Romar Correa

Loanable funds, liquidity preference: structure, past and present

Keywords:

de niveau recherche, publiés ou non, émanant des établissements d'enseignement et de recherche français ou étrangers, des laboratoires publics ou privés.

Introduction

Keynes challenged the theory that the rate of interest was a price that brought into equality the demand for and the supply of bonds. According to the classicals, the rate of interest would move so that saving supply equaled investment demand. Keynes argued, instead, that the equilibrium of the classical theory determined the level of activity leaving the rate of interest a variable without a theory. His theory of liquidity preference offered more, was yet another device to introduce the non calculable nature of probabilities into the determination of demand and supply functions. Indeed, the innovation started even earlier than the speculative motive for holding money. Although the specification of both the transactions and precautionary motives are believed to be free of Keynes' "dark forces of time and ignorance", according to the cognoscenti the volatile nature of the demand for money actually began with the precautionary component and percolated into the [START_REF] Correa | Loanable funds, liquidity preference: structure, past and present[END_REF] 'Loanable funds, liquidity preference: structure, past and present',

The Journal of Philosophical Economics, III:1, 75-89 speculative motive [START_REF] Panico | Liquidity preference[END_REF]. For Kahn and others, precautionary demand arose from financial operators that were highly uncertain about the future course of the rate of interest.

The division between Keynes and his contemporaries has mutated into a difference of opinion between followers of Keynes today. Put simply, either the rate of interest is endogenous à la the theory of liquidity preference and money is exogenous, or money is endogenous leaving the rate of interest a control variable.

Radcliffe of the famous Committee Report that went under his name developed the idea of liquidity preference as applying to a spectrum of assets. Its many dimensions could not be captured in a suitable metric [START_REF] Dow | Liquidity preference[END_REF]. Hence, monetary policy should be directed at manipulating interest rate changes that altered the state of liquidity rather than controlling monetary aggregates.

Kaldor is credited with articulating the endogenous money approach in its modern guise [START_REF] Dow | Liquidity preference[END_REF]. The money supply is determined by the private sector. If the banking system responds to the demand for credit, given interest rates set by the authorities, then the central bank has to supply the required reserves so as not to disrupt the disbursement process. The process does not require a theory of liquidity preference. Some post Keynesians lament the jettisoning of the endogenous money of the Treatise on Money where the interest rate was exogenous [START_REF] Bell | Liquidity preference[END_REF].

On the other hand, others hold that liquidity preference and endogenous money might not be mutually inconsistent when careful attention is paid to the distinction between the stock demand for money and the flow demand for credit. By considering the liquidity preference of banks the supply of credit can be seen to be a function of liquidity preference [START_REF] Dow | Liquidity preference[END_REF][START_REF] Bell | Liquidity preference[END_REF]. Indeed, recent scholarship has unearthed continuity between the Treatise and the General Theory in this regard (Carlos & Silva 20089). The claim is that liquidity preference is richer in the former in the sense of a specification of the financial structure of the capitalist economy of the time. Keynes tore off the institutional fabric in favor of the terse, if opaque, theory of the latter. In the process the medley of commercial banks, investment banks, and broker dealers vanish. Most importantly for our purposes, the relationships between the Central Bank and financial institutions, and that between financial institutions and private nonfinancial institutions were abstracted from. This claim is appraised in what follows using the methodology of causal ordering. In the sections and subsections that end with Keynes' theory of liquidity preference the rate of interest is shown to The problematic connecting theory and practice goes back. Given the sway of general equilibrium macroeconomics since the efforts of Robert Lucas, Edward Prescott, and others, governments have shown no interest in the money stock for over twenty years [START_REF] Howells | The Money Supply in Macroeconomics[END_REF]. For instance, the Thatcher regime was regarded as advocating hardcore monetarism. Yet, in 1981'85, when the government introduced money growth targets, the control variable was the rate of interest designed to influence the demand for bank loans. Another bastion of exclusive monitoring of monetary aggregates, the Bundesbank, used the shortterm interest rate as the policy instrument, a position that continues with the European Central Bank. The reason, for practicing central bankers, is not far to seek. Reducing the rate of increase of the base would require auction sales of government debt to the private sector. In that case, the overnight interbank rate must respond. Since the demand for reserves by banks is inelastic, the fluctuations in short term rates could be large. Consequently, bond sales are accompanied by price bound stipulations. In the pits of the financial meltdown in 2007, when the Federal Reserve introduced its Term Auction Facility, it set a minimum bid rate. In other words, the monetary authorities would rather control quantities sold than permit interest rate hikes beyond a point. At the level of foundations, the origins of monetarism provide interesting insights. The quantity theory of money, that money causes prices, is the quintessential monocausal story and David Hume commonly regarded as its first narrator. Yet, he recognized that economists must appreciate an underlying causal order [START_REF] Dow | David Hume and Modern Economics[END_REF]. However, due to the problem of induction the scientist could never be certain of having excavated fundamental causal mechanisms. The system of equations would have to crudely proxy that stratum. Thus, the causation between money and prices was not direct. It was heightened activity that drove up wages and prices, not money per se. Consequently, the policy prescription was not the crude quantity theory medicine but the grafting of institutions and procedures that would stimulate industry which would lead to an increase in money.

