One alleged advantage of credit theories of knowledge is that they are capable of explaining why knowledge is essentially more valuable than mere true belief. I argue that credit theories in fact provide grounds for denying this claim and therefore are incapable of overcoming the ‘value problem’ in epistemology. Much of the discussion revolves around the question of whether true belief is always epistemically valuable. I also consider to what extent, if any, my main argument should worry (...) class='Hi'>credit theorists. (shrink)

In a recent monograph, Sandy Goldberg argues that epistemology should be renovated so as to accommodate the way in which human beings are dependent on others for what they know. He argues that the way to accomplish this is to consider the cognition of others to be part of the belief-forming process for the purposes of epistemic assessment when radical dependence on others is in evidence. In this paper, I argue that, contrary to what one may expect, a credit (...) theory of knowledge is well positioned to make the sort of anti-individualistic move that Goldberg advocates. Furthermore, unlike Goldberg's extended process reliabilism, an extended credit theory has a theoretically motivated way of restricting the domain of epistemic evaluation to the cognitive. Finally, I argue that, although adopting the extended cognition hypothesis would help Goldberg's position, an extended credit theory would still have the advantage. (shrink)

In this paper, I show that Polleit and Mariano (2011) are right in concluding that Credit Default Swaps (CDS) are per se unobjectionable from Rothbard’s libertarian perspective on property rights and contract theory, but that they fail to derive this conclusion properly. I therefore outline the proper explanation. In addition, though Polleit and Mariano are correct in pointing out that speculation with CDS can conceivably hurt the borrowers’ interests, they fail to grasp that this can be the case (...) only in some peculiar circumstances that I identify. In other words, they miss the bigger picture, the one outside special circumstances, in which CDS trading has the opposite effect. That is, CDS facilitate debt accumulation, including government debt accumulation. Finally, I point out how this can precipitate the collapse of fiat money regimes. An incidental goal of the analysis is to provide a better account than Polleit and Mariano of recent government interventions in and around CDS markets. (shrink)

In the so-called “international credit market crisis,” which started in the second half of 2007 in the US subprime mortgage market, financial derivatives, most notably credit default swaps (CDS), have been publically blamed for having caused, or at least aggravated, the economic and monetary debacle. However, sound economic [...].

The notion of credit plays a central role in virtue epistemology and in the literature on moral worth. While virtue epistemologists and ethicists have devoted a significant amount of work to providing an account of creditable success, a unified theory of credit applicable to both epistemology and ethics, as well as a discussion of the general form it should take, are largely missing from the literature. Our goal is to lay out a theory of credit (...) that seems to underlie much of the discussion in virtue epistemology, which we dub the Cake Theory. We argue that given the goals that virtue epistemologists and ethicists who discuss moral worth have, this theory is problematic, for it makes credit depend on the wrong facts. (shrink)

This paper evaluates the economic assumptions of economic theory via an examination of the capitalist transformation of creditor–debtor relations in the 18th century. This transformation enabled masses of people to obtain credit without moral opprobrium or social subordination. Classical 18th century economics had the ethical concepts to appreciate these facts. Ironically, contemporary economic theory cannot. I trace this fault to its abstract representations of freedom, efficiency, and markets. The virtues of capitalism lie in the concrete social relations (...) and social meanings through which capital and commodities are exchanged. Contrary to laissez faire capitalism, the conditions for sustaining these concrete capitalist formations require limits on freedom of contract and the scope of private property rights. (shrink)

Contemporary general equilibrium theory is characteristically short-run, separated from monetary aspects of the economy, and as such does not deal with long-run problems such as capital accumulation, innovation, and the historical movement of the economy. These phenomena are discussed by growth theory, which assumes a given or shifting production function, and in turn cannot therefore deal with the fundamental problem of growth, namely how the production function is derived. Thus traditional theories have a common weakness in that they (...) divorce real economic growth from the activities of the financial sector. This book provides a much-needed synthesis of growth theory and monetary theory. Professor Morishima draws on the work of Schumpeter, Keynes and the pre-war neoclassical economists to formulate a capital-theoretic general equilibrium theory. (shrink)

This book is the definitive scholarly work on money, credit and macroeconomics for the twenty-first century. Nine decades ago Keynes claimed to be writing a work that would “largely revolutionize the way the world thinks about economic problems”. This is a modern day attempt with the same purpose.

