COLLOQUIUM IN ADVANCED                              Professor F. S. Lee

MICROECONOMICS                                               Office:  Manheim Hall Room 202D

(ECON 602)                                                                Office Hours:  MW 2.30 – 3.30

Fall 2009                                                                                              or by appt.

                                                                                    E-mail:  leefs@umkc.edu

                                                                                    Tel.:  816-235-2543

 

Lectures:          Monday, Wednesday 4.00 – 5.15, Flarsheim Hall 260.

 

Main Texts:   J. Davis, The Theory of the Individual in Economics.

                        N. Fligstein, The Architecture of Markets.

                        H. Kurz and N. Salvadori, Theory of Production.

                        T. Lawson, Reorienting Economics.

                        F. S. Lee, Post Keynesian Price Theory.

 

Supplemental Texts:                 

                        P. Downward, Applied Economics and the Critical Realist Critique.

            R. P. F. Holt and S. Pressman, Empirical Post Keynesian Economics                    

                        L. L. Pasinetti, Keynes and the Cambridge Keynesians

                        S. Fabiani et. al., Pricing Decisions in the Euro Area

                        F. Lee, The Simple Mathematics of Linear Production Models.

 

Problems:         Problem sets will be distributed.

 

Assessment:      A set essay of 3,000 words typed.  It is due on September 21, 2009.  It is worth 25% of your grade.

                        A set essay of 5,000 words, typed.  It is due on October 26, 2009.  It is worth 25% of your grade.

                        A set essay of 5,000 words, typed.  It is due on November 30, 2009.  It is worth 25% of your grade.

                        Final exam worth 25% of your final grade – the exam is on Friday, December 18,                                              2009 from 8.00 – 10.00am

                                   

Announcement: No classes on September 7 and November 23 - 27.

                                    No class on November 9, 2009, with a possible make-up TBA.

                                    Possibly no classes on September 28 and 30, with make-up TBA

 

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.

 

 

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.          Introduction to Heterodox Microeconomic Theory

 

A.        Heterodox Economic Theory

 

                1.         Bortis, H.  1997.  Institutions, Behaviour and Economic Theory:  A

Contribution to Classical-Keynesian Political Economy.  Cambridge:  Cambridge University Press, chs. 1, 2, and 5.

                        2.         Lee, Post Keynesian Price Theory, chs. 1-10.

                        3.         Power, M.  2004.  “Social Provisioning as a Starting Point for Feminist Economics.”  Feminist Economics 10.3 (November):  3 – 19.

4.         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.

                        5.         Dobb, M.  1945.  “The Requirements of a Theory of Value.”  In Political

Economy and Capitalism, pp. 1 – 33.  New York:  International Publishers.

                        6.         O’Boyle, E. J.  1994.  “Homo Socio-Economicus:  Foundational to Social Economics and the Social Economy.” Review of Social Economy 52.3 (Fall):  286 – 313.

                                    7.         Aspromourgos, T.  2004.  “Sraffian Research Programmes and Unorthodox Economics.”  Review of Political Economy 16.2 (April):  179 – 206.

                                    8.         Matthaei, J.  1996.  “Why Feminist, Marxist, and Anti-Racist Economists Should be Feminist-Marxist-Anti-Racist Economists.”  Feminist Economics 2.1 (Spring):  22 – 42.

                        9.         Pasinetti, L. L.  2007.  Keynes and the Cambridge Keynesians.  Cambridge: 

                                    Cambridge university Press, Books 1-2.

                                10.           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.

                        11.       Lee, F.  2009.  A History of heterodox Economics.  London:  Routledge.

 

            B.         Methodology of Heterodox Economics

 

                        1.         Lawson, T.  1997.  Economics & Reality.  London:  Routledge.

                        2.         Lawson, T.  2003.  Reorienting Economics.  London:  Routledge, chs. 1-4, 6,10.

                        3.         Bortis, H.  1997.  Institutions, Behaviour and Economic Theory:  A

Contribution to Classical-Keynesian Political Economy.  Cambridge: Cambridge University Press, chs. 3, 5.         

            4.         Spiethoff, A.  1952.  “The ‘Historical’ Character of Economic Theories.” 

The Journal of Economic History 12.2 (Spring):  131 – 139.