The interest rate is everywhere an exogenous variable

Real theories

The following description is drawn from [START_REF] Harris | Monetary Theory[END_REF]. According to the preKeynes Quantity Theory tradition, in the long run, changes in the quantity of money cause an equiproportionate change in the price level. Money does not impact the interest rate which is determined by real forces. The supply of bonds, B S , arises from firms' investment plans. Thus, the desired supply of bonds and planned investment are identical. The demand for bonds, B D , depends upon the propensity to save of consumers. The notional demand for bonds, in like manner, is the same as planned saving. The interest rate is determined from the following equilibrium condition.

B D = B S
The condition is equivalent to

S = I
Bertrand Russell proposed that the notion of cause was unnecessary and that the scientist must begin with a system of simultaneous equations [START_REF] Nordberg | Defence of Absurd Theories in Economics[END_REF]. His advice went unheeded because theory construction along those lines would need to be deduced from vast masses of data. It is not possible for people to massage huge collections of facts. They would quickly begin to impose structure and create meaning. The first step in the structural approach is to carve out a matrix from the welter of reality. Algebraically, the elements of the matrix map onto a system of simultaneous equations. The equations may be regarded as a network of counterfactual relations and transmit what Hume regarded as the necessary connection between things. Since the system of equations is believed to transmit causal efficacy, a basic step in identifiability is idealization. That is, a theory must pick out primary variables and set secondary elements to zero. Furthermore, since our first step cannot be arbitrary, idealization is tied to a notion of essence. The essence of the theories to be presented below is the research agenda of coupling the real and financial in any economic structure. Practitioners of General Equilibrium Economics are untroubled by the above steps for the system is represented by an indecomposable matrix of coefficients and constants. Perversely, "Walras' is truly the Methodology of the philosophers" (Hoover 2009, p.309).

In causal terms, the model can be depicted in the following fashion, where i stands for the interest rate.

i = r B D = B D (r) B S = B S (r) B D = B S = B *
We have a selfcontained or complete structure, a system of four variables in four equations (Simon 1997, p.15). Arraying the variables along a row, and the four mechanisms above in columns, we have the following matrix, r B D B S B * 1 1 0 0 0 2 0 1 0 0 3 0 0 1 0 4 0 0 0 1

The first equation is an exogenous equation (Simon 1997, p. 51). The interest rate is an exogenous variable that is an input into the next two equations. The equation is a minimally selfcontained subsystem of zero order (Simon 1997, p.15). That is to say, it is selfcontained and does not contain a selfcontained proper set. All this means is that it is determined in a larger system of which the present structure is a section. Each of the demand function, the supply function, and the equilibrium condition that follow are a derived structure of first order. The sources of causal asymmetry include manipulability and prepotency (Simon 1997, p. 21). When the interest rate can be manipulated by, say the monetary authorities, the variable can be regarded as exogenous to the system. Manipulability is close to control (Katzner 1983, p.128). An important trait of systems is the possibility of steering mechanisms to a particular output. The only way to do so is the manipulability of one or more inputs. For the purpose, the set of definitions would need to be extended to include a criterion function that evaluates the performance of the system according to some measure like social welfare. Prepotency emerges when the size and power of one variable far exceeds the dimensions of another variable. Since the purpose is to control events of particular kinds, the model must attach not just a spate of events to a cause but must be able to qualitatively arrange them [START_REF] Hausman | Laws, Causation, and Economic Methodology[END_REF]. For example, government interventions in the case of superficial causeeffect loops would have limited impact. Policy regimes that depend on deep causes will, on the other hand, be more efficacious. In the present instance, structural power is at play in the following deontology [START_REF] Hall | Central Banking as Global Governance[END_REF]. While money emerges endogenously in the creation of credit by commercial banks, money is supplied exogenously by the central bank. A hieratic structural binary relationship 'money issuer/money user' is generated. This deontic power is operationalised by setting the price in the interbank market and expanding (or contracting) the supply of money so that the money market is in equilibrium at that price. In this instance, the structural binary subjectivity revealed is 'price setter/price taker'. Clearly, prepotency must be handled carefully. In a market system with powerful private interests, it might be that the central bank does no more than react to or endorse private signals. Or, the central banks might decline the demand for reserves coming from private banks. In a situation of tight money, the structural binary relationship between the central banks and commercial banks is 'credit refuser/credit supplicant'.

Alternatively, we can express the above system as a selfcontained equilibrium structure of two equilibrium equations in two variables, B * and r. The interest rate appears in the clearing condition for the bond market. For any arbitrary choice of r, the equation can be solved for B * r  B *

Real theories with money

According to Keynes, the marginal efficiency of money in terms of itself was unique in being independent of its quantity (Keynes 1973B). It differed from other capital assets in this respect. This was the legacy of the Quantity Theory.

The money rate was indeterminate because the demand schedule was a function of given supplies. Keynes was concerned with changes in the demand for money as well as the demand for bank borrowing (Keynes 1973C). Ex ante investment may have to be provisioned for financially before the plans are on stream and the matching saving occurs. The bridge between the decision to invest and the resultant savings might be provided by the bond market and banks. However, the stock of cash the businessman enters the period with represents a special demand for money, what Bertil Ohlin called the 'finance' required by the inducement to invest. This 'finance', though, is not the only source of the demand for money.

