Economics of Information Biasing: A Unified Economic Theory That Leads to New Sustainability Concepts

Zaman, Monowaruz (2018): Economics of Information Biasing: A Unified Economic Theory That Leads to New Sustainability Concepts.

Abstract

This article brings two scientific paradigms of economics, neoclassical economics and institutional economics together based on my concept “Biased Equilibrium” stemmed from information sharing strategies of economic agents and the origin of general equilibrium to provide holistic view of real world economic and social structures. Our social or economic institutions can be subjectively modeled as an information biasing chain where economic agents are positioned in interdependent abstract coalitions. The upper layer coalitions virtually control the institutions and they have greater influences on our economy that provokes growth by exhausting energy and other natural resources and causing global warming and more severely, depletion of surface water, thereby, reducing the carrying capacity of the earth. Since this model unifies the conflicting paradigms of economic theories and resolves the most confusions of economic modeling, it can be used for getting clear guidelines for transiting from a growth based economy to a sustainable economy, while solving our macro and micro-economic challenges in real time.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic Theory, General Equilibrium, Biased Equilibrium, Neoclassical Economics, Institutional Economics, Information Economics
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B41 - Economic Methodology; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B52 - Institutional ; Evolutionary; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B59 - Other; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D85 - Network Formation and Analysis: Theory; P - Economic Systems > P1 - Capitalist Systems > P10 - General

References

Amadeo, Kimberly (2018), "U.S. Debt by President: By Dollar and Percent: Why the Winner is...Barack Obama", The Balance, https://www.thebalance.com/us-debt-by-president-by-dollar-and-percent-3306296 Retrieved on April 23, 2018.

Bakan, Joel. (2008), “The Externalizing Machine” The Corporate Responsibility Reader: Context and Perspectives, Jon Burchell, ed., pp. 52-60, Routledge, Available at SSRN: https://ssrn.com/abstract=1517439

BloombergBusiness (2015), "The China Bubble Is Going to Burst", June 16, 2015, http://www.bloomberg.com/news/articles/2015-06-16/china-bubble-debate-turns-to-when-not-if-stocks-will-tumble Retrieved on: July 23, 2015

Carpenter, David. Murphy, Edward and Murphy Maureen. (2016), "The Glass-Steagall Act: A Legal and Policy Analysis", Congressional research Service, January 19, 2016 https://fas.org/sgp/crs/misc/R44349.pdf

CBC News (2015), “Historic' Paris climate deal adopted”, CBC News, December 12, 2015, http://www.cbc.ca/m/touch/canada/montreal/story/1.3362354 Retrieved on December 12, 2015

Childs, David. (2006). “Britain since 1945: A Political History”, Taylor & Francis. ISBN 978-0-415-39326-3.

Davies, Howard (2013), "Margaret Thatcher and the ‘Big Bang’", The Japan Times, https://www.japantimes.co.jp/opinion/2013/04/18/commentary/world-commentary/margaret-thatcher-and-the-big-bang/#.Wt4bNYjwY2w Retrieved on April 23, 2018.

Evans, Charles. (2014) "Patience Is a Virtue When Normalizing Monetary Policy", Speech by, Federal Reserve Bank of Chicago, 24 September, 2014 http://www.chicagofed.org/webpages/publications/speeches/2014/09-24-14-charles-evans-patience-monetary-policy-peterson-institute.cfm

Friedman, Milton (1968). "The role of monetary policy". American Economic Review 68 (1): 1–17. JSTOR 1831652

Heinberg, Richard (2015), “Afterburn: Society Beyond Fossil Fuels”, New Society Publishers, Canada, January 2015.

