In one of the most original papers published in <i>Challenge,</i> Hendrik Van den Berg and Matthew Van den Berg try to determine whether markets are really complete enough to make the invisible hand a relevant concept. They attempt to calculate what proportion of our transactions does qualify. Some...

The invisible hand metaphor dates to the 18th century but only gained prominence after neoclassical analysis came to dominate economic thinking late 19th century. Neoclassical economists rigorously established the assumptions necessary for an economy to operate in accordance with the metaphor,...

This paper offers a sociological explanation for why the field of economics has so severely restricted the scope of its analysis to the point where it failed to foresee the financial crises, economic recessions, and other large shifts in economic activity that have characterized the global...

Part I of this essay explained the sequence of events that enabled the neoclassical paradigm to regain its dominant position in mainstream economics following serious challenges by ‘Keynesian’ economists. This second essay seeks to answer the question of why the economics profession was so...

Economic thought evolved over the past two centuries to focus on individual behavior as the basis for all economic activity. Some heterodox economists have pointed to the importance of group behavior and the influence of organizations on economic activity, but the neoclassical paradigm, with the...

Despite interest in the influence of religion on economic activity by early economists like Adam Smith, modern economists have done little research on the subject. In light of the apparent religious fervor in many parts of the global economy, economists' seeming lack of interest in studying how...

Tests for the presence of Leviathan, evidenced by a positive relationship between the size of government measured as a percentage of GDP, and the degree of fiscal centralization, have provided mixed results. We derive alternative measures of the size of government taking into account household...

The estimated static welfare gains from international trade are very small, on the order of one percent of GDP. The case for free trade is therefore increasingly linked to trade's apparent positive effects on economic growth. But how large are these growth effects&quest; The vast empirical literature...

Research has often focused on how foreign direct investment (FDI) transfers technology from developed economies to less developed economies. Most FDI occurs between developed economies, however, and the country receiving the greatest inflow of FDI is the United States. This paper examines...

This paper is an empirical test of the hypothesis suggested by Mazumdar (1996), namely, that the composition of trade determines the strength of the 'engine of growth'. Mazumdar suggested that, within the framework of the Solow model, the composition of trade affects the medium-run transition to...