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"The General Theory of Employment, Interest and Money" J. M. Keynes: Background, Methodology and Specific Interpretations

"The General Theory of Employment, Interest and Money" J. M. Keynes: Background, Methodology and Specific Interpretations

Journal of Institutional studies, , Vol. 8 (no. 1),

The paper was prepared for the 80-th anniversary of publishing of John Maynard Keynes’ “General Theory of Employment, Interest and Money”. It discusses the stages of the economist’s life, the main books written prior to "The General Theory ...". Particular attention is devoted to the development issues of the monetary policy in the works of "Indian Currency and Finance", ”A Tract on Monetary Reform” and "A Treatise on Money". A special section is dedicated to the analysis of Keynes’ methodology, its logic and structure, influenced by John. E. Moore. The paper reveals the unity and the difference in approaches of A. Marshall and John M. Keynes, and explores new categories of behavioral economics and marginal analysis, which established the success of "General Theory of Employment, Interest and Money", shows the value of Keynes's theory for the further development of macroeconomics.
 
Particular attention is paid to the popularization of Keynes's ideas from the initial interpretations of "The General Theory ..." to the neoclassical synthesis and further to neo-Keynesianism and post-Keynesianism. The paper studies the unity and the distinction between Hicks’ and American Keynesianism. Hicksian assumptions of a savings-investment function have determined the features of the IS-LM model. The contributions to the development of Keynesianism A. Hansen and P. A. Samuelson are also shown, as well as the history of the "Keynesian Cross". A comparative analysis of the neoclassical and Keynesian models of general economic equilibrium is given and analyzes the institutional reasons explaining differences between neoclassical and Keynesian paradigms.
 
A special section is devoted to the Keynesian theory of growth, showing unity and difference of R. Harrod and E. Domar models, along with their impact on the creation of Development Economics. Simplified understanding of Keynes's legacy has caused the emergence of unorthodox Keynesianism. The paper focuses on the contributions of R. Clower and A. Leijonhufvud to grasping the role of uncertainty and expectations in the original concepts of Keynes and his contributions to the study of disequilibrium economy. Finally, we investigate the contribution of post-Keynesians (J. V. Robinson, P. Sraffa and N. Kaldor), the rise and the fall of the Phillips curve, as well as the criticism of the Keynesian doctrine given by the monetarists, adherents of supply-side economics, new classical economics, the theory of rational expectations and the public choice.

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The Theory of Institutional Disintegration: Conceptual Potential and Methdological Frameworks

The Theory of Institutional Disintegration: Conceptual Potential and Methdological Frameworks

Journal of Institutional studies, , Vol. 8 (no. 1),

The methodological opportunities and conceptual frameworks of theory of institutional disintegration developed by the author and the implication of the theory in market studies are analyzed. The problem of institutional transformation is one of the main theoretical problems in new institutionalism. The author believes that social institutions describe acceptable and unacceptable economic behavior for economic agents, and the institutional disintegration is the result of the gradual evolution of norms and rules of behavior. Institutional disintegration starts as the result of the growth of default rules. In the paper, institutional exceptions are considered to be a product of institutional disintegration and the behavioral foundations of new markets. The theory explains how “inner” transformation of rules of behavior impacts on market development and market behavior of economic agents. Analyzing the methodological advantages and problems of such approach, the author comes to the conclusions that the theory of institutional disintegration has some methodological perspectives in institutional economics and market studies.