Theories of scientific rationality typically pertain to belief. In this paper, the author argues that we should expand our focus to include motivations as well as belief. An economic model is used to evaluate whether science is best served by scientists motivated only by truth, only by credit, or by both truth and credit. In many, but not all, situations, scientists motivated by both truth and credit should be judged as the most rational scientists.

To this day, many theorists regard the commodity theory and the credit theory as the two main rival accounts of the nature of money. Yet cryptocurrency has revolutionized the institution of money in ways that most commodity and credit theorists could hardly have anticipated. Given that cryptocurrency is a new form of money, the question arises whether the commodity and credit theories can adequately account for it. I argue that they cannot. I first offer an (...) interpretation of the commodity and credit theories according to which these theories uphold differing claims about the origin of money, the ontology of money, and the function of money. I then argue that thus understood, neither theory can accommodate cryptocurrency. Finally, I develop a novel hybrid hylomorphic account of money which draws on aspects of both the commodity and credit theories, and I argue that this hybrid account can accommodate cryptocurrency. (shrink)

According to credit theories of knowledge, S knows that p only if S deserves credit for truly believing that p. This article argues that any adequate credit theory has to explain the conditions under which beliefs are attributable to subjects. It then presents a general account of these conditions and defends two models of cognitive agency. Finally, the article explains how an agent-based approach rescues the credit theory from an apparent counterexample. The article's defense (...) of the credit theory is qualified, however, for one lesson that emerges is that credit theories are theories of subjective justification, not theories of knowledge. (shrink)

The Credit Theory of Knowledge (CTK)—as expressed by such figures as John Greco, Wayne Riggs, and Ernest Sosa—holds that knowing that p implies deserving epistemic credit for truly believing that p . Opponents have presented three sorts of counterexamples to CTK: S might know that p without deserving credit in cases of (1) innate knowledge (Lackey, Kvanvig); (2) testimonial knowledge (Lackey); or (3) perceptual knowledge (Pritchard). The arguments of Lackey, Kvanvig and Pritchard, however, are effective only (...) in so far as one is willing to accept a set of controversial background assumptions (for instance, that innate knowledge exists or that doxastic voluntarism is wrong). In this paper I mount a fourth argument against CTK, that doesn’t rest on any such controversial premise, and therefore should convince a much wider audience. In particular, I show that in cases of extended cognition (very broadly conceived), the most salient feature explaining S ’s believing the truth regarding p may well be external to S , that is, it might be a feature of S ’s (non-human, artifactual) environment. If so, the cognitive achievement of knowing that p is not (or only marginally) creditable to S , and hence, CTK is false. (shrink)

The creditions model is incredibly powerful at explaining both how beliefs are formed and how they influence our perceptions. The model contains several cognitive loops, where beliefs not only influence conscious interpretations of perceptions downstream but are active in the subconscious construction of perceptions out of sensory information upstream. This paper shows how this model is mirrored in the epistemology of two central Buddhist figures, Dignāga and Dharmakı̄rti. In addition to showing these parallels, the paper also demonstrates that by drawing (...) on Dignāga and Dharmakı̄rti's theory, we can extend the explanatory power of the creditions model. Namely, while creditions explain how beliefs influence both the conscious interpretation and subconscious construction of sensory information, Dignāga and Dharmakı̄rti suggest beliefs can even be generative of sensory-like information. I recruit ancient Buddhist texts in conjunction with contemporary cognitive science scholarship to offer a hypothesis for the cognitive mechanisms responsible for this. (shrink)