The distinction between stocks and flows was an early bone of contention. It turns out that the debate was unnecessary. Both theories must be evaluated in a unit period. The period is defined as one in which the stock of money changes hands once in exchange for all goods and services [START_REF] Tsiang | Loanable funds[END_REF]. That is, all gross incomes and proceeds of sales of goods and services that accrue in the current period cannot be spent until the next period. The definition includes the funds realised from the sales of financial assets. Idle balances in this context is the stock of money possessed by the representative agent at the start of the period as well as the stock she can borrow from the money market. Therefore, we introduce time subscripts to our variables above to denote the fact that they are flow magnitudes and that we are operating in the traditional period. Now, the sources of loanable funds comprise planned saving and any increase in the stock of money in the period. That is,

   D S t t B S M
In like manner, the flow supply of bonds arises from the demand for finance plus the demand for loans to accumulate money balances. Formally, Equilibrium in the bond market is assured by

   S D t t B I M
     S D t t S M I M
The system is a mixed structure with equilibrium conditions including difference terms. Since money, in difference terms, does not depend on any other variable in the system, it is exogenous. If we assume that the initial endowment of money in the case of both supply and demand are equal, the flow equilibrium of the loanable funds theory and the stock equilibrium of the liquidity preference theory are equivalent [START_REF] Tsiang | Loanable funds[END_REF]. The change in the stocks of money represents the adjustments of the previous stocks to their new equilibrium values. Adjustments in stocks are flows. The matter can be put thus, with cs given constants,

          1 1 1 2 D D t t S S t t M M M c M M M c
Assuming, as usual, the values of the initial conditions, including the value of the money stock at time t, the equations can be solved for all values of the money stock. Thereafter, a demandequalssupply condition for the money market suggests itself. Denote the equilibrium level of the money stock as M * . The causal arrows fly as follows.

             1 1 * 2 1 , , D t t S D t t S t t c M M S r M S M I M I r c M M
Money is exogenous and the interest rate continues to depend on the real forces of productivity and thrift.

Keynes' liquidity Preference

For the money market to be in equilibrium, expectations must be such that the investors hold the current offerings of money and bonds willingly, given the structure of interest rates. The complex of rates will be determined by the stock demand for money relative to its stock supply. Given the money supply, the residual that does not satisfy the transactions and precautionary motives gratifies [START_REF] Correa | Loanable funds, liquidity preference: structure, past and present[END_REF] 'Loanable funds, liquidity preference: structure, past and present', The Journal of Philosophical Economics, III:1, 75-89 the speculative motive, the stock demand for money. Keynes offered that the demand for money depended on the interest rate for a complex of reasons brought under the rubric of liquidity preference. That is,

  ( ) D M f r
and little can be said of the function f. It would violate the economics of Keynes to assume, for instance, that it was linear. It appears that our model here is a minimal complete subset, consisting only of standard initial conditions, with multiple variables, which, in our case, are all the state variables (Simon 1997, p.53). After deleting c 2 and M t , the derived structure consists of savings, investment, and money, which are not reducible. Consequently, there is no causal ordering between them. Graphically,

     2 , , , t t t t r M S I c M
Savings, investment, and money are mutually dependent due to some unknown feedback loop between them and there are no simple, acyclic causal relationships connecting them.

The liquidity preference of banks

For Keynes, the rate of interest was determined by the schedule of liquidity preference and the quantity of the liquid medium. At the same time, he appreciated that banks cause lending to come about by modifying the terms of contracts (Keynes 1973A). For instance, when the quantity of money is increasing, the banks respond by reducing the liquidity premium (or increasing it, depending on conditions) and augmenting/reducing the money supply thereby. In other words, we introduce a supply of liquidity function to complete our description of the market for liquid funds.

    ( ) ( ) D S M f r M g r

To keep exogenous or endogenous?

The determinateness of the interest rate depends on differences or similarities among market participants about the prospects of that variable. The trail of the rate of interest partakes of a bootstraps character. If all investors are of a unanimous opinion about the fate of the variable, it will prevail. The 'average' level of the interest rate over the unit period is determined by the elements that affect the 'common opinion' about the rate expected to prevail in the future. Chief among these elements is the activities of banks and the monetary authorities [START_REF] Panico | Liquidity preference[END_REF]). Thus, the potential instabilities in the demand function above can be offset by the nicelybehaved supply of liquidity on the part of the banks and the monetary authorities delivering a determinate system. In modern terms, the absence of variety and the homogeneity of response is assured by the general equilibrium approach to macroeconomics. Rules have beaten discretion in that battle. No special status is to be attributed to policymakers. They are one among equals in the policy game looked to for their credibility and reputation. However, it is well known that the interest rate weapon is asymmetric, akin to pulling and pushing on a string. While it is efficacious in depressing activity, it is powerless in generating activity from a depression. The vaunted Taylor rule has been quietly sidelined in the present conjuncture when interest rates must enter the unfamiliar negative orthant of interest rateemployment space. At the international level, Basel I and II is another way to bring about wellbehaved supply and demand functions in the monetaryfinancial subsystem. banks has been called into question. The welldocumented outcome has been, expectedly, a sharp fall in lending activity for productive purposes worldwide.

If the terrain on which macroeconomic models are writ is believed to be suffused by novelty and surprise, we must allow for variety and heterogeneity of response.

In that case, the monetary authorities must exert meaningful autonomous influence. Liquidity preference enters precisely when opinions between the mass of market participants and the banking system diverge [START_REF] Hawtrey | Letter to JMK[END_REF]. The speculative motive originates when, for instance, banks, prompted by signals different from the general public, buy securities on a large scale. People prefer to be liquid when the prospect of a huge capital loss far outweighs the interest receipts. This scenario typically applies when active open market purchases by banks pushes up the prices of bonds to what the average businessman regards as an unacceptable level. The bank may run in an opposite direction to the public siphoning off securities from the market at some price [START_REF] Bibow | Liquidity preference theory[END_REF]). Indeed, it is only to the extent that the banking system does not meet the requirements of the public will changes in the demands of the latter result in varying security prices. Furthermore, the banking system can even initiate such changes. The liquidity preference mapping for Keynes was neither unique nor stable precisely because it was possible that the state of expectations was generated by wrong signals.

