Papers by Sara Casagrande
The return of comparative economic systems: An extension of János Kornai's contribution
Acta Oeconomica
Kornai profoundly contributed to place the system to the centre of economic analysis. His multidi... more Kornai profoundly contributed to place the system to the centre of economic analysis. His multidisciplinary system paradigm is fundamental for understanding and analysing the variety of economic solutions and its consequences. The strong scientific foundation of Kornai's approach provides a fruitful opportunity to further develop and apply it to the most fundamental economic issues, such as explaining the different performance and strength of different economies and societies. The inclusion of a multidisciplinary perspective has the significant advantage of keeping under control non-economic factors that influence economic activities and performance and allows to account for the real behaviour and evolution of economies and societies. It can also contribute to explain the resilience of economic and social systems and economies. The paper takes stock of the importance of Kornai's analysis and method and applies them to better understanding the nature and working of the Europe...
European Journal of Economics and Economic Policies: Intervention
Economic theory has recently begun to consider the economic impact of narratives. Narrative econo... more Economic theory has recently begun to consider the economic impact of narratives. Narrative economics can also be extended to the analysis of the economic–political effect of narratives in the context of the European core–periphery divide, which intensified after the European sovereign-debt crisis. The dominant narrative of the crisis has placed a lot of responsibility on southern member countries. With the outbreak of the COVID-19 emergency, this narrative has returned to influence European public debate. The authors state the importance of analysing the dominant narrative to understand its validity in explaining the sovereign-debt crisis, and the importance of overcoming it to face the health emergency effectively. Therefore, starting from some alternative explanations regarding the European crisis, a new alternative narrative is presented, which underlines the issues connected to the competitive attitude among member countries and the political disequilibrium that characterizes E...
The Routledge Handbook of Comparative Economic Systems
The Routledge Handbook of Comparative Economic Systems
Sustainability
Performance evaluation is commonly based on objective indicators which do not explicitly consider... more Performance evaluation is commonly based on objective indicators which do not explicitly consider the role of perceptions. Especially when evaluating countries’ performance, citizens’ perceptions can influence public debate and socio-economic narratives. Since these may influence policy making and countries’ performance, perceptions should not be ignored. The objective of this article is to investigate the presence of discrepancies between objective performance and self-perception (subjective performance) among European Union countries. The aim is to raise awareness of the importance of recognizing biases in performance perception as factors that may hamper European debate, countries’ relations and, thus, the political and social sustainability of the European project. The article considers five spending areas that may influence the public opinion’s assessment about countries’ performance (education, environmental protection, health, public order and safety and social protection) an...
Journal of World Economy: Transformations & Transitions, 2022
The European sovereign debt crisis has demonstrated the need for a rethinking of the European Int... more The European sovereign debt crisis has demonstrated the need for a rethinking of the European Integration Project. The strong variety between member countries prevented the Eurozone to become a fiscal and political union and the asymmetric architecture of the European Monetary Union (EMU) revealed different weaknesses. The outbreak of the Covid-19 emergency may represent a turning point for the EU and makes even more evident that the future of the Eurozone will depend also on the ability of member countries to make their institutional frameworks coexist. Helping member countries to achieve sustainable and stable outcomes, although in idiosyncratic ways, is the task of the European benchmark. It is a framework, inspired by European treaties, that aims to identify inefficiencies in terms of market, state and social failures and negative externalities inside economic, social, and political institutions. This benchmark represents a new tool for a correct evaluation of the economic, soci...