This article provides an Austrian overview of the inflation versus deflation debate which has captured the attention of the economics profession in the years following the US housing bust. Much of the Austrian analysis of this debate has focused on the massive expansion of the Federal Reserve’s balance sheet and attendant creation of new reserves. Several Austrian economists have predicted that the creation of new reserves will cause a massive increase in inflation. The money multiplier theory, on which these (...) predictions are based, is criticized and an overview of the Austrian business cycle theory is provided to explain why banks are reluctant to issue new credit. Finally, an analysis of the politics of deflation is provided and a class theory is presented to explain why a policy of controlled credit deflation is more likely than a policy that would result in mass inflation or hyperinflation. (shrink)

We take a fresh look at the concerns about credit card pricing and empirically investigate whether the Credit CARD Act of 2009 has been successful in addressing those concerns. The rational choice theory of credit card pricing, which posits that issuers use back-end fees to adjust the price of credit to reflect new information about borrowers’ credit risk, predicts that issuers will respond to the Act by using alternative ways to price risk. In contrast, (...) the behavioral economics theory, which posits that issuers use back-end fees because they are not salient to consumers, predicts that issuers will respond by increasing unregulated non-salient prices. If the market is competitive, we argue that the CARD Act should also result in increases in some salient, up-front prices. But we show that if issuers have market power, reductions in non-salient fees may not result in concomitant increases in salient charges. We test these predictions using two datasets on credit card contract terms before and after the CARD Act rules went into effect. We find that the rules have substantially reduced the back-end fees directly regulated by the Act, including late fees and over-the-limit fees. However, unregulated contract terms, such as annual fees and purchase interest rates, have changed little. Post-CARD Act, consumers continue to face high long-term prices and low short-term prices, and imperfectly rational consumers still find it difficult to understand the cost of credit card borrowing. We thus consider potential improvements to the regulatory framework. We argue that improved disclosures that present to consumers the aggregate cost of credit under the contract, based on information about the borrower’s likely use of credit, would improve consumer outcomes. Furthermore, we suggest that regulators, rather than focusing on prices that are “too high,” should consider limiting the ability of issuers to charge introductory teaser interest rates that are in a sense “too low. (shrink)

Business Ethics, the Environment & Responsibility, EarlyView.

There is no well-built theory on credit risk measurement and decision analysis for financial big data, and an effective and scientific evaluation system for them has not been formed. A review of them can contribute to grasping the abovementioned topics, understanding current issues, analyzing research problems, mastering research challenges, and predicting future research directions. Besides, this paper points out four research directions of credit risk measurement and decision analysis for financial big data. Moreover, this paper can provide (...) some guidance directions and insights for practitioners, researchers, financial institutions, and government departments who have an interest in complex decision-making in big data. (shrink)

American bankruptcy law has offered a "fresh start" in every state for over one hundred years. As a result, econometric studies of consumer bankruptcy often focus on one of the few aspects of the law that has varied significantly across time and across states: exemptions. Professors Gropp, Scholz and White published the first article to test the effect of exemptions on credit markets. Consistent with theory, they found that residents of states with larger exemptions pay higher interest rates (...) than those in states with lower exemptions and face an increased probability that they will be denied credit. These effects were most pronounced for poor households. This result is surprising because exemptions only allow a household to keep what it has. The difference between a $100,000 exemption and an exemption with no dollar limit should not matter if the household has little or no assets to exempt. This essay examines alternative explanations for why exemptions appear to have a disproportionate impact on the poor. Unfortunately, however, none of these alternative explanations proves entirely satisfactory. (shrink)

