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Capitalism & society

The Berkeley Electronic Press have launched a new journal Capitalism and Society. It looks interesting. The first issue comprises the following articles and commentary by Professor Robert Solow, drawn from a session at the Center’s Inaugural Conference.

I list the papers from the first issue and abridged abstracts:

Gilles Saint-Paul, ‘Will Limited Needs Kill Capitalism?’ http://www.bepress.com/cas/vol1/iss1/art4

Unorthodox views of capitalism can be derived if monopolistic competition is coupled with the assumption that utility derived from consuming individual goods is bounded. This can rationalise productivity so high that many people are saturated with goods and productivity growth reducing the real wage with benefits from growth being appropriated by symbol manipulators. Depending on levels of product diversity and physical productivity, globalization may harm poorer workers in LDCs, rather than unskilled workers in developed countries.

Philippe Aghion ‘Interaction Effects in the Relationship Between Growth and Finance’
http://www.bepress.com/cgi/siteview.cgi/cas/vol1/iss1/art2

Interacting financial development with initial income, macroeconomic volatility and policy variables, can improve our understanding of convergence and divergence across countries, and also restore the significance of correlations between growth and volatility and therefore between growth and macropolicy, even when controlling for country fixed effects or when eliminating countries with extreme policies or bad institutions.

Amar Bhidé (2006) ‘How Novelty Aversion Affects Financing Options’
http://www.bepress.com/cgi/siteview.cgi/cas/vol1/iss1/art1

Entrepreneurs may undertake bad projects because they unwittingly rely on defective or incomplete information to estimate the returns. Investors’ concerns about such misjudgements are low when the entrepreneurs’ knowledge about their projects has been well calibrated. But if the novelty of the project (or some other unusual circumstance) makes calibration impossible, investors may reject the entrepreneur’s funding request. This ‘novelty aversion’ effect helps explain why ventures that are initially self-financed can subsequently attract outside financing without any decrease in standard ‘incentive’ or moral hazard problems. It also provides new insights about the differences in the investment preference and procedures of individual ‘angel’ investors, venture capital partnerships and large public companies.

Bob Solow, makes entertaining comments on the three papers http://www.bepress.com/cgi/siteview.cgi/cas/vol1/iss1/art3

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