Energetic open market operations directed at the longer end of the liquidity spectrum, for instance, could lead to a change in the state of expectations along socially desirable lines. Thereby, the socalled liquidity channel (our supply function) could counterbalance any effects on interest rates coming from the expectations channel (our demand function) [START_REF] Bibow | Liquidity preference theory[END_REF].

If the rate of interest is a control variable, it should be socially constructed [START_REF] Smithin | Money, Enterprise and Income Distribution[END_REF]. Under capitalism, profits are the returns to enterprise, wages the remuneration for work, while the function of the rate of interest is to preserve or enhance the value of accumulated financial capital which includes unspent past profits and wages. In that case, on ethical grounds, the real rate of return for rentiers should be nil. The real value of the existing stock of money representing past effort would be preserved but there would be no increase in real value arising from the mere possession of money. Further accumulation would only come about by fresh enterprise and work. The euthanasia of the rentier is not at stake since it is not the nominal rate of interest that is set to zero. Pasinetti's "fair rate of interest" is a variant. It equals the rate of increase in productivity of the total amount of labour required to produce basic goods and increase productive capacity. The "fair" rate allows the owners of the existing financial assets a share in the rewards from the current increase in productivity. A null real rate would preserve or enhance the power of the original financial capital. The existing financial stock is regarded as representing the proceeds of past productive activity. Workers and businessmen today are engaged in ongoing production that will accumulate capital tomorrow. In that case, the "fair" rate is arguably superior in preserving the balance between the past, the present, and the future.

Conclusion

We evaluate the controversy between the liquidity preference and the loanable funds theories of the determination of the interest rate with structural criteria. The interest rate is a monetary variable and (almost) everywhere exogenous. Should it be endogenised? Since the monetary authorities have no small role to play in providing an anchor to the spectrum of interest rates in the economy, should their behaviour be perfectly predictable or should they exert significant outside control? It would appear that the first stance is dictated by a system in which prices and quantities move as per the dictates of a standard economic model. In that case, the central bank is at most a leader in the macroeconomic game, anchoring expectations toward a desirable social equilibrium. However, if the economy is chronically prone to malfunctioning, the planning approach to policymaking comes into its own. The central bank cannot be an insider and must hold the power to control the system. The rate of interest would be but one variable in its armoury.

  (2009) 'Loanable funds, liquidity preference: structure, past and present', The Journal of Philosophical Economics, III:1, 75-89

  The Journal of Philosophical Economics, III:1, 75-89 be an exogenous variable. It might be endogenised only, as conjectured, when the liquidity preference of banks schedule is included. Thereafter, the normative question is addressed: Should the interest rate be, indeed, an endogenous variable? A final section concludes.The merit of a causal decomposition is that it helps distinguish the product of Keynes from the (neo)classical model. On a superficial reading, the present mainstream policy package is no different from the Post Keynesian case for endogenous money. The macroeconomic consensus today includes the endogeneity of money and the exogeneity of the interest rate. However, new Keynesian economics, structurally, is general equilibrium economics represented by a system where everything depends on everything else. The apotheosis of the theory is a vector of real prices not excluding the real rate of interest. The new consensus model has gone further in reducing money to a cipher. In the theory pioneered by Michael Woodford, for instance, money can be dispensed with. The task of the authorities is to use the market interest rate to track the real interest rate in historically unique mandate. They are stretching their lending operations through devising novel credit vehicles and extending the maturity of their loans. The Fed has extended credit lines to banks; The European Central Bank has guaranteed unlimited funds for up to six months; the Bank of Japan has purchased equities; the Bank of Canada is standing by to purchase government or corporate debt in order to increase the flow of credit.

	Correa, Romar (2009) 'Loanable funds, liquidity preference: structure, past and present',
	The Journal of Philosophical Economics, III:1, 75-89
	lending hole left by banks and Wall Street firms, Federal Reserve officers are
	scrutinizing the creditworthiness of industries like motor homes, rental cars,
	snowmobiles, farm equipment, and so on. In other words, they have leapt out of
	their role in the LM relationship to invade the I portion of the IS curve. New
	Keynesian wisdom was founded on a stable yield curve. The evidence does not
	support the theory. The global savings glut has disentangled the relationship
	between different shortterm rates. Besides, as already illustrated, central banks
	are extending their
	Wicksellian fashion. In contrast, the economics of Keynes offers an array of
	models that are variously decomposable depending on the aspects of the capitalist
	economy to be captured. Money has to be mired in institutional detail. An
	engagement with methodology is indispensable. Thus, citing a cause will not
	suffice if the cause does not discriminate between the explanandum and other
	outcomes (Hausman 2009). Causal explanation here requires the offering of a
	mechanism: how did the cause give rise to the effect? Also, a causal ordering is
	superior if it is deeper: in other words, causes that can account for shades of
	meaning within a range of explanation are more attractive. In addition, the
	objective functions of the authorities in new Keynesian and Post Keynesian
	frameworks differ. In the case of what has otherwise been called Dynamic
	Stochastic General Equilibrium (DSGE) analysis, the interest rate is the
	instrument and the inflation rate the target. Keynesian policy makers are more
	complex with the level of unemployment being, in general, the centre of attention.
	Inflation enters above welldefined thresholds.
	In what she has christened PostMacroeconomics, Célestin Monga (2009) has
	critiqued the epistemological monism of new consensus macroeconomics in the
	context of the writing of macroeconomics after the crisis. One instrument (the
	shortterm interest rate), one target (the inflation rate) macroeconomics has
	become an embarrassment and received wisdom is swinging into uncharted
	territory with the central bank as lender of first resort. In order to fill in the