Adding to contemporary debates about the relationship between financialization and neoliberalism, this article investigates their entanglement at the level of subjectivity. Primarily, the article argues that financialization and neoliberalism are converging to produce a new form of subjectivity, post-profit homo œconomicus, an always indebted but credit-seeking enterprise. The value of this approach, the article demonstrates, is that it provides theoretical tools capable of grasping the differential production of subjectivity across the uneven and unequal striations of contemporary neoliberal society, from (...) precarious workers of the gig economy to financial sector elites. The article examines two figures who have become central to public and academic debates about neoliberalism and financialization – the low-waged, precarious worker and the indebted student – to consider how neoliberal subjectivity is produced and distributed unevenly. It concludes that within these fragmentary socioeconomic positions are different instantiations of always indebted but credit-seeking human capital. (shrink)

Bringing together both established and emerging scholars from critical and cultural theory, literature, philosophy, and theology, this book examines the intersection of economics and religion.

The history of Credit Rating Agencies [CRAs], commonly called Rating Agencies, has a long and distinguished trajectory marked by influence, reputation and power. Due to the ability of this field to instigate significant changes in market regulations and actions of economic actors, this subject is extensively debated within the literature. In economic sociology, while some studies have focused on perceptions of performativity and market devices to understand how the calculability of its methods influences the economy, others, along relational lines (...) of sociology, aim to understand them through a more complex constructive process. In this study, we attempt to fill a gap by exploring the complementarity between two theoretical approaches to sociology: theory of fields and performativity. Thus, we mobilize theory of fields to understand the inter-field relationship between the State and CRAs. Specifically, this paper sets out to i) analyze the co-constitution of the state and market fields with the field of CRAs; ii) describe the existing regulation and situate the CRAs and their classification devices in the broader history of the State and the market; iii) analyze how the legitimation of the CRAs by the State generates broader social contexts that assist in the performative work of the CRAs. Based on historical documentary research, we analyze some of the main milestones and regulatory events in the field of CRAs. This research reaffirms the assumption that even after credibility crises, the State is the most significant predictor of legitimacy, power, and influence that CRAs hold to date. The legitimacy of this power and influence has yet to be exhausted because the reputation of CRAs is rooted in the reputation of the State itself. This happens because the State provides essential actions (such as regulations) for the existence of the financial market. Thus, results suggest that the State, through regulatory measures, can engage several other fields to promote the legitimacy of performative work of the CRAs, whose purpose is to provide calculation tools to shape markets. (shrink)

Racial capitalism depends on the reproduction of an existing racialized economic order. In this article, I argue that the disavowal of past injustice is a central way in which this reproduction is ensured and that market-based forms of knowledge production, such as for-profit predictive practices, play a crucial role in facilitating this disavowal. Recent debates about the fairness of algorithms, data justice, and predictive policing have intensified long-standing controversies, both popular and academic, about the way in which statistical and financial (...) modes of accounting and predicting articulate, represent and produce ascriptive categories of hierarchically ordered social difference, and reproduce unjust social hierarchies and inequalities. These debates have productively problematized the racial lives of seemingly apolitical predictive technologies and demanded the re-politicization of predictive practices. What has been missing from these debates so far, however, is a more explicit engagement with ways in which anti-racist movements and activists themselves have contested the entanglements of prediction and race making. I turn to a recent prominent example, namely the contestation over racial discrepancies in subprime lending to examine how fair lending activists have conceptualized and troubled the reproduction of a racialized economic order through for-profit predictive practices in the decade before the Great Financial Crisis. I situate this particular example in the broader historical and political context of politicizing prediction that first emerged with the ascendancy of a liberal, individualist-proprietary conception of risk, and the political problem space to which this has given rise. My analysis shows that actuarial conceptions of fairness continue to reverberate in anti-racist contestations of for-profit predictive practices, and that they tend to marginalize and undercut more radical strands of critique of the racialization of financial markets. Insofar as these modalities of contestation implicitly reproduce a liberal, proprietary-individualist conception of risk, I argue, they fail to effectively challenge the quasi-alchemical transformation of injustice into personal responsibility, and thus contribute to the disavowal of past injustice. (shrink)

