The case for increasing returns (2): the methods of planning horizons

In neoclassical economics, substitution assumptions support equilibrium models in closed systems shunning interdependence. On these grounds an array of frames show outcomes as stable, efficient, unique and determinate. Heterodox economists say equilibrium models sidestep practical knowledge and the...

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Autor principal:	Frederic B. Jennings Jr.
Formato:	article
Lenguaje:	DE EN FR
Publicado:	Editura ASE Bucuresti 2016
Materias:	complementarity methodology increasing returns planning horizons Economics as a science HB71-74
Acceso en línea:	https://doaj.org/article/0fa98cc7c7544a48976c50c5b023044e
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spelling	oai:doaj.org-article:0fa98cc7c7544a48976c50c5b023044e2021-12-02T06:55:32ZThe case for increasing returns (2): the methods of planning horizons1843-22981844-8208https://doaj.org/article/0fa98cc7c7544a48976c50c5b023044e2016-05-01T00:00:00Z http://jpe.ro/pdf.php?id=7513 https://doaj.org/toc/1843-2298https://doaj.org/toc/1844-8208In neoclassical economics, substitution assumptions support equilibrium models in closed systems shunning interdependence. On these grounds an array of frames show outcomes as stable, efficient, unique and determinate. Heterodox economists say equilibrium models sidestep practical knowledge and the rich reality of economic behavior. Rigor or realism, mainstream or radical, ecological, institutional, socio-cultural: economics invites a wide diversity of assumptions, once short-term models of substitution are opened to question. The answers are blurred by applications; there is clarity in a simplicity shielded from mundane detail. This paper addresses the methodological impact of planning horizons, increasing returns and complementarity, and their proper representation in economic constructions. Horizonal economics can be construed as extending orthodox standards into a realm of time, but for its subtler ramifications. Increasing returns make our relations complementary and not substitutional, loosening the tight deductions from mainstream models of choice. The horizonal extension of our received theory of price applies time to cost and demand curves, showing Marshallian scissors (supply and demand) cut outward and downward with expanded horizons. Static conceptions appear in horizonal groups, suggesting complete theories of price should specify agents’ horizons, with no further radical impact: the trouble emerges with increasing returns and complementarity. Horizons stem from unbounded causality; if all we do ripples outward forever in nature and society, the relevant field of inquiry for economics is interdependent: this is the case for bounded rationality as an analytical limit to economic conceptions. In turn, interdependence suggests a use of network constructs to frame complex systemic cascades, and networks open a door to complementarity and increasing returns in transport and information exchange. The gaping maw of increasing returns and complementarity opens, swallowing down neat traditions such as stability, equilibrium, marginalism, partial analysis, supply and demand depictions of price, etc. The methodological lesson of this shift to network contexts and dynamic complex systems supersedes some of our favored doctrines and the analyses on which they stand. Without decreasing returns and substitution, neoclassical arguments simply do not work. Heterodox approaches – and their intelligent application – are required in this setting. The paper offers a few guidelines to an unexplored domain of fundamental departures.Frederic B. Jennings Jr.Editura ASE Bucurestiarticlecomplementaritymethodologyincreasing returnsplanning horizonsEconomics as a scienceHB71-74DEENFRJournal of Philosophical Economics, Vol IX, Iss 2, Pp 5-42 (2016)
institution	DOAJ
collection	DOAJ
language	DE EN FR
topic	complementarity methodology increasing returns planning horizons Economics as a science HB71-74
spellingShingle	complementarity methodology increasing returns planning horizons Economics as a science HB71-74 Frederic B. Jennings Jr. The case for increasing returns (2): the methods of planning horizons
description	In neoclassical economics, substitution assumptions support equilibrium models in closed systems shunning interdependence. On these grounds an array of frames show outcomes as stable, efficient, unique and determinate. Heterodox economists say equilibrium models sidestep practical knowledge and the rich reality of economic behavior. Rigor or realism, mainstream or radical, ecological, institutional, socio-cultural: economics invites a wide diversity of assumptions, once short-term models of substitution are opened to question. The answers are blurred by applications; there is clarity in a simplicity shielded from mundane detail. This paper addresses the methodological impact of planning horizons, increasing returns and complementarity, and their proper representation in economic constructions. Horizonal economics can be construed as extending orthodox standards into a realm of time, but for its subtler ramifications. Increasing returns make our relations complementary and not substitutional, loosening the tight deductions from mainstream models of choice. The horizonal extension of our received theory of price applies time to cost and demand curves, showing Marshallian scissors (supply and demand) cut outward and downward with expanded horizons. Static conceptions appear in horizonal groups, suggesting complete theories of price should specify agents’ horizons, with no further radical impact: the trouble emerges with increasing returns and complementarity. Horizons stem from unbounded causality; if all we do ripples outward forever in nature and society, the relevant field of inquiry for economics is interdependent: this is the case for bounded rationality as an analytical limit to economic conceptions. In turn, interdependence suggests a use of network constructs to frame complex systemic cascades, and networks open a door to complementarity and increasing returns in transport and information exchange. The gaping maw of increasing returns and complementarity opens, swallowing down neat traditions such as stability, equilibrium, marginalism, partial analysis, supply and demand depictions of price, etc. The methodological lesson of this shift to network contexts and dynamic complex systems supersedes some of our favored doctrines and the analyses on which they stand. Without decreasing returns and substitution, neoclassical arguments simply do not work. Heterodox approaches – and their intelligent application – are required in this setting. The paper offers a few guidelines to an unexplored domain of fundamental departures.
format	article
author	Frederic B. Jennings Jr.
author_facet	Frederic B. Jennings Jr.
author_sort	Frederic B. Jennings Jr.
title	The case for increasing returns (2): the methods of planning horizons
title_short	The case for increasing returns (2): the methods of planning horizons
title_full	The case for increasing returns (2): the methods of planning horizons
title_fullStr	The case for increasing returns (2): the methods of planning horizons
title_full_unstemmed	The case for increasing returns (2): the methods of planning horizons
title_sort	case for increasing returns (2): the methods of planning horizons
publisher	Editura ASE Bucuresti
publishDate	2016
url	https://doaj.org/article/0fa98cc7c7544a48976c50c5b023044e
work_keys_str_mv	AT fredericbjenningsjr thecaseforincreasingreturns2themethodsofplanninghorizons AT fredericbjenningsjr caseforincreasingreturns2themethodsofplanninghorizons
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The case for increasing returns (2): the methods of planning horizons

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