[START_REF] Correa | Loanable funds, liquidity preference: structure, past and present[END_REF]

'Loanable funds, liquidity preference: structure, past and present',

  [START_REF] Correa | Loanable funds, liquidity preference: structure, past and present[END_REF] 'Loanable funds, liquidity preference: structure, past and present',The Journal of Philosophical Economics, III:1, 75-89

  [START_REF] Correa | Loanable funds, liquidity preference: structure, past and present[END_REF] 'Loanable funds, liquidity preference: structure, past and present',The Journal of Philosophical Economics, III:1, 75-89[START_REF] Harrod | Letter to JMK[END_REF] warned Keynes that demand and supply functions might have more than one solution when the nature of the supply function was not known. Yet, if we assume, strongly, that both the functions are invertible, then, for the first time we have a zeroorder minimal selfcontained subsystem which includes the interest rate. The rate of interest is endogenous. Even if the functions are too complicated to be specified, there are two equations in two unknowns, the money stock and the rate of interest. The payoff is the endorsement of another fundamental Keynes theorem: the rate of interest is a monetary variable. Along with the earlier equations we have a TreatiseGeneral Theory model of monetaryfinancial capitalist economy.

  [START_REF] Correa | Loanable funds, liquidity preference: structure, past and present[END_REF] 'Loanable funds, liquidity preference: structure, past and present',The Journal of Philosophical Economics, III:1, 75-89

Acknowledgments:

The inputs of a review panel were instrumental in providing focus and breadth to an earlier draft. I, of course, am completely responsible for the final outcome.


de documents scientifiques de niveau recherche, publiés ou non, émanant des établissements d'enseignement et de recherche français ou étrangers, des laboratoires publics ou privés.

A review of David Colander, The Making of a European

Economist, Cheltenham, UK, Edward Elgar, 2009, 190 pp.

Mariana Nicolae

David Colander's book on The Making of a European Economist is somehow a natural continuation of his by now classic studies on economics education in the US and of his book The Making of an Economist, Redux [1]. The book is fascinating to read not only by someone like me who is not really an economist, but has been close to the field and has been teaching students of economics for a long time, but mainly by policy makers both in the field of higher education and in other fields like business where the larger aspects of societal changes are more and more apparent.

The book is even more worthreading to an audience of economics professors, researchers, students and particularly policy makers who are waiting for input from economic higher education as the pressure on the profession to produce results that could somehow be put to better use in the complex, ever transitional economic situation of the country is greater and greater, with politicians turning to miracle solutions put forward by economic advisors and forgetting that a critically ill higher education system [2] cannot provide the expected answers and the desired experts. The various readerships of the book can find in it some answers to daunting questions and particularly a lot of concerns that come to underline that the field of economics and the profession related to it are and should be undergoing massive change. All in a relatively simple and unsophisticated language that even non specialists can understand.

Colander has been known for more than 20 years for his interest in the teaching of economics particularly to undergraduates, in other words in the "making of an economist" based on the commonsensical observation that economists are not born into the profession, but are "produced" by universities through their study programmes. In an academic environment that is focusing on research for journal publication so excessively it is somehow refreshing to read the view of someone who considers that "research is nice, but good teaching is priceless". The book reports the results of a survey of students in six European graduate programmes that have designed or are in the process of designing their programs to be similar to US ones with the author explicitly and vigorously stating that this is generally detrimental to the European schools of economics. At a deeper level the book questions the overall efficiency of economics education within the process of the massification of higher education against the background of Europe's hard struggles to win the battle of becoming one of the most competitive economies in the world as well as to provide a counterbalance to the obsessive current European concern about rankings and output metrics based on qualityweighted journal article output. One of his arguments highlighting the differences between the US and the European training programmes is that the US model of training graduate students has developed and has been shaped to match the US specific institutional framework which, unlike the similar European structures, provides economists for a unified job market whose main metrics is journal publication. A unified market in Europe is only evolving and it still represents rather a political desire than an economic and institutional reality. In practical terms this means that while the US graduate system trains students to mainly get into the system of teaching economics by writing journal articles and doing handsoff research, in Europe this does not happen yet.

Colander explains the differences of training for research of the graduate students in the US and Europe as a result, among others, of the differences between the unified US job market and the diverse European one. Most of European economists get jobs in policy institutes or governments as well as in universities that are most often local in their nature which means that they will do "handson applied policy", directed to solving specific problems, and not "handsoff applied policy" which is directed mostly to a community of peer researchers, with a view to administrative promotion, rather than policy makers at large. Colander views "handson applied research" as research for policy makers, with a strong focus on integrating broader and more complex issues into the analysis and the clear need to be persuasive in order to justify a certain political decision. " (p. 146) [3] This is a remarkable perspective and an academic community like the Romanian one should be discussing it in order to decide whether it really wants and needs to spend so much human energy and resources in order to gain access to international visibility through what is by now considered an obsolete system of metrics.

