Daron Acemoglu et consortes – GIGO6 October, 2012 at 17:36 | Posted in Economics, Theory of Science & Methodology | 4 Comments
Daron Acemoglu, James Robinson and Thierry Verdier recently made public a paper – Can’t We All Be More Like Scandinavians? – comparing the effects on innovation of Europe’s “cuddly” capitalism to the “cutthroat” capitalism of U.S.
True to the standard modelling endeavours of neoclassical economics they among a lot of other handy assumptions made this one:
We assume that workers can simultaneously work as entrepreneurs (so that there is no occupational choice). This implies that each individual receives wage income in addition to income from entrepreneurship
Hmm, and I – a Scandinavian economist – who thought that including those occupational choices and the effects of social safety nets in the form of social insurance would be essential to get at the core of entrepreneurial risk and innovative aspirations…