International Journal of Pluralism and Economics Education (7 papers in press)
Conventional Futures: A Review of Major issues from Islamic Finance Perspective
by Mohammad Ashraful Ferdous Chowdhury, Yousuf Sultan, Md. Mahmudul Haque
Abstract: Futures contracts, a widely used instrument for hedging and speculation, has recently become of interest in Islamic finance. However, numerous studies have passed restrictive judgment against the legitimateness of futures contracts as it contains components contradicting Islamic law e.g., offering a nonexistent product, short selling, gambling, and delay of counter values. The objective of this study is to explore shari'ah views on futures contracts. This study suggests that the validity of the contract depends solely on the nature of the agreement, the subject matter and existence of the prohibitive elements. Finally, this study recommends further research and invites collective efforts to innovate shariah compliant futures contacts.
Keywords: Conventional Future; futures contracts; gambling; Islamic finance; shari’ah law.
Ideology and pluralism in economics: a German view
by Arne Heise
Abstract: As a social science, economics studies social interactions. What ostensibly distinguishes it from the other social sciences is, firstly, its focus on interactions involving the management of scarce resources and the social provising process and, secondly, its conception of itself as generating traceable, verifiable findings that are free of normative judgements but instead yield objective knowledge. Some regard this methodological foundation of positivist fallibilism as the feature that makes economics the queen of the social sciences. Others are critical of these core assumptions, which they believe have no place in a social science. Interestingly, both critiques and defences of economics often make reference to ideology: defenders claim that economics is as free of ideological bias as possible, while critics deny economics status as a science and instead regard it as an ideology that serves to uphold power relations. This article explores the relationship between ideology and economics with special reference to German academia, asking whether a pluralist approach to economics could help make the discipline less vulnerable to the charge of being ideological.
Keywords: ideology; pluralism; monism; value freedom; methodology; ontology.
Why Realism and Methodological Pluralism Matter for Robust Research and Public Policy: Perspectives from Behavioural Economics
by Morris Altman
Abstract: The conventional view maintains that a critical test of the veracity of robust economic theory is its capacity to generate plausible economic predictions, irrespective of the realism of the theories underlying the assumptions. This type of methodological argument, often implicit, even holds for relatively less conventional approaches to economics such as behavioural, experimental, and institutional. Following upon the arguments of the initial architects of behavioural economics, such as Herbert Simon, I argue that such a methodology can easily result in the illusion of causality, the omission of potentially key variables, and closing the doors to key analytical questions as well as to publication bias. Apart from generating possibly perverse analytical results, the consequence for public policy can be severe. I argue that methodological pluralism (a Big Tent approach, being open to different perspectives on economic analysis) is critical to the construction of robust economic theory, irrespective of ones political orientation. Examples are drawn from financial markets, labour markets (minimum wages, unions, welfare dependency), and macroeconomics to illustrate this pluralistic perspective on economic analyses.
Keywords: Methodological pluralism; behavioral economics; public policy; assumptions; realism; analytical predictions; publication bias.
Macroeconomics and the world economy in one lecture: a didactic primer
by Dirk Ehnts
Abstract: In the aftermath of the Great Financial Crisis (GFC) a consensus has formed that economics needs to be reinvented, and most especially macroeconomics. In this article, a first lecture of macroeconomics provides students with a sound foundation. Using a graphical model we demonstrate that when net expenditures increase, the world economy expands with rising employment; and when net expenditures slow, so does the world economy. At the margin, expenditures can only be increased by injections of net deposits created by an increase in debt. Concluding this first lecture, students take away the insight that (rising) expenditures and debt are necessary for the world economy to grow, and that both the rate of unemployment and the rate of inflation are correlated to the change in debt.
Keywords: monetary circuit; fiscal policy; monetary policy; sectoral balances; macroeconomics; savings; financial flows; balance sheets.
Marginalism and Maths Teaching in Introductory Economics
by Martin Jones
Abstract: Marginalist teaching methods should be abandoned in first-year economics courses, and teaching should be opened up to a wider, more pluralist, mode of teaching. This paper focusses on one aspect of marginalist teaching: the iterative argument by which Marginal Cost is brought into equilibrium with Marginal Revenue. It is shown that the argument is difficult to understand, is never used beyond first year teaching, lacks empirical content and misleads as to the content of neoclassical economics. This issue extends beyond this example to other marginalist aspects of typical introductory economics courses. The genesis of these teaching methods is a desire by early marginalists to avoid mathematical notation. However, the growth of mathematical courses within modern economics programmes makes this unnecessary. The elimination of these methods opens space in the curriculum for other topics.
Keywords: mathematics teaching in economics; marginalism; maths; introductory economics.
Service Learning in the Undergraduate Economics Classroom
by Valerie K. Kepner
Abstract: Service learning has shown itself to be a valuable tool in demonstrating to undergraduate students the real-life effects of applying abstract economic theories. Courses in public economics and money and banking are especially well-suited to service learning activities. Students are able to apply economic theories to local programs serving the hungry, the sick, and the financially disadvantaged. This paper will describe the service learning projects assigned to students over the last several years and present qualitative evidence of student satisfaction (and dissatisfaction) with the learning. The paper will conclude with reflections on the value of service learning in teaching students the importance of the immediate social, cultural, and economic environment in determining ones opportunity to prosper and why this matters.
Keywords: service learning; pluralism; economics education; public economics; higher education; money and banking.
Heterodox Microeconomics: The case of corn flour in Mexico
by Gustavo Vargas
Abstract: This article uses heterodox microeconomics (especially Andrews, Eichner, Lee, and Lavoie) to analyze the market dynamics of corn flour in Mexico; and more specifically, the role of megacorporations, pricing, competition, and the relationship between competition strategies and the dynamics of accumulation. Corn flour is the basic input for the production of tortillas, a fundamental food in the Mexican diet; a product that has been globally industrialized, allowing us to demonstrate its efficiacy in understanding modern capitalist enterprises. First, we analyze the corn flour market in Mexico, and second, market forces, competitive strategies, and pricing strategies. Finally, using the theoretical framework of heterodox microeconomics, we represent pricing, innovation, market power, financial effects, and accumulation.
Keywords: Heterodox microeconomics; megacorporation and microeconomics; price fixing; forms of competition; case study; corn market.