This Experian Corporate Social Responsibility (CSR) report case study was informed by the 3Ps of sustainability along with legal, ethical, economic, and philanthropic CSR practices. Text network analysis yielded keywords, an overall theme, and 15 sub-themes. In its CSR report, Experian described and emphasised how its services can help consumers develop and protect their financial identity, which lead to greater choices, opportunities, and a sustainable quality life. At the same time, some of Experian's business practices suggest a misalignment with stated (...) strategic goals and practices. This research is unique in that it examines CSR reporting of an organisation in which its key stakeholders are both customers and the product at the same time, making them vital to the company's existence. Results suggest how legitimacy theory and lack of disclosing negative events are deployed to maintain credibility between the organisation and these essential stakeholders. (shrink)

In this paper I defend the theory that knowledge is credit-worthy true belief against a family of objections, one of which was leveled against it in a recent paper by Jennifer Lackey. In that paper, Lackey argues that testimonial knowledge is problematic for the credit-worthiness theory because when person A comes to know that p by way of the testimony of person B, it would appear that any credit due to A for coming to believe (...) truly that p belongs to the testifier, B, rather than the hearer, A. If so, then knowledge would appear not to be a matter of credit for true belief. I think that the problem this raises actually has little to do with the fact that the knowledge comes by way of testimony, and that similar objections can be formulated in terms of perceptual and memorial knowledge. I will attempt to neutralize these objections by drawing a distinction between credit as praiseworthiness and credit as attributability. (shrink)

Following recent debates on the New Neoclassical Synthesis, the theory of monetary policy has been renewed. The prevailing method, illustrated by Woodford's version of Interest and Prices, is a Dynamic Stochastic General Equilibrium Model in which the old LM curve is voluntarily substituted by an optimal monetary rule. Such a turning point requires a peculiar set of assumptions, especially regarding monetary prices. The recent debate pays attention to de-emphasis on the nominal monetary aggregate, which does not play any explicit (...) role in monetary policy deliberations. Following Calvo's model, Woodford's neo-Wicksellian framework only considered monetary prices in equilibrium. This article demonstrates that even though the New Neoclassical Synthesis considers it essential to have a monetary theory for policymaking, the former offers the same answers as the traditional static macroeconomics. More precisely, it shows that the use of dynamic optimisation – such as the one developed by Woodford's approach – does not contribute in a decisive way to improving our understanding of the role that money prices play in monetary theory. Woodford's canvas is silent about the mechanisms whereby monetary policy induces agents to adjust individual money prices to the values that generate an equilibrium price level. Thus, if we want to close this gap, it may be useful to consider a 'forward guidance' strategy. By means of such a tool, central bankers are able to shape the public's expectations on economic outcomes by pre-announcing the time path of future policy actions. (shrink)

This book develops a metaphysics which is missing when trust is ordered around economic theories and institutions.

According to robust virtue epistemology, the difference between knowledge and mere true belief is that in cases of knowledge, the subject’s cognitive success is attributable to her cognitive agency. But what does it take for a subject’s cognitive success to be attributable to her cognitive agency? A promising answer is that the subject’s cognitive abilities have to contribute to the safety of her epistemic standing with respect to her inquiry, in order for her cognitive success to be attributable to her (...) cognitive agency. Call this idea the contribution thesis. The author will argue that the contribution thesis follows naturally from virtue epistemological accounts of knowledge, and that it is precisely the contribution thesis that allows the virtue epistemologist to deal with a wide variety of objections. Nevertheless, the principal aim of this paper is to argue that virtue epistemological theories of knowledge that are committed to the contribution thesis are ultimately untenable. There are cases of knowledge where the subject’s cognitive abilities do not improve the safety of the subject’s belief. (shrink)