The difference in the training of students in economics between the US and Europe, the insistence of mainstream economics to focus on complex theoretical issues that are difficult to connect with the current economic and social problems of mankind (see Colander's criticism of macroeconomics in general) raise issues about the role of economists in society. Colander's respondents are convinced that economics is an important social science that helps clarify human action, that could offer support to policy making and government decisions, but its professionals seem to be incapable to communicate with larger publics, besides academics (p. 48). Some of the concerns and doubts of graduate students are so relevant that I considered them worth quoting:  "For the most part economists cannot give explanations. For example, recently a friend asked me to analyze the balance sheet of the firm he's currently working for and to give him some advice regarding his permanence in this firm. My answer: 'I don't know'. He probably wonders whether I actually know anything relevant at all!!!!"  "Because most things economists do are completely irrelevant to the real world.

And if some things are relevant, economists cannot communicate the relevancy."  "The few economists that do venture off in the public policy debate seem to have an enormous impact. Their opinions are often not even questioned." (p. 53)

In the concluding essay to the book Colander reiterates one of his favourite themes: that in the US there is a mismatch between the training of the graduate economics students to be scientific researchers and the real jobs they'll have to do teaching economics or doing handson research. Teaching has the lowest status and consequently funding in the system, however this is what most graduates will be doing. The same stands true for undergraduate students -how relevant is the training they get to the real problems they will have to solve in real life? Colander sounds a serious warning for those European universities that are trying to copy American study programmes in the hope of transferring and incorporating American success stories as well. He also puts forward a proposal for funding research in Europe based on market demand rather than the selfinterests of the academic community arguing that, far from being utopian, this proposal could help European economics avoid the dangers of irrelevancy and lagging behind.

Endnotes

  No matter how useful this type of research is, it does not lead to publication in economics journals, but can be found in political documents such as reports, memos and political counseling. Colander contends that both types of research are equally important, but he signals that European economics education, providing training in both types of research, is in danger of denying some of its strong points, by adopting US style metrics which has evolved as a business aiming at measuring the academic community's own output in order to, mainly, make promotion more rigorous and transparent. In other words what Colander says is that no cutting edge research is published in the mainstream journals first because the system of reviewing and accepting papers has become so long and bureaucratic that the real debate in ideas takes place not in journals, but in the research workshops of top universities, on blogs and popular books and even textbooks.

"Rankings follow what top economists do; top economists don't follow the rankings and if an

economist is worried about rankings, he or she is unlikely to be a top economist. Top economists are worried about ideas and influence, both of which are developed in myriad ways.

  [1] Colander, D., The Making of an Economist, Redux, Princeton University Press, 2007 [2] http://www.epochtimesromania.com/articles/2009/08/article_53847.html [3] Unless otherwise indicated, quotations come from Colander, D., The Making of a European Economist, Edward Elgar, 2009.

Mariana Nicolae is Professor at the Bucharest Academy of Economic Studies and Associate Editor of the Journal of Philosophical Economics (mariana.nicolae@rei.ase.ro)


Jean-Valentin Merlevede

Simon Enjalbert
email: simon.enjalbert@uphf.fr

Frédéric Henon

Alexandre Pereda Baños

Stefano Ricci

Frédéric Vanderhaegen

Expectations of train drivers for innovative driving cabin

Keywords: Human-Machine Systems, Rail Transport, Drivers-Cabin Interfaces, Information Technologies, Large scale survey

This paper aims at identifying the expectations of train drivers or other railway staff about Human-Machine Systems (HMS) in future cabins. The identification of the best technical solution needs surveying preferences and efficiencies of possible new information technology configurations of Human-Machine Interfaces (HMI) considering human factors as input and output sensors. Technical recommendations about the train cabin of the future are provided. They consider results from a state-ofthe-art on HMI in transport systems, from technology maturity issues, and from two large scale surveys realized during project. Recommendations are then proposed to train manufacturers for deeper investigation or for innovative driving cabin implementation.

INTRODUCTION

In this paper, authors present activities realized during CARBODIN project which has received funding from the European Union's Horizon 2020 research as part of Shift2Rail initiative. One of the project objectives was to look at train drivers or railway staff preferences that can be an interesting way of exploring how interaction design of rail operations might be improved. The goal of the depicted work consists in proposing recommendations for future train cabin based on the results of a state-of-the-art about innovative Human-Machine Systems (HMS) in transport domain and on two experimentations involving more than 1700 professional railway staffs and drivers from 15 European countries.

First of all, a state-of-the-art regarding all technologies already existing and implemented in transports industries, or studied in simulators in research laboratories, has been realized (Enjalbert et al., 2021a[START_REF] Enjalbert | Drivers' assisting Human Machine Interface: a review for future applications onboard trains[END_REF] in order to identify technologies to be tested on surveys. Already matures technologies are considered but are less interesting with regard to the CARBODIN project purpose study: it consists in determining expectations about new HMI devices on future train cabin by considering technologies that are rarely implemented by now in rail industry. Consecutively, the objective of the first experimentation was to collect a large number of contributions from drivers and staffs all over Europe. So, it was decided to organize an online survey and to collect the maximum feedback from people in railway transport services from different countries in Europe. Results about their statistical analysis supported the design of the second survey that included a driving phase with train drivers on a simulator. This second experimental protocol aimed to test gesture and voice control devices and to have feedback about relationships between groups regarding new sounds and driving tasks. Drivers were invited to answer to two lists of questions: same questions from the survey done on the first experimentation and other questions from a second survey about their feelings on gesture and voice control devices and on sounds that may be introduced in future cabin train.