5.         Downward, Applied Economics and the Critical Realist Critique, chs. 1-10.

6.         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 (January):  77 – 99.

                        7.         Locke, Grounded Theory in Management Research, chs. 1-7.

8.         Finch, J. H.  2002.  “The Role of Grounded Theory in Developing Economic

Theory.”  Journal of Economic Methodology 9.2:  213 – 234.

                        9.         Downward, P. and Mearman, A.  2002.  “Critical Realism and Econometrics:  Constructive Dialogue with Post Keynesian Economics.”  Metroeconomica 53.4:  391 – 415.

                        10.       Bryant, A. And Charmaz, K. (eds)  2007.  The SAGE Handbook of Grounded Theory.  Los Angeles:  SAGE Publications, chs. 1,4,5,8,11,20,27

                                   

            C.        Micro-Macro Structure and Organization of Economic Activity

 

                        1.         Leontief, W. 1986.  Input-Output Economics.  New York:  Oxford University Press, chapters 1-2.

                        2.         Zimmermann, E. W.  1951.  World Resources and Industries.  Revised Edition.  New York:  Harper and Brothers, Publishers, chs. 1 and 9.

                        3.         De Gregori, T. R.  1987.  “Resourses are Not; They Become:  An Institutional Theory.”  Journal of Economic Issues 21.3 (September):  1241 – 1263.

                        4.         Lee, Post Keynesian Price Theory, chs. 11, 12.

                        5.         Kurz and Salvadori, Theory of Production, chs. 3, 4, 10, 13.

            6.         Davis, J. B.  2003.  The Theory of the Individual in Economics:  Identity and Value.  London:  Routledge, chs. 1, 6, 7, 8, 9, and 10.

            7.         Matthaei, J.  1984.  “Rethinking Scarcity:  Neoclassicism,

NeoMalthusianism, and NeoMarxism.”  Review of Radical Political Economics 16.2/3 (Fall):  81 – 94.

                        8.         Kurz, H. D. and Salvadori, N.  2005.  “Representing the Production and

Circulation of Commodities in Material Terms:  On Sraffa’s Objectivism.”  Review of Political Economy 17.3 (July):  69 – 97.

                        9.         Kurz, H. D. and Salvadori, N.  2006.  “Input-Output Analysis from a Wider Perspective:  A Comparison of the Early Works of Leontief and Sraffa.”  Economic Systems Research 18.4 (December):  373 – 390.

                        10.       Kurz, H. D. and Salvadori, N.  2000.  “Classical Roots of Input-Output Analysis:  A Short Account of its Long Prehistory.”  Economic Systems Research 12.2:  153 – 179.

                                   

            US input-output tables can be found at http://www.bea.gov.

 

II.         The Business Enterprise

 

            A.        Nature of the Business Enterprise

 

                        1.         Moss, S.  1981.  An Economic Theory of Business Strategy.  New York:  John Wiley and Sons, ch. 2.

                        2.         Herman, E. S.  1981.  Corporate Control, Corporate Power.  Cambridge:  Cambridge University Press, chs. 1, 2.

                        3.         Eichner, A.  1976.  The Megacorp and Oligopoly.  Cambridge:  Cambridge University Press, ch. 2.

                        4.         Chandler, A. D.  1988.  The Essential Alfred Chandler:  Essays Toward a Historical Theory of Big Business.  Boston:  Harvard Business School Press, chs. 2, 3, 8, 9, 14, 15, 16.

                        5.         Fligstein, N.  1990.  The Transformation of Corporate Control.  Cambridge:  Harvard University Press.

                       

            B.         Structure of Production and Costs of the Business Enterprise

 

                        1.         Eichner, A. S.  1976.  The Megacorp and Oligopoly.  Cambridge:  Cambridge University Press, ch. 2.

                        2.         Gold, B.  1981.  "Changing Perspectives on Size, Scale, and Returns," Journal of Economic Literature 19 (March):  5 - 33.

                        3.         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.

                       

            C.        Costing, Pricing, and Prices

 

                        1.         Lee, Post Keynesian Price Theory, ch. 11.

                        2.         Downward, P.  1999.  Pricing Theory in Post Keynesian Economics:  A Realist Approach,  Cheltenham:  Edward Elgar, chs. 3-8.