Whom should we credit for the discovery of isotopes? The first suggestion of an idea, the first experimental proof, or the development of a new method that clearly reveals the isotopes? Strömholm and Svedberg, Fajans and Soddy interpreted patterns of radioactive decay, which became confirmed theory on the solid basis of the very accurate atomic weight determinations by Richards and his coworkers. The mass spectrograph measurements by Aston provided major extension of the concept of isotopes to much of (...) the rest of the periodic table. Thus, Strömholm and Svedberg, Fajans and Soddy provided an idea, which Richards proved, and Aston made generally useful. Richards should be listed along with Fajans, Soddy, and Aston for fundamental contributions to establishing isotopes as part of the modern language of science. As much credit should be given to the experimental proof as to the suggestion or naming of the concept. (shrink)

Whom should we credit for the discovery of isotopes? The first suggestion of an idea, the first experimental proof, or the development of a new method that clearly reveals the isotopes? Strömholm and Svedberg, Fajans and Soddy interpreted patterns of radioactive decay, which became confirmed theory on the solid basis of the very accurate atomic weight determinations by Richards and his coworkers. The mass spectrograph measurements by Aston provided major extension of the concept of isotopes to much of (...) the rest of the periodic table. Thus, Strömholm and Svedberg, Fajans and Soddy provided an idea, which Richards proved, and Aston made generally useful. Richards should be listed along with Fajans, Soddy, and Aston for fundamental contributions to establishing isotopes as part of the modern language of science. As much credit should be given to the experimental proof as to the suggestion or naming of the concept. (shrink)

Whom should we credit for the discovery of isotopes? The first suggestion of an idea, the first experimental proof, or the development of a new method that clearly reveals the isotopes? Strömholm and Svedberg, Fajans and Soddy interpreted patterns of radioactive decay, which became confirmed theory on the solid basis of the very accurate atomic weight determinations by Richards and his coworkers. The mass spectrograph measurements by Aston provided major extension of the concept of isotopes to much of (...) the rest of the periodic table. Thus, Strömholm and Svedberg, Fajans and Soddy provided an idea, which Richards proved, and Aston made generally useful. Richards should be listed along with Fajans, Soddy, and Aston for fundamental contributions to establishing isotopes as part of the modern language of science. As much credit should be given to the experimental proof as to the suggestion or naming of the concept. (shrink)

We draw on the phenomenon of caste-based discrimination in India and signaling theory to assess whether microfinance credit scores improve the odds of female micropreneurs from a lower caste receiving loans and whether visible business characteristics further improve the odds of receiving microfinance loans. In a sample of 3,144 female microfinance loan applicants at a female-focused microloan enterprise in India, females from a lower caste, relative to those from a higher caste, have lower odds of receiving loans when (...) their credit scores are below the mean. However, when females from a lower caste have credit scores higher than the mean, the odds of receiving a loan increase. The practical effect of size is small but meaningful. Loan applicants from a lower caste with a visible signal of business ability do not improve their chances of receiving a loan relative to those from a higher caste. (shrink)

To deserve credit for doing what is morally right, we must act from the right kinds of motives. Acting from the right kinds of motives involves responding both to the morally relevant reasons, by acting on these considerations, and to the morally relevant individuals, by being guided by appropriate attitudes of regard for them. Recent theories of the right kinds of motives have tended to prioritize responding to moral reasons. I develop a theory that instead prioritizes responding to (...) individuals (through appropriate attitudes of regard for them) and argue that it better accounts for the basic features of the right kinds of motives – what we most fundamentally care about in judging whether persons deserve moral credit. (shrink)

Credit theorists claim to explain the incompatibility of luck and knowledge and also what makes knowledge valuable. If the theory works as well as they think, it accomplishes a lot. Unsurprisingly, however, some epistemologists remain unsure. Jennifer Lackey, for instance, proposes a dilemma that suggests credit theories are either too strong or too weak. Her criticism has been hard to overcome. This paper suggests a modified account of knowledge as credit for true belief that allows (...) class='Hi'>credit theorists to better counter Lackey’s criticism. I call my version of credit theory Risk Sensitive Credit. Under my account, an agent deserves credit just in case she believes truly on account of her reasonably accurate epistemic risk assessment. This assessment need not include higher order beliefs or even enter into conscious thought. Recent work in cognitive science, for instance, suggests that our visual faculties, in the absence of our direct awareness, work in accordance with a risk sensitive framework. This research will be referenced to help explain the dynamics of barn facade Gettier cases. (shrink)