Keynesian, Sraffian, Computable and Dynamic Economics, 2021
Prelude to a critique of economic theory, and rehabilitated the forgotten classical theory throug... more Prelude to a critique of economic theory, and rehabilitated the forgotten classical theory through the resolution of the Ricardian problem of an invariable measure of value (i.e., the Standard commodity). Sraffa interpreted the economy as a circular flow, demonstrating how it is possible to determine prices, wages and profits. The fundamental result is that distribution, independently of value theory, depends not only on production conditions, but also on sociological patterns, realizing the conflict between wages and profits. The PCC became the milestone of the Cambridge capital controversy. This controversy challenged the neoclassical interpretation of production and distribution at a strictly logical and mathematical level. The debate was between some economists at the University of Cambridge and other economists at MIT (such as Paul Samuelson and Robert Solow). Even though the value of this criticism has been confirmed by Samuelson (1966), neoclassical theory has been able, substantially, to incorporate some Keynesian results and ignore Sraffa's critique. Nowadays the controversy is simply considered as an episode, or a curiosum (Lunghini 1975, p. xiii). Probably, some concrete methodological and theoretical issues, related to the relationship between Keynesian and Sraffian economics, prevented the construction of an alternative paradigm, favouring the success of neoclassical arguments. In this contribution, the controversial issues at the base of this state of the art will be investigated, from the compatibility between Keynes and Sraffa to their relationship with neoclassical theory. It will be claimed, together with other heterodox economists, that the construction of a real alternative to neoclassical theory will be possible considering both the findings of Keynes and those of Sraffa. After a summary of the attempts made in order to develop a Sraffian-Keynesian synthesis within heterodox economics, the further steps needed in order to develop a new paradigm will be analysed. It will be claimed that it is possible to develop Keynes's monetary theory of production through Sraffian economics for the construction of models able to analyse the dynamics of money-wage entrepreneur economies. This contribution is organized as follows. In Sect. 2, the issues and the attempts related to the development of a Sraffian-Keynesian synthesis will be summarised. In Sect. 3, the further elements that would allow to develop a new paradigm will be commented. In Sect. 4, the possibility of
Comparative Economic Studies, 2021
The European Semester (ES) and the country-specific recommendations (CSRs) have been introduced w... more The European Semester (ES) and the country-specific recommendations (CSRs) have been introduced with the purpose to promote flexibility and adaptation to national circumstances in the governance of fiscal policies. To assess whether the ES has contributed to reconcile economic and social objectives, we measured, through the distance to frontier (DTF) score methodology, the distance of each member country from a benchmark based on EU aims and values defined in the EU treaties. Results show that EU member countries are far from the benchmark and CSRs have not prevented a progressive deterioration of stability and cohesion from an economic, political and social perspective. A content analysis of the CSRs issued from 2011 to 2018 and a comparison with the DTF scores reveal a weak connection between member countries’ performance and CSRs. Despite the social content of many CSRs, we actually observe a “commodification” of their goals. CSRs promote a society functional to flexible and comp...
Indagine sulla natura del capitalismo
La recente crisi economica ci ha costretto a mettere in discussione le nostre convinzioni sul sis... more La recente crisi economica ci ha costretto a mettere in discussione le nostre convinzioni sul sistema economico e sociale che ci circonda. Cosa sappiamo davvero del capitalismo? Questo libro e un viaggio appassionante, insolito e provocatorio nella natura e nella dinamica del nostro sistema economico. Sono state considerate le teorie fondamentali sull'origine del capitalismo partendo dai contributi dei grandi economisti del passato. Si e cercato di individuare i limiti della teoria economica moderna e le potenzialita della Teoria dei Sistemi. Sono stati considerati gli elementi piu controversi e oscuri del capitalismo: dal denaro alla tecnologia, dalla mano invisibile alle interazioni con il sistema politico e sociale. Attraverso l'uso del simbolo e dell'immagine letteraria, si e cercato di indagare la natura faustiana dello spirito capitalistico. In conclusione, si e riflettuto sul destino del capitalismo attraverso l'analisi del fenomeno del ciclo economico e del c...
Keynesian economics has devoted particular attention to out of full employment equilibrium phenom... more Keynesian economics has devoted particular attention to out of full employment equilibrium phenomena, but the lack of an analytical framework for describing how economic agents interact and organize their production and consumption decisions has made it difficult to establish whether the economic system is self-adjusting at an out-of-full employment equilibrium. One of the purposes of Sraffa's book Production of Commodities by Means of Commodities was to understand the conditions that allow the system to reproduce itself. But how trade takes place remains an open question. For Sraffian economics, the lack of an analytical framework for describing how economic agents interact and organize their production and consumption decisions, has made it difficult to consider out-of-equilibrium behaviour. The present thesis is a first attempt to model Keynes's principle of effective demand with the aid of Sraffian schemes. The notion of effective demand requires the possibility for buye...