                        3.         Lee, F. S.  1995.  "From Post Keynesian to Historical Price Theory, Part II:  Facts, Theory, and Empirically Grounded Pricing Model," Review of Political Economy 7 (January):  72 - 124.

                        4.         Hall, S, Walsh, M., and Yates, A.  2000.  “Are UK Companies’ Prices Sticky?”  Oxford Economic Papers 52.3 (July):  425 – 446.

                        5.         Eichner, A.  1976.  The Megacorp and Oligopoly.  Cambridge:  Cambridge University Press, ch. 3.

                        6.         Downward, P.  2000.  “A Realist Appraisal of Post Keynesian Pricing Theory.”  Cambridge Journal of Economics 24.2 (March):  211 – 224.

                        7.         Lucas, M. R.  2003.  “Pricing Decisions and the Neoclassical Theory of the                               Firm.”  Management Accounting Research 14:  201 – 217.

                        8.         Fabiani, S. et. al. 2007.  Pricing Decisions in the Euro Area:  How Firms set

Prices and Why Oxford:  Oxford University press, pats I and II.

                                               

            D.        Investment, Employment, and Production

 

                        1.         Moss, S.  1981.  An Economic Theory of Business Strategy.  New York:  John Wiley and Sons, chs. 3, 8.

                        2.         G. C. Harcourt and P. Kenyon, "Pricing and the Investment Decisions," Kyklos (1976):  449 - 477.

                        3.         Lavoie, M.  1992.  Foundations of Post-Keynesian Economic Analysis.  Aldershot:  Edward Elgar, ch. 3.

                        4.         Eichner, A.  1976.  The Megacorp and Oligopoly.  Cambridge:  Cambridge University Press, ch. 3.

                        5.         Bewley, T. F.  1999.  Why Wages Don’t Fall During a Recession.  Cambridge:  Harvard University Press.

                        6.         Baddeley, M. C.  2003.  Investment:  Theories and Analysis.  Houndsmills:  Palgrave.

                        7.         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.

                        8.         Holt, R. P. F. And Pressman, S.  2007.  Empirical Post Keynesian Economics, chs. 6-9.

 

III.       The Market and the Business Enterprise

 

            A.        Industry and Market

 

                        1.         Nightingale, J.  1978.  "On the Definition of 'Industry' and 'Market'," Journal of Industrial Economics 27 (September):  31 - 40.

                        2.         Moss, S.  1981.  An Economic Theory of Business Strategy.  New York:  John Wiley and Sons, ch. 5.

                        3.         G. B. Richardson, "Organization of Industry," The Economic Journal (1972).

                        4.         Fligstein, N.  1996.  "Markets as Politics:  A Political-Cultural Approach to Market Institutions," American Sociological Review 61 (August):  656 - 673.

                        5.         Granovetter, M.  1985.  "Economic Action and Social Structure:  The Problem of Embeddedness," American Journal of Sociology 91 (November):  481 - 510.

                        6.         Smelser, N. J. and Swedberg, R. (eds.)  1994.  The Handbook of Economic Sociology.  Princeton:  Princeton University Press, chs. 11 and 15.

                        7.         Fligstein, The Architecture of Markets, chs. 1, 2, 3, and 4.

                        8.         Hermann, A.  2008.  “The Institutional Analysis of the market.”  International

Journal of Green Economics 2.4:  379-391.

 

            B.         Structure of Market Demand:  Consumer, Industrial, and Government

 

                        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, the Business Enterprise, and the Market Price

 

                        1.         Eiteman, W. J.  1949.  Price Determination:  Business Practice versus Economic Theory.  Ann Arbor:  University of Michigan, pp. 15 - 35.

                        2.         Robinson, R.  1961.  "The Economics of Disequilibrium Price," Quarterly Journal of Economics 75 (May):  199 - 233.

                        3.         Williams, J. B. 1967.  "The Path to Equilibrium," Quarterly Journal of Economics 81 (May):  241 - 255.

                        4.         Lee, F. S.  1990-91.  "Marginalist Controversy and Post Keynesian Price Theory," Journal of Post Keynesian Economics 13 (Winter):  252 - 263.