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Institutions, Behavior of Agents and Efficiency

Institutions, Behavior of Agents and Efficiency

Journal of Institutional studies, , Vol. 8 (no. 1),

We study the efficiency criterion, describing the behavior and choices of agents, the influence of moral norms on the model of behavior, as well as the criterion of efficiency as an institution to assess the behavior and development of the economic system. Curve proposed institutional compromise that allows to determine the possibility of changes in the welfare of interacting agents and their compliance with ethical standards when welfare increases due to violation or compliance with these standards. For the purposes of this demonstration of the influence of the model of chart-based dilemmas Holmes-Moriarty. Incentives in determining the agents behaviors play a key role in their formation due to the moral principles of behavior. However, in economics there are situations when moral principles are derived certain behaviors or interactions agents. Holmes and Moriarty there is an alternative interaction, which they can not take advantage of, and there is a full range of alternatives that actually programs the strategic outcomes of interactions that reflect the curves of "institutional compromise." Choosing an agent of moral standards as a potential model determines its behavior and, most importantly, interaction with other agents, adhering to certain moral principles. Assess the condition and the possibility of using a static criterion of Pareto efficiency for the analysis of situations where it is important to measure the economic efficiency. Showing institutional aspects that must be considered in the application or formulation of new performance criteria. It is proved that there is a connection microeconomic efficiency / inefficiency and parameters of behavior of agents that actualizes the need to impact on the behavior of agents incentives to solve the task of changing the structure.

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Value and Institutional Bases of Posturban Lifestyle in Russia: Hypothes and Empirical Research

Value and Institutional Bases of Posturban Lifestyle in Russia: Hypothes and Empirical Research

Journal of Institutional studies, , Vol. 8 (no. 1),

Based on the results of field sociological studies, the paper analyzes value orientations and the nature of identification of representatives of post-urban life activity forms in contemporary Russia. The authors suggest the hypothesis of new promising forms (their operating name is post-urban ones) of life and activity organization in people's communities having already emerged and been institutionalized. The following signs act as leading ones in this new model of life activity: moving away from the urban binding toward new forms of involvement into the global environment; modern technological solutions – they occupy an important place in models of social and economic activity of post-urbanists; orientation to family and labor model of life support as a principal foundation of the post-urban model. Proceeding from the materials of in-depth interviews, the paper demonstrates that post-urbanization processes take place with and are supported by post-urban type values. The most important of them are the value of uniqueness succeeding the unification one, the value of modern family-based labor and daily life organization (it substitutes the value of factory- and plant-associated aloofness), the value of human-centered technological, social and daily patterns that compete with priorities of machine production and consumption standards, the value of social capital as opposed to urban fragmentation.

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Law of One Price under Equilibrium Price Dispersion: Arbitrage and Optimization of Search

Law of One Price under Equilibrium Price Dispersion: Arbitrage and Optimization of Search

Journal of Institutional studies, , Vol. 8 (no. 1),

If the demand under price dispersion is formed by consumers with zero search costs and consumers with positive search costs, the law of one price holds at the equilibrium price level, where the lowest willingness to pay between consumers with zero search costs meets the willingness to accept or to sell of consumers with positive search costs. The equilibrium price level is provided by the individual equality of marginal losses in labor income during the search with marginal savings on purchase. Suboptimal decisions of consumers with positive search costs create an opportunity of arbitrage with willingness to pay at the zero costs search level. Arbitrage corrects suboptimal decisions of consumers with positive search costs and sets the stable equilibrium price dispersion with new equilibrium price.

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Institutional Framework of Income Inequality in Modern Economy

Institutional Framework of Income Inequality in Modern Economy

Journal of Institutional studies, , Vol. 8 (no. 1),

The subject of this paper is interpersonal income inequality in Russia and in the world and its institutional framework. On the basis of in-depth analysis of the literature we explore the causes and consequences of inequality and its relationship with economic development. We distinguish four basic causes of income inequality: natural and acquired features of people; status differences and their limitations; differences in productivity and development peculiarities in various industries; uneven distribution of accumulated property, as well as the return on assets in dynamics and assets assessment characteristics. By means of the calculation of a number of generalizing measures (coefficient of variation, Gini, Hoover, Theil, Theil-Bernoulli and Atkinson indexes) for the Russian economy we revealed a positive relationship between the average level of wages in industries and its intra-differentiation, which is more typical for the private sector of the economy. At the same time it has been found convergence in salaries differentiation in the public sector of the Russian economy to salaries differentiation in the private sector, while there is not confirmed any correlation between wage level and intra-wage differences in the public sector industries. It enabled us to conclude about the deterioration of the institutional environment in the public sector.
 