IPCC Synthesis Report (2007), Fourth Assessment Report, Chapter 1 Observed changes in climate and their effects, in IPCC AR4 SYR. http://www.ipcc.ch/publications_and_data/ar4/syr/en/mains1.html

Jericho, Greg. (2014) "China's housing market is on the brink of collapse. Should Australia be worried?" The Guardian, 8 September 2014, http://www.theguardian.com/business/grogonomics/2014/sep/08/why-a-collapse-in-chinas-housing-market-will-hurt-australia Retrieved on 22 December 2014

Kennedy, John F. (1963), “A Strategy of Peace”, Commencement Address at American University, June 10, 1963, John F. Kennedy Presidential Library and Museum, http://www.jfklibrary.org/Asset-Viewer/BWC7I4C9QUmLG9J6I8oy8w.aspx Retrieved on February 10, 2016.

Karaagac, John (2000). Ronald Reagan and Conservative Reformism. Lexington Books. p. 113. ISBN 0-7391-0296-6. http://books.google.com/books?id=ZFhGnjKqjgAC&pg=PA113

Kumar, Nikhil (2015) "India’s Need for Coal-Fueled Growth Complicates Paris Climate Summit", Time, December 1, 2015, http://time.com/4131236/india-coal-climate-change-paris-summit/ Retrieved on December 8, 2015

Krugman, P. and A. Venables (1995), Globalization and the Inequality of Nations, Quarterly Journal of Economics, 110, 857-880.

Krugman, Paul (2008). “The Conscience of a Liberal”, New York, WW Norton; Reprint edition, December 23, 2008.

Laffer, Arthur (2004) "The Laffer Curve, Past, Present and Future." Heritage Foundation, http://www.heritage.org/research/reports/2004/06/the-laffer-curve-past-present-and-future Retrieved on: February 27, 2014

Marshall, Alfred (1920). “Principles of Economics”, London: Macmillan; reprinted by Prometheus Books.

Marx, Karl. (1859), “A Contribution to the Critique of Political Economy, Das Kapital," Edition and introduction by Maurice Dobb, Intl Pub, April 1, 1979.

Minsky, H.P. (1992), “The Financial Instability Hypothesis”, Working Paper No. 74, Handbook of Radical Political Economy.

Morgan, Faith. (2006) “The Power of Community: How Cuba Survived Peak Oil”, a documentary film directed by Faith Morgan, 2006, Community Solutions: The Arthur Morgan Institute for Community Solutions, https://www.youtube.com/watch?v=L2TzvnRo6_c, Retrieved 20 April, 2015

Nash, John. (1951), "Non-Cooperative Games," The Annals of Mathematics 54(2):286-295.

National Research Council (2011), "Climate Stabilization Targets: Emissions, Concentrations, and Impacts over Decades to Millennia", p.5 National Academies Press, Mar. 11, 2011, https://www.nap.edu/read/12877/chapter/3#5 Retrieved April 23, 2018

Newman, Rick (2018), "Trump’s halfhearted infrastructure plan", Yahoo Finance, February 11, 2018, https://finance.yahoo.com/news/trumps-half-hearted-infrastructure-plan-220006903.html Retrieved: April 18, 2018

Noah, Timothy (2011), "The United States of Inequality". Slate, September 7, 2010, http://www.slate.com/articles/news_and_politics/the_great_divergence/features/2010/the_united_states_of_inequality/did_immigration_create_the_great_divergence.html Retrieved on: January 17, 2014.

North, Douglass C., (1994), “Economic Performance through Time”, American Economic Review, Vol.84, No.3, pp-359-368.

Oswaks, Molly (2012), "The iPhone 5 Costs $8 More to Build Than it Does to Buy (UPDATED)", Sep.19, 2012 http://gizmodo.com/5944446/the-iphone-5-costs-8-more-to-build-than-it-does-to-buy

Phelps, Edmund S. (1968). "Money-Wage Dynamics and Labor Market Equilibrium". Journal of Political Economy 76 (S4): 678–711.

Phillips, A. W. (1958). "The Relationship between Unemployment and the Rate of Change of Money Wages in the United Kingdom 1861-1957". Economica 25 (100): 283–299

Pluta, Joseph E. (2011), “Human Progress Amid Resistance to Change,” FriesenPress, Victoria, BC, Canada, April, 2011.pp-149-183

Quigley, Carroll (1966), "Tragedy and Hope: A History of The World in Our Time", The Macmillan Company, New York, pp.39.