                        5.         Lee, F. S.  1984.  "Full Cost Pricing:  A New Wine in a New Bottle," Australian Economic Papers 23 (June):  151 - 166.

                       

IV.       Competition, the Market Price, and Market Governance

 

            A.        Business Enterprise, Competition, and the Market Price

 

                        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.

 

            B.         Market Governance and the Market Price:  Trade Associations, Price Leadership, Government Regulation, and Laws

 

                       1.         Howe, M.  1972-73.  "A Study of Trade Association Price Fixing."  Journal of Industrial Economics 21:  236 - 256.

                         2.        Maunder, P.  1972.  "Price Leadership:  an appraisal of its character in some British Industry."  The Business Economist  4.3 (Autumn):  132 - 140.

                         3.        Richardson, G. B.  1967.  "Price Notification Schemes."  Oxford Economic Papers 19:  359 - 369.

                         4.        Smelser, N. J. and Swedberg, R. (eds.)  1994.  The Handbook of Economic Sociology.  Princeton:  Princeton University Press, ch. 18.

 

V.        Microfoundations of Heterodox Macroeconomics

 

            A.        Disaggregated Price-Output Model of the Economy

 

                        1.         Lee, Post Keynesian Price Theory, ch. 12.

                        2.         Lee, F. S.  1996.  "Pricing, the Pricing Model and Post-Keynesian Price Theory."  Review of Political Economy 8 (January):  87 - 99.

                        3.         Bortis, H.  1997.  Institutions, Behaviour and Economic Theory:  A

Contribution to Classical-Keynesian Political Economy.  Cambridge:  Cambridge University Press, ch. 4.

                        4.         Eichner, A.  1976.  The Megacorp and Oligopoly.  Cambridge:  Cambridge University Press, ch. 6.

                        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.         Kurz and Salvadori, Theory of Production, chs. 4, 6, 7, 9, 10, 11.

                        7.         Pasinetti, L. L.  1977.  Lectures on the Theory of Production.  New York:  Columbia University Press, chs. 2, 3, 4, and 5.

8.         Trigg, A. B. and Lee, F. S.  2005.  “Pasinetti, Keynes and the Multiplier.” 

Review of Political Economy 17.1 (January):  29 – 43.

9.         Bellino, E.  1997.  “Full-cost Pricing in the Classical Competitive Process:  A

Model of Convergence to Long-run Equilibrium.”  Journal of Economics 65.1:  41 – 54.

                        10.       Pasinetti, L. L.  2007.  Keynes and the Cambridge Keynesians.  Cambridge: 

                                    Cambridge University Press, Book 3.

 

            B.         Mark Ups, Investment, and Economic Activity

 

                        1.         Foster, J. B. and Szlajfer, H. (ed.)  1984.  The Faltering Economy.  New York:  Monthly Review Press, pp. 23 - 56, 198 - 213, and 236 - 250.

                        2.         Shapiro, N.  1988.  "Market Structure and Economic Growth:  Steindl's Contribution." Social Concept 4.2 (June):  72 - 83.

                        3.         Levine, D. P. 1975.  "The Theory of the Growth of the Capitalist Economy," Economic Development and Culture Change 23 (October):  47 - 74.

4.            King, J. E.  2006.  “Imperfectionism in Macroeconomics:  Old Light on a New

            Controversy.”  Economic Issues 11.2 (September):  39 – 49.

 

            C.        Social Welfare and Corporate Capitalism

 

                        1.         Eichner, A.  1976.  The Megacorp and Oligopoly.  Cambridge:  Cambridge University Press, chs. 5, 7, 8.

                        2.         Lutz, M. A.  1999.  Economics for the Common Good:  Two Centuries of Social Economic Thought in the Humanistic Tradition.  London:  Routledge, chs. 1, 5, 6, 7, 8, 11.

                        3.         O’Boyle, E. J.  1996.  Social Economics:  Premises, Findings and Policies. 

                                    London:  Routledge, chs. 1, 4, 5, 6, 7, 8, 10.

                        4.         Bortis, H.  1997.  Institutions, Behaviour and Economic Theory:  A

Contribution to Classical-Keynesian Political Economy.  Cambridge:  Cambridge University Press, chs. 6 and 7.