Emil Dinga
Emil Dinga
Economist, Ph.D., the Romanian Academy, President of the Romanian Society for Economics Philosophy, with expertise in the epistemology, philosophy and logic of economics
Should the State Adjust the Market? The Case of ROBOR

Should the State Adjust the Market? The Case of ROBOR

The duel between state and market is an old story in the debates regarding the best way to run society. Of course, there are both extremists and moderates in this debate. I am not interested in covering the large array of opinions, but in exploring the essence of the issue. More precisely, I am interested in whether the state has a legitimate role in adjusting the macroeconomic variables generated by the free market and, to a finer degree, to see if we have thresholds or intensities or other contingencies in accepting or requesting the state's intervention in the market (viewed as a free market). More


Some Thoughts on the Criteria of Nominal Economic Convergence in the EU

Some Thoughts on the Criteria of Nominal Economic Convergence in the EU

In connection with the nominal economic convergence criteria, five comments can be made: a) on their completeness; b) on their representativeness; c) on their relevance (meaning); d) on their redundancy (non-synergy); e) on their effectiveness.  More


What Kind of Innovation Do We Need?

What Kind of Innovation Do We Need?

The morality of capitalism is, without a doubt, based on the value called to have (money, goods, power, social position, and so on) – and to have-to be is intensely debated in social philosophy and in ethics. I will not examine this from an ethical standpoint, since it is generally accepted both by the supporters of capitalism and by its opponents. I will narrow my considerations to the issue of innovation, as a paradigmatic model of improving human life.  More


With Concern, Concerning Pensions

With Concern, Concerning Pensions

In a well-ordered society (in Rawlsian terminology), every person gains his social place and, consequently, his income (wealth) based on his objective merits – usually based on his work. Unfortunately, beyond a certain age, the physiology of humans does not allow people to engage in work activities anymore. In such a situation, some resources (usually in monetary expression) are needed to maintain the standard of living or, in more general terms, the wellbeing (no matter if all persons agree with a little smaller level of it, since, in fact, the general needs are, after the mentioned age, smaller). These resources form the concept of pension – that is retirement benefit. But who must provide the pension to retired persons? All logical judgements would tell us that the pension should be composed of savings on the part of the beneficiaries themselves, from their personal (or disposable) income gained during the active period of their life. Such savings should be the result of prudential behaviour in the long term. Since, in the real world, the prudential behaviour is not granted to all persons, the state took over the burden to fuel that “savings account”. Such saving has some features as follows (NB: I discuss here only the type of public pensions of the 1st pillar in the Romanian system, the pay-as-you-go public system):  More


The Case for a Homeopathic Fiscal Policy

The Case for a Homeopathic Fiscal Policy

Very recently, a certain initiative of the Minister of Public Finance – namely regarding the possibility that tax evasion be punished by prison time – has generated much rumour and pros vs. cons debates (especially among the TV talking heads). Since the political (or even electoral) reasons of such a proposal are alien to my mind, I will focus this intervention on the general character the fiscal policy should exhibit, according to its nature as well as its purposes and, consequently, on the legitimacy of introducing such sanctions. Another issue of interest will be that regarding the efficacy of the proposed measure.  More


The Concept of Economic Capillarity

The Concept of Economic Capillarity

The term capillarity belongs, from a historical point of view, to physics, but it has been taken over, in terms of its general, philosophical significance, both by psychology and sociology, as well as by historical science. From a semantic point of view, capillarity indicates a property of a phenomenon or of some entity to evolve (from a spatial point of view or structural-functional properties) in a manner contrary to all laws and mechanisms known and accepted as governing the phenomenon or the respective entity. The classic example of capillary is that of a liquid that, in a tube narrow enough that its surface tension exceeds the value of the gravitational force, instead of moving down (more precisely, in the direction of the source of the gravitational force), moves in the opposite direction. More


From the Intelligent State to the Responsible One

From the Intelligent State to the Responsible One

The state is not a manager only with regard to the society as a whole. If it was to be like that, a performant computer could have better accomplished whatsoever administrative tasks. The social contract on the basis of which the state is supposed to be generated implies both much more and much less than that. Let me provide some analytical explanations: More


