, 3, 12.

B. Private Market Governance and the Market Price:  Trade Associations, Price Leadership, and other forms of Private Collective Activities

  1. Howe, M.  1972-73.  “A Study of Trade Association Price Fixing.”  Journal of Industrial Economics 21:  236 – 256.
  2. Smelser, N. J. and Swedberg, R. (eds.)  1994.  The Handbook of Economic Sociology.  Princeton:  Princeton University Press, ch. 18.
  3. Lee, F. S.  2013.  Markets, Competition, and the Economy as a Social System.                                 Wiley-Blackwell, ch. 9.
  4. Levenstein, M. C. and Suslow, V. Y.  2003.  “What Determines Cartel Success?”  Journal of Economic Literature 44.1:  43-95.

C. Public Market Governance and the Market Price:  Laws and Government Regulation

VII. Microeconomics and the Social Provisioning Process
A. Microeconomics and Modeling the Going Economy

  1. Lee, F. S.  2011.  “Heterodox Surplus Approach:  Production, Prices and Value Theory.”
  2. Lee, F. S.  1996.  “Pricing, the Pricing Model and Post-Keynesian Price Theory.”  Review of Political Economy 8 (January):  87 – 99.
  3. Miller, R. E. and Blair, P. D.  2009.   Input-Output Analysis:  Foundations and Extensions.  2nd edition.  Cambridge:  Cambridge University Press, chs. 1-2,4-5,11.
  4. Bortis, H.  1997.  Institutions, Behaviour and Economic Theory:  A Contribution to Classical-Keynesian Political Economy.  Cambridge:  Cambridge University Press, ch. 4.
  5. Bortis, H.  2003.  “Keynes and the Classics:  Notes on the Monetary Theory of Production.”  In Modern Theories of Money, 411 – 474.  Edited by L.-P. Rochon and S. Rossi.  Cheltenham:  Edward Elgar.
  6. Lavoie, M., Rochon, L.-P., and Seccareccia, M.  2010.  Money and Macrodynamics, chs. 1, 2

B. Model of the Going Economy and the Social Provisioning Process

  1. J. K. Moudud, C. Bina, and P. L. Mason.  2013.  Alternative Theories of Competition.  London:  Routledge, ch. 7.
  2. Lee, F. S.  2013.  “Post-Keynesian Price Theory:  From Pricing to Market Governance to the Economy as a Whole.”
  3. Lee, F.  2011.  “Heterodox Microeconomics and the Foundation of Heterodox Macroeconomics.”
  4. Lavoie, M., Rochon, L.-P., and Seccareccia, M.  2010.  Money and Macrodynamics, chs. 3, 4.
  5. Shapiro, N.  1988.  “Market Structure and Economic Growth:  Steindl’s Contribution.” Social Concept 4.2 (June):  72 – 83.
  6. Jo, T.-H.  2007.  “Microfoundations of Effective Demand.”  Dissertation.  University of Missouri-Kansas City, chs. 2-6.
  7. Todorova, Z.  2009.  Money and Households in a Capitalist Economy:  A Gendered Post Keynesian-Institutional Analysis.  Cheltenham:  Edward Elgar, chs. 4,5,6.

VIII. Social Provisioning and Corporate Capitalism

  1. Bortis, H.  1997.  Institutions, Behaviour and Economic Theory:  A Contribution to Classical-Keynesian Political Economy.  Cambridge:  Cambridge University Press, chs. 6 and 7.
  2. Wisman, J. D. and Capehart, K. W.  2010.  “Creative Destruction, Economic Insecurity, Stress, and Epidemic Obesity.”  American Journal of Economics and Sociology, 69.3:  936-982.