Rawski, G. Thomas et al. (2008), "China's Industrial Development", China's Great Transformation, Cambridge university press. P.588-593

Ricardo, David (1817), "The Principles of Political Economy and Taxation", Dover Publications, June 11, 2004

Roberts, Paul Craig (August 7, 2003). Jobless in the USA Newsmax, http://archive.newsmax.com/archives/articles/2003/8/6/132901.shtml, retrieved July 23, 2015

Sachs, Jeffrey (1998). "The real causes of famine: a Nobel laureate blames authoritarian rulers". Time Magazine, http://content.time.com/time/magazine/article/0,9171,989405,00.html Retrieved on 16 June 2014

Saez, Emmanuel and Piketty, Thomas (2003), Quarterly Journal of Economics, 118(1), 2003, 1-39. Data (and updates) available and shown here: http://inequality.org/income-inequality

Sen, Amartya (1981), "Poverty and Famines: An Essay on Entitlement and Deprivation", Clarendon Press, Oxford

Shapiro, C. and Stiglitz, J. (1984), “Equilibrium unemployment as a worker discipline device,” American Economic Review, June 1984.

Stiglitz, Joseph E. (2000), “The Contributions of the Economics of Information to Twentieth Century Economics”, The Quarterly Journal of Economics, November 2000, p-1441-1478.

Tregarthen, T. D., & Rittenberg, L. (2000), “Markets, maximizers and efficiency,” Economics. Worth Publishers, New York, https://www.saylor.org/site/wp-content/uploads/2012/06/ECON101-3.1.pdf

Ubel Peter (2014), "Is Homo Economicus A Psychopath?", Forbes, https://www.forbes.com/sites/peterubel/2014/12/15/is-homo-economicus-a-psychopath/#7d8572861604

US Debt Clock.org http://www.usdebtclock.org/, April 19, 2018 10:30 AM

Veblen, Thorstein. (1899), " The Theory of the Leis”ure Class: An Economic Study of Institutions” Republished in 1934 with Introduction by Stuart Chase. New York: The Modern Library.

Yan, Hongliang. (2017), "Heritage Tourism in China: Modernity, Identity and Sustainability", Channel View publications, Bristol, United Kingdom.

Yeager, Timothy J., Fred C. Yeager, and Ellen Harshman (2007). "The Financial Services Modernization Act: Evolution or Revolution." Journal of Economics and Business 59, no. 4 (July-August 2007): 313- 39.

Zaman, Monowaruz. (2001), "Greenhouse care-a proposal of a new economic development model for the poorest people of an economy," Journal of Business Administration, Vol. 27, Nos. 3/4.

Zaman, Monowaruz. (2009), “Welfare Dynamics Based on a New Concept of Inefficient Equilibrium,” Oxford Business and Economics Conference, Oxford University.

Zaman, Monowaruz. (2010), "Economics of Information Biasing and Its Application for Poverty Alleviation," VDM Verlag Dr. Müller e.K., Germany.

Zaman, Monowaruz. (2012a), “A Consolidated Economic Model Based on a New Concept of Biased Equilibrium," International Journal of Green Economics 2012 - Vol. 6, No.1 pp. 55 - 72.

Zaman, Monowaruz. (2012b), “Greenhouse care economics: a solution to the capitalist's dilemma," International Journal of Green Economics 2012 - Vol. 6, No.2 pp. 189 - 204.

Zaman, Monowaruz (2012c) "An Auto-Adjust (A2) Strategy for Green Economics to Encounter ‘Peak Oil’ Crisis", Green Economics: The Greening of Energy Policies”, Edited by Ryota Koike, Miriam Kennet, The Green Economics Institute, August 30, 2012

Zaman, Monowar (2016), “Green The Capitalists," Author House, Bloomington, Indiana, United States.