With Regards to Government Charity for the Private Sector

With Regards to Government Charity for the Private Sector

In a market economy, which is also presumed to function within a free society, generally, the goods and services needed for individuals are acquired through economic transactions (regularly through work and the processes around it – saving, investments and so on). Part of these goods and services are delivered by the state (more exactly, by the public sector of the state), the so-called public goods. The present intervention is intended to advance some considerations about the phenomenology of the public goods. It must be mentioned that there are two categories of public goods:  More


The Efficient Wage and Its Challenges

The Efficient Wage and Its Challenges

The standard Economics states that the gross nominal wage which is consistent (that is, non-contradictory) with the criterion of economic behaviour of the employer – the gross profit maximization – must be at most at the level of monetary expression of the marginal labour productivity (such a level could be called the optimal-based wage – OBW). Let us presume, for the sake of discussion, that the employer does not wish to exploit the employee, so he does not pay less than the OBW. But what happens if he pays more than the OBW? Here emerges the concept of the efficient wage (EW), that is that gross level of the wage which is higher than the OBW. In the present intervention, I will discuss some issues related to the concept of EW, in the very context of Romanian economy where, quite recently, such a philosophy of remuneration was implemented.  More


Some Thoughts on COVID-19 Pandemic Shock

Some Thoughts on COVID-19 Pandemic Shock

On the nature of COVID-19 pandemic shockWe think the COVID-19 pandemic shock “verifies” the following features:the shock is atypical: it has the particularity that it bypasses the standard “path” – that is, it does not affect the nominal flows of the economy (especially the financing or re-financing mechanisms) – but directly affects the real economy:
the reduction/limitation of economic activities involving human agglomerations (in order to avoid the spread of the SARS-CoV-2 virus) has led to a decrease in the labour factor in the production function, thus to a decrease in domestic supply; More


The Absorption of Uncertainty and Exiting from the Pandemic

The Absorption of Uncertainty and Exiting from the Pandemic

The individuals (and, to some extent, the groups) make decisions based on their perception regarding the future, rather than on a rigorous calculus based on accurate models of rationality (such a conclusion has long been reached by the researchers, and, very curiously, even by some economists!). The perceptions are, in fact, an inextricable mix between information, experience and expectations. And, of course, all of the three ingredients are tinged with uncertainty. Uncertainty is very different from risk – while we can assign to the risk some probability distributions in order to “know” it at least probabilistically, this cannot be done with uncertainty – an obvious clarification given by Frank Knight almost a century ago. Even more, the question of uncertainty in the decision process arises when the public decision-making is involved because:  More


Defined Contribution Pensions, But Not Really

Defined Contribution Pensions, But Not Really

From a theoretical (and philosophical) point of view, the (defined contribution) pension in a pay-as-you-go system is an impersonal, non-coexistent, inter-generational, and mandatory quid pro quo. The referee which must assure that the quid pro quo is respected is the state (we have here a nice example of a hard core of public interest which would be desirable to be extended to others, i.e. national interests). As it is inter-generationally applied, such a “social contract” faces some accidents, some of which are objective, others not quite. For example, a current generation “i”, is paying social contributions during its active life to the generation „i-1” – I will do not complicate the discussion by taking into account that, in fact, there is an overlapping of generations both as paying social contributions and as benefiting from defined-contribution pensions (this would be useful if done for the public finance decision). In turn, the current generation “i” (which is the future “i+1” retired generation) will benefit for its pensions from the social contributions paid by generation “i+1”, and so on. This mechanism seems to provide a roughly fairness, because the pensions are calculated based on the effective social contributions paid during the active (that is, economically productive) life. Rawls, as pure contractarian, would say it should be designed and implemented in the legislative stage of making the social contract, not in the original position. Below, I ask myself whether such fairness is really effective and, if not, how we should to proceed. The discussion is inherently coupled to the debates regarding the increasing of the pensions in Romania. I will do not discuss the (judicial) fact that a normative act which was already been constitutionally enacted by the legislative authority leaves, I think, an extremely narrow room, if any, for doubts regarding its implementation, but, instead, I will deal with only some very simple economic and social questions (more exactly, of social justice).  More


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OEconomica No. 1, 2016