With regard to results from both experimentation and surveys, guidance on Human-Machine Interfaces (HMIs) to be included in future train cabins are retained. It reminds conclusions from actual technologies already in use in transports, and from results of both experimental protocols. Finally, it gives a list of technical recommendations for future train cabins.

FIRST EXPERIMENTATION

Survey implementation

The first round of experimentation had two main goals. The first objective was to collect feedback from drivers on the technologies and sounds they might encounter in their cabin. A sufficient number of people were expected in order to make statistical analysis possible with dedicated tools. The second goal was to select technologies for the second experimentation.

In order to obtain meaningful statistics, a maximum number of answers was needed during the first experimentation. To achieve this high completion rate, a short online survey (called survey 1 or SV1) was designed. It should not take more than 20 minutes to be completed. The survey was open from February 2021 to April 2021 Train drivers were targeted, but the survey was also open to other professional railway staff. Participants had to answer to relevant information that have been categorized later by statistical analysis with regard to professional groups. The investigation of the first survey concerns feedback about the use of sounds, touch screen, gesture, visual and haptic technologies. Four input solutions and four output solutions are assessable by using these technologies, Table 1. Yet haptic technology is mainly relevant regarding the field of speed regulation in the driving cabin of a train. Thereby three input solutions and three output solutions assessable for all tasks and one additional input solution and one additional output solution for the speed regulation task. Each technology is described by a short explanatory text and a visual support in the "Presentation of technologies" section of the survey.

The visual support was a pictogram or video clip. As a matter of fact, the respondents had at their disposal all the elements to understand the proposed technologies before starting the survey. Various technologies are being studied for integration into the train cabin of the future. These technologies can be applied to the means of Action that drivers would have to act on their train, but also to the means of Information that would enable them to keep informed about the train state. Possible relationships between technology and Action or Information are as follows:

• AUDIO: Voice control of the system (Action) and audible notification (Information)

• TOUCH SCREEN: Use of a touch screen (smartphone, tablet, etc.) for entering commands (Action) and reading information (Information).

• GESTURE: Gestures recognition technologies allow to act on the system without contact (Action)

• VISUAL: A system allows information to be projected into the driver's field of vision. Thus, the desired information can be accessed through a Head-Up Display (HUD), without leaving the lane of sight (Information).

• HAPTICAL: Haptic technology allows you to use the manipulator you are used to and adds force feedback functions. The manipulator is then able to assist the driver; accompanying or resisting the driver's movements. It is therefore used by the driver to control traction (Action) and to be informed of his speed (Information).

Due to the huge number of actions or information regularly performed or checked during railroading by drivers, a functional analysis was realized in order to define categories and groups. Categories were organized according to the criticality and time constraint of the interaction, and groups were defined according to similar interactions in each category. The identified categories were as follows:

• Category 1 includes the KEY elements: Actions and/or information having a high impact on the safety of the train and passengers with a high time factor.

•

Category 2 contains AUXILIARY systems: Actions and/or information related to driving but which are carried out either at a standstill or in specific but limited circumstances.

•

Category 3 includes SUPPORT devices: Actions and/or information related to the comfort, putting into service or parking of the train.

Then 3 groups were created in each category (Table 2), bringing the total number of groups to 9. Each group is assessed in terms of information and action by using the same layout for each group:

•

How relevant would you consider the following technologies for: Action on "group's name"?

•

How relevant would you consider the following technologies for: Information on "group's name"?

To facilitate survey understanding, each group of actions was also accompanied by a short explanatory text. Regarding the 18 questions, participants had to select the correct evaluation of their own feeling on a 5-degree scale from 0 "Very unsuitable" to 4 "Very suitable". Of course, there were no limitation in participants answers and they could evaluate all technologies as very suitable (important to be included in next generation cabin design) or all unsuitable.

Methodology

Due to the large number of respondent (more than 1700 from 15 different European countries, project data available on demand), statistical analysis tools are required to determine relevant tendencies on the results by considering data like the age of drivers, the homeland of the drivers, their living country, or their experience, their perception of sounds or of technologies. The implementation of these tools is done with R. It is facilitated by R studio. Multiple Correspondence Analysis (MCA) and Hierarchical Clustering on Principal Components (HCPC) are data analysis techniques. The first one aims to find links between several variables. It identifies independent groups of data by considering respondent profile (age, experience, job, nationality) and scores given for sounds and technologies assessment. It prepares data for the second analysis technique. The second technique aims to determine clusters that link members of the same group and differentiate them from other groups. It will reveal which respondents are the most representative and the most divergent of each group with regard to factors from data analysis for each cluster. It also sorts the different groups according to their size. These tools will create groups in our pool of participants. To do so they will use the answers to the survey question to place each participant in a multidimensional space. Closer are the answers, shorter is the distance between the point. Next it will start making groups, for example 3 groups for KEY systems analysis visible in factor map (Fig. 1) or in hierarchical clustering (Fig. 2). It will find the best breakdown. where for each group, groups member is close to each other and distant from any no group members. After it will start to look if there are any criteria which could be typical of the created groups. It will look it will look for criteria in the group whose distribution is different in the group compared to its distribution in the whole population. If there is a relevant breakdown, it is going to find it, but it will also try to create and add a meaning to unrevealing breakdown. Moreover, each criterion is studied individually.

Factor map for KEY systems Category during the experimentation 1 (Fig. 1).

Hierarchical clustering for KEY systems Category during the experimentation 1 (Fig. 2).