In the second part of our paper we compared two approaches to the role of institutional environment in inequality: the approach of T. Piketty (according to which rising inequality is the result of market laws and market institutions in general), and the approach of D. Acemoglu and others (inequality is due to the bad quality of institutions, which is formed largely endogenously in a particular environment). Bending over to the second point of view, we analyzed the relationship between inequality and interdependence of political and economic institutions. In particular, we examined the impact of the labor market and the public finance institutions, as well as the degree of openness of the economy on income inequality. The paper summarizes the approaches to the effects of income inequality on economic development, political processes and social well-being of population. It puts forward a number of proposals to manage institutional environment in order to bring inequality closer to its optimal economic level.

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Institutional Transition from Welfare Enterprise to Social Enterprise: the Localization of Legislation and Policy in Chinese Context

Institutional Transition from Welfare Enterprise to Social Enterprise: the Localization of Legislation and Policy in Chinese Context

Journal of Institutional studies, , Vol. 8 (no. 1),

Welfare enterprises, which are intended to create jobs for disabled people, are the core component of China's welfare system. As the economic environment and regulations change, China's welfare enterprises, which cannot take effective measures from within and emerge strong in market competition, are stuck in a bottleneck where further development is difficult. Welfare enterprises have hit the ceiling in their development for lacking sustainable sources of capital and capabilities of capital operation, inefficient management model and uncompetitive products and services. To reverse the trend of decline and grow into strong market players, the transformation from welfare enterprise to social enterprise, embracing the features of enterprise and social objectives, as an alternative is of crucial importance. As a new hybrid economic form, social enterprise combines the efficiency of businesses and the public-good nature of welfare enterprises, representing win-win cooperation among the government, society, and business sector. Such development is an institutional transformation which boosts competitiveness and tackles tough issues welfare enterprises are facing. Shifting from welfare enterprises to social enterprises means an institutional transition, during the process of which international experience in legislation shall be learned and localized. This paper analyzes the development history of welfare enterprises by taking a comprehensive look at the salient points of existing laws, policies promulgated throughout history, implementation and performance, major problems etc. so as to explore the institutional transition from welfare enterprises to social enterprises, revealing possible legal and policy problems and making suggestions.

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Changes in Rational Economic Behavior Model, Caused By the Development of E-Commerce

Changes in Rational Economic Behavior Model, Caused By the Development of E-Commerce

Journal of Institutional Studies, , Vol. 8 (no. 1),

In the paper the author examines the origins of rationality concept and its transformation within the framework of economic science. According to the author, rationality is a fundamental concept both for philosophy and for economics. Changes in rational economic behavior model significantly effect on informal institutes (in short-term perspective) and on formal institutes (in long-term period).
 
In the paper it is said about significant changes taking place with humanity right now. Today it becomes more and more difficult to describe human behavior by uniform concept of rationality. Now people live in a world that is developing unprecedentedly fast, with the usage of incredible amount of information, countless tasks and social contacts. The development of the Internet and IT tools facilitate this process. Already since the midtwentieth century advertising and marketing has been influencing people’s lifestyle like politics or news. Media resources brands today are comparable to the resources of some political parties or even TV channels what means that advertising today is one of the main factors affecting consumers ' minds and their behavioral model, main feature of which is the premise of rationality or justification of actions.
 
The author analyzes the changes of models of rationality over time and, above all, the changes caused by the development of Internet marketing and its tools for monitoring user activity and the impact on decision making in the Network. In conclusion a number of recommendations is given, which can help consumers to save an independence in making decisions in the Internet environment.

Views: 1330

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