Credit distribution is uneven in the domestic financial market since it is relatively easy for listed companies, mainly state-owned enterprises, to obtain banks’ funds. Unbalanced credit distribution has caused some listed companies to participate in “Borrow to Lend” activities. Based on the traditional “financing priority” theory and credit rationing theory, this paper studies the “Borrow to Lend” shadow banking activities of China’s non-financial listed companies based on the 2007–2018 financial statement data of Chinese-listed companies and (...) discusses the micro-level and macro-level related factors behind this activity. The empirical results show that China’s non-financial listed companies, especially the state-owned enterprises, are participating in obvious “Borrow to Lend” activities. The real economy’s rate of return shows a negative relationship with “Borrow to Lend” activities at the level of individual companies and their industries. This article uses the exogenous growth part of M2 growth to measure monetary policy tightness in terms of macro and credit policies. It uses the ratio of state-owned enterprise loans to total corporate loans as an approximate indicator of the credit distribution structure. The empirical results indicate that state-owned enterprises’ “Borrow to Lend” activities have shifted in the same direction as the tightening of monetary policy after the financial crisis. The proportion of state-owned enterprise loans positively correlates with state-owned enterprises’ “Borrow to Lend” activities. (shrink)

We study the effect of scarcity on decision making by low income Swedes. We exploit the random assignment of welfare payments to study their borrowing decisions within the pawn and mainstream credit market. We document that higher educated borrowers borrow less frequently and choose lower loan to value ratios when their budget constraints are exogenously tighter. In contrast, low-educated borrowers do not respond to temporary elevated levels of scarcity. This lack of response translates into a significantly higher probability to (...) default and an 11.6% increase in borrowing cost. We show that a difference in access to liquidity and/or buffer stocks cannot explain our results. Instead a framework, where the awareness of self-control problems is positively correlated with education can explain that high-educated consumers choose a lower LTV as a commitment device to increase their likelihood to repay. Analogously, low-educated with less awareness of their future self-control problems, do not tie themselves to the mast and thus ignore the consequences of their credit decisions when focusing on solving acute liquidity problems. Our findings highlight that increased levels of scarcity risk reinforcing the conditions of poverty through overborrowing. (shrink)

We attempt in this paper to tie together several basic insights of praxeology, and several that are not at all that basic. These include the following: that gains from exchange are subjective; that this applies to profits and interest; that credit transactions can occur under barter; that interest arises from time preference even under a pure time preference theory of interest; and that productivity can, under disequilibrium conditions, affect the various rates of interest.

This article concerns freedom and financial markets. First, I consider the republican case for liberalization, extending Robert Taylor’s economic model of republicanism to financial markets. This case adopts what I call a “philosopher-king” approach to political theory, arguing by reference an ideal or first-best set of policies or reforms. Then, I investigate the negative externalities of several decades of financial market liberalization, including the erosion of political accountability and the growing concentration of political and economic power in the hands (...) of those best suited to profit from the rise of finance. From this “political economy” perspective, the impact of liberalization is clear: we paid for greater access to credit with political and economic domination. In republican terms, we traded freedom for credit. My analysis, moreover, has implications for republican debates on freedom and the market. In second-best worlds, where reforms will almost certainly be incremental, shaping the balance of power in ways that impact future policy, judging reforms by reference to a vision of domination-free markets will often suggest policies that make individuals less free. The political economy approach is far more relevant to debates about which economic institutions further or hinder freedom as non-domination. (shrink)

