The purpose of this paper is to integrate a detailed theory of perception and action with a theory of entrepreneurship. It considers how new knowledge is developed by…
Abstract
Purpose
The purpose of this paper is to integrate a detailed theory of perception and action with a theory of entrepreneurship. It considers how new knowledge is developed by entrepreneurs and how the level of creativity is regulated by a competitive system. It also shows how new knowledge may create value for the innovator as well as for other entrepreneurs in the system.
Design/methodology/approach
The theory builds on existing literature on creativity and entrepreneurship. It considers how transformation of mental technologies occurs at the individual and system levels, and how this transformation influences value creation.
Findings
Under a competitive system, the level of creativity is regulated by the need for new ways of doing things. Periods of crisis wherein old means of coordination begin to fail often precipitate an increase in creativity, whereas a lack of crisis often allows the system to settle to a stable equilibrium with lower levels of creativity.
Research limitations/implications
The combination of methodology and methods facilitates a description of discrete building blocks that guide perception and enable creativity. This framing enables consideration of how a changing set of knowledge interacts with a system of prices.
Practical implications
Policy makers must take care not to encumber markets with costs that unnecessarily constrain creativity, as experimentation makes the economic system robust to shocks.
Social implications
This work provides a framing of cognition that allows for a linking of agent understanding that permits explicit description of coordination between agents. It relates perception and ends of the individual to constraints enforced by the social system.
Originality/value
As far as the author is concerned, no other work ties together a robust framing of cognition with computational simulation of market processes. This research deepens understanding in multiple fields, most prominently for agent-based modeling and entrepreneurship.
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The development of blockchain and cryptocurrency may alleviate the economic strain associated with recession. Economic recessions tend to be aggregate-demand driven, meaning that…
Abstract
Purpose
The development of blockchain and cryptocurrency may alleviate the economic strain associated with recession. Economic recessions tend to be aggregate-demand driven, meaning that they are caused by fluctuations in the supply of or demand for money. Holding monetary policy as solution assumes that stability must arise from outside of the economic system. Under a policy regime that allows innovations in blockchain to develop, blockchain technology may promote a money supply that is responsive to changes in demand to hold money. The purpose of this paper is to suggest that cryptocurrencies present an opportunity to profitably implement rules that promote macroeconomic stability. In particular, cryptocurrency that is asset-backed may provide a means for cheaply attaining liquidity during a crisis.
Design/methodology/approach
The role of cryptocurrency in promoting macroeconomic equilibrium is approached through the lens of monetary theory. Moves away from macroeconomic equilibrium necessitate either a change in the average price of money or a change in the quantity of money, or a change in portfolio demand for money. Cryptocurrency promotes an increase, however this requires the alignment of policy regulating the use of cryptocurrency, reduction in taxes placed on the use of cryptocurrency and cryptocurrency protocol.
Findings
Cryptocurrency is unlikely to become legal tender, but it may alleviate macroeconomic fluctuations as a near money that provides liquidity and whose supply is sensitive to changes in demand to hold money and money-like substitutes. This role might be inhibited if policy stifles the development of cryptocurrencies and blockchain technology.
Research limitations/implications
New financial innovations like cryptocurrencies can be analyzed applying the equation of exchange in light of the mechanics of money creation under conditions of disequilibrium. Monetary disequilibrium may be promoted by policy that causes bottlenecks in financial markets.
Originality/value
Theory of monetary disequilibrium has broad implications for the development and regulation of financial markets. This theory has not been applied to the development of cryptocurrency markets.
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Abstract
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James Caton and Richard E. Wagner
Traditional Austrian cycle theory starts from general equilibrium and explains how an expansion of bank credit unmatched by an expansion of saving can create a cycle of…
Abstract
Traditional Austrian cycle theory starts from general equilibrium and explains how an expansion of bank credit unmatched by an expansion of saving can create a cycle of boom-and-bust, and with the bust followed by restoration of normality. In contrast, this paper offers a non-equilibrium reformulation of those earlier Austrian insights, which expands and refocuses the analytical agenda of macro theory. Our key analytical feature is the conceptualization of a macro economy as constituted through an open-ended ecology of plans. Within this framework, macro variables are not primitives but are derivative from micro-level interaction. In turn, the computation of optimizing actions is beset with undecidability. The theory of entrepreneurial choice that is suitable for this analytical framework is based on rule-following or algorithmic choice and not on computational maximization. What results is a macro ecology, the internal operation of which entails natural volatility. What are called policy actions, moreover, operate inside and not outside the ecology, and can create induce volatility within the ecology.
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Ion Sterpan and Richard E. Wagner
Political economy is a term in wide use and has been for centuries. Yet standard economic theory reduces politics to ethics or economics. This reduction is enabled by the…
Abstract
Political economy is a term in wide use and has been for centuries. Yet standard economic theory reduces politics to ethics or economics. This reduction is enabled by the presumption of closed choice data or given utility and cost functions. In this conceptual framework, the political vanishes into an activity of preference satisfaction according to a welfare function (ethics) or into trade (economics). To bring the political back to life within a theory of political economy requires that closed schemes of thought be replaced by open schemes. The ways in which individuals react to the indeterminacy of their subjective choice data, in innocuous small-scale settings as well as in situations of dramatic exception to constitutional rules, separates them into leaders and followers. Followership creates an opportunity for political enterprise at the social level (enterprise in rules) and at the subjective level (enterprise in visions of options, and hence preferences). At both levels the political comes to the fore of political economy as an answer to the “challenge of exception.” Much of our inspiration for this argument traces to the work of Friedrich Wieser, Carl Schmitt, and Vincent Ostrom.
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After briefly discussing the two major approaches to the study of tourism (theoretical “why” and practical “how”), and two of their respective protagonists (Tribe and Aramberri)…
Abstract
After briefly discussing the two major approaches to the study of tourism (theoretical “why” and practical “how”), and two of their respective protagonists (Tribe and Aramberri), the focus of this chapter turns to the use of paradigms by the former group. First, the meaning of paradigm is explored and examples are provided of paradigms and paradigm shifts in tourism research. However, Aramberri challenges this theoretical position by asserting that such ideological frameworks are not paradigms at all, and are, at best, postmodern mantras. He further argues that such muddled thinking can be overcome once tourism becomes a scientific discipline, a stance firmly rejected by the theoreticians. Thereafter, the use of the word “paradigm” is examined in relation to conferences, research, and shifts, as well as such major tourism perspectives as authenticity, strangerhood, play, and conflict.