Algorithmic Social Sciences Research Unit ASSRU Discussion Paper Series 9 – 2017 / I A digital simulation model of out-of-equilibrium market behaviour
It is presented an algorithmic model of an economic system (with labour and goods market), where ... more It is presented an algorithmic model of an economic system (with labour and goods market), where decisions of production and consumption are made by a population of Algorithmic Rational Agents (ARAs), divided between producers and workers. The ARAs are characterized by behavioural functions, specific trading rules and are connected in a network. Exchanges are made by signing virtual contracts that involve the use of financial means. The creation of new financial means of exchange, credit and debt, is endogenous. Production is heterogeneous and conceived as a circular process. This algorithmic model represents a digital economic laboratory, a powerful instrument able to generate virtual economies in order to answer di↵erent research questions. It represents an answer to the need to develop models able to explore the complexity of out-of-equilibrium market behaviour, grounded on bookkeeping principles and computable methods.
Research Papers in Economics, 2021
The chapter assesses the new comparative economics’ (NCE) contribution to the analysis and compar... more The chapter assesses the new comparative economics’ (NCE) contribution to the analysis and comparison of economic systems and economies. It highlights the NCEs aims and research program and compares these to the traditional field of comparative economic systems (CES). The comparison shows that both approaches are useful for a better understanding of the working of economies and the management of change. Being different in both their theoretical stance and the method they use, they heuristically compete, but normatively they provide useful contributions in different ways and cases. They should thus continue to compete for improving our knowledge and analysis of different institutional constructions. The chapter also considers the development of the field and looks at the number and topic of scientific publications since 1991.
Benchmarking institutional variety in the eurozone: An empirical investigation
Economic Systems, 2021
Abstract The European debt crisis has shown that the future of the European Union (EU) depends on... more Abstract The European debt crisis has shown that the future of the European Union (EU) depends on the willingness of each member country to implement responsible policies, avoid moral hazard and uncooperative attitudes, and ensure stability and soundness. However, the European institutional variety means that each member country reacts differently to shocks and policies, follows a different path of recovery, and adapts to common institutions, including the common currency, in different ways. Helping countries to converge toward a situation that guarantees well-being, stability, and development at the national and community level is the goal of the European benchmark. This benchmark is a framework inspired by European treaties that, through the distance-to-frontier score methodology, aims to measure member countries’ performance and identify inefficiencies and negative externalities within the economic, social, and political institutions of each member country. The paper presents an empirical investigation of the European benchmark. Based on the results obtained, all countries can improve their performance, and none of them can be considered a model for the others. However, the Mediterranean and post-communist countries have more challenges to face and therefore need to make greater efforts.
International Journal of Sustainable Economy, 2019
One surprising aspect of the recent economic crisis was the inability of economists to predict it... more One surprising aspect of the recent economic crisis was the inability of economists to predict it. This failure was caused by several reasons: a short-term economic thinking, the belief that economic dynamics is a constantly growing path disturbed by erratic shocks, and the lack of a social and evolutionary perspective. We start from the thought of Schumpeter and we aim to deepen his unfinished but very fascinating project: the creation of an economic model that is capable of explaining the endogenous and cyclical nature of growth. Schumpeter called this model the inner vibratory system, suggesting that economic dynamics are determined by a biological mechanism that is subject to nonlinearity but which is able to generate an ordered evolution. In this paper we will analyse the main features of a possible inner vibratory system and we will examine its role in the development of models that are able to explain economic crises and embody the concept of long-term sustainable growth.
Vol 20, No 1 (2021), 2021
The Covid-19 emergency makes the seriousness of the unsolved political and economic issues that e... more The Covid-19 emergency makes the seriousness of the unsolved political and economic issues that emerged during the European sovereign debt crisis even more evident. Today more than ever it is necessary to answer questions related to the fragility of the EMU architecture: why was the EMU created with an asymmetric structure? What was the role of EMU architecture and European policies during the crisis? Do EMU asymmetries threaten the survival of the Eurozone? The European integration process took place on the basis of a permissive consensus determined by the expectation of successful economic outcomes, without a true democratic legitimacy. Under such conditions, a fiscal and political union was not possible. The EMU proved to be a competitive arena, within which economic and political asymmetries were difficult to manage. An analysis of these asymmetries allows conclusions to be drawn regarding the risks associated with further economic and institutional integration.
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Papers by Sara Casagrande