We investigate the association between a wide range of community-level environmental, social, and governance (ESG) outcomes and the credit risk of U.S. municipal finance fixed-income securities. We develop a novel dataset of multiple ESG outcomes for U.S. counties and connect it to a 2001-2020 panel of municipal bonds issued within those counties. Overall, we find supportive evidence that collective increases in community-level ESG factors (i.e., ESG outcomes) are associated with reductions in credit risk for U.S. municipal finance instruments (...) over time. We theorize that these associations arise from variations in investor perceptions and manifested changes in fiscal health over time as a function of changing ESG outcomes. Post hoc analyses leveraging quasi-exogenous shocks to uncertainty, as well as connecting ESG outcomes to various measures of fiscal health at the county-year level, and credit ratings at the bond-year level, help validate this theory. Our research suggests that even socially agnostic investors should investigate the environmental and social performance of a municipality as part of their credit due diligence. (shrink)

Supply chain financing guaranteed by third-party logistics firms is an effective way to solve the financing difficulties of small and medium-sized enterprises. Studies have explored factors that affect the willingness of supply chain financial credit providers under guarantee of 3PL firms. However, whether the scale of 3PL firms will affect the bank’s credit decision has not been studied, as well as the neural processing of credit decisions. To clarify these issues, this study extracted behavioral and event-related potentials (...) data when participants performed a selection task of judging whether to grant credit to guaranteed financing-seeking enterprises according to the large or small scale of the 3PL guaranteeing firms. The behavioral results showed that under the condition of a large-scale 3PL guaranteeing firm, the willingness to provide credit to SMEs was higher than that under the condition of a small-scale 3PL guaranteeing firm. This finding indicates there was credit scale discrimination against 3PL guaranteeing firms in supply chain finance. The ERP results showed that compared with the condition of a large-scale 3PL guaranteeing firm, a greater N2 amplitude was induced under the condition of a small-scale 3PL guaranteeing firm, which indicated that credit decision makers experienced greater perceived risk and more decision-making conflict. In contrast, a larger LPP amplitude was detected under the condition of a large-scale 3PL guaranteeing firm, which indicated that large-scale 3PL guaranteeing firms received more positive comments and more positive emotions from credit decision makers than small-scale 3PL guaranteeing firms. Based on these results, this study reveals the cognition process of credit decision makers regarding the impact of the 3PL guaranteeing firm scale on the willingness to provide credit in supply chain finance and explains the theory of credit scale discrimination from the perspective of decision neuroscience. (shrink)

In this paper I'm interested in the prospects for the Right Reasons theory of creditworthiness. The Right Reasons theory says that what it is for an agent to be creditworthy for X-ing is for that agent to X for the right reasons. The paper has a negative goal and a positive goal. The negative goal is to show that a class of Right Reasons theories are doomed. These theories all have a Conceptualization Condition on acting for the right (...) reasons. Conceptualization Conditions demand that agents who act for the right reasons deploy or be able to deploy certain normative concepts in acting. I argue that views of this type run into a host of overintellectualization problems. The positive aim is to argue for my Right Reasons view, which appeals to know-how to avoid overintellectualization. (shrink)

David Hull’s book (1988) provides an evolutionary account of the development of science which pays attention to both the social and conceptual aspects of that process. Unlike most philosophers who only invoke Darwinian metaphors in a casual way, Hull takes the analogy between the biological evolution of species and the growth of scientific knowledge quite seriously and by providing abstract definitions of terms such as replicator, interactor and lineage, he makes it possible for us to see clearly the structural similarities (...) between the two historical processes.Other symposiasts will comment on how tight that analogy really is. I must remark in passing that I have never understood the intense interest which evolutionary epistemologists take in this comparison. Surely our major job is to understand how science works, perhaps by using evolutionary theory as a fallible heuristic, but nothing seems to hinge on the extent of the formal analogy. (shrink)

Scholars belong to multiple communities of credit simultaneously. When these communities disagree about a scholarly achievement’s credit assignment, this raises a puzzle for decision and game theor...