For example, for technologies, a group whose criteria are Italian, trainers do not necessarily include Italian trainers, but Italians who can practice any profession and trainers of all nationalities. If a group comes up regularly during the grouping and is associated with a different response from the mass of respondents, then the results must be checked by looking in the clusters where it appeared if the individuals who correspond to the criterion have indeed responded differently from the rest of the participants.

In addition to technologies to be tested regarding group of tasks, different sounds have been tested during first experimentation and classified into three main appreciation levels according to their level of acceptance: the appreciated ones, the rejected ones and the so-so in the middle. A 5degree scale from 0 "Not at all" to 4 "Absolutely" was used to determine how enjoyable were sounds. An example of box plotting is given for the first experimentation (Fig. 3). Finally, participants have been asked if the sounds should be dedicated to a category of sounds in particular between the 6 proposed (Action, Alarm, Driving Mode, Home, Notification, None). If 50% of respondent identified the same category, sound will be retained for the next step of implementation.

Level of enjoyable sounds box plotting for survey 1 (Fig. 3).

There is no significant group that emerge from the MCA and HCPC for both sounds and technologies. This result means two things. Firstly, it seems that sound design in train cabin and the use of new technology depending on tasks will be universal for European people, and secondly the factor influencing sound design or technologies to implement was not in the spectrum of data collected during first experimentation.

SECOND EXPERIMENTATION

This second experimentation is a follow-up to the first one and uses the results to determine the relevant technologies to be used for future train cabin. It aims to test and assess innovative HMI technology by drivers. A three-steps experimentation was designed. In the first stage, participants will have to fulfil the first survey from experimentation 1 (SV1) then pass an experiment (Fig. 4) and lastly, they will have to answer a second survey (called survey 2, SV2) based on the same 5-degrees scale depicted on SV1 but only for technologies tested during designed experimental protocol. The purpose of this protocol is to verify the relevance of the European sample by comparing the SV1 result during Experimentation 1 and those obtained during Experimentation 2 and to measure if differences exist in the responses after using a technology during a test protocol on simulator by comparing results from the Survey 1 vs Survey 2 both surveys coming from experimentation 2. Because there were no significant group related to nationality, 20 French drivers (due to covid-19 pandemic limitations) that had not taken part into first experiment has participated to the second one.

Train Sim World 2 was used for the experimental part of experimentation 2. It is a railway simulation video game launched on August 20, 2020. It provides a sufficient level of details to allow a good immersion and it is particularly fast to implement. RailDriver is a Desktop Train Cab Controller which was designed to evoke an operation panel in the cabin of a locomotive. It features throttle, brake, reverser, and switch controls, plus 34 programmable buttons. In conjunction with Train Sim World 2, it should establish a high level of immersion for drivers. Some of the train driving tasks are not triggerable from this support. A numpad was used to allow drivers to achieve these tasks when needed. The Leap Motion device is used to implement gesture recognition. The Leap Motion tracks users' hand in space, allocating the tracking data process to GameWAVE. With the tracking information, GameWAVE runs AutoHotkey scripts when it detects the corresponding gesture. AutoHotkey scripts simulate keyboard press which activates function in the simulator. Leap Motion is a reliable prototype device, but interferences may occur in degraded conditions due to light or heat levels. Due to the kind of risk of interpretation in such conditions, a wizard of oz approach is used to recover it. Regarding voice capture, Google Assistant is used to implement reliable and fast speech recognition. The full operating protocol is based on IFTTT and Assistant Computer Control. Those features consist in creating text file in a cloud storage area. In order not to introduce any bias during the experimentation because of response delays, lack of reaction and interpretation concerns, voice recognition feedback was implemented to the system. Thus, during a vocal command, the voice system acknowledges to the drivers with the command it understands. This aims to verify the voice command and identify possible errors of recognition and delays.

Experimental protocol of experimentation 2 (Fig. 4).

Experimental protocol has been divided into three parts. The first part is a training time. Drivers can get into the simulation and they should use this time to familiarize to the experimental set-up. A first sub-part aims to familiarize the participants with the hand tracking device and voice input system. learning about the use of gesture control device and the reaction of the system to acknowledge the required command. During the second sub-step, drivers used the simulator while driving the train in a scenario containing 3 stops. During each stop, one interaction way was studied. During the first test, they used the rail driver. During the second stop, they used the Leap Motion. During the last stop, they used the voice command. The second part of the scenario was about testing the gesture and voice control during predefined stops. The drivers had to perform the actions to be tested. Each driver had therefore tested each technology at least 3 times. Most of the time, the actions on the innovative interfaces were carried out during station stops. This way, drivers had the time they needed to find the right command and execute it safely. Finally, the last part consisted in driving by using freely the gesture and voice command. During this part drivers were free to use the technologies when and how they want.

RESULTS

Experimentations results

Regarding the global results, the more relevant technologies are indicated for Action and Information related to categories and groups of tasks (Table 2). When brackets are proposed, this means that a secondary relevant technology is also possible. Divergences of opinion between results of both experimentations are highlighted in grey and are detailed (Table 3). They should lead to new tests and/or decisions from train manufacturers.

Considering sounds, voice control has better results in postexperimentation survey (SV2). First thought was a possible problem with the simulation that was not as noisy as a real train cabin. However, during the second round of experience in Paris, this hypothesis was rejected because the experimental room was really noisy with the air ventilation, and the window open on a busy street. Moreover, voice recognition systems are now quite common and drivers would prefer giving commands using natural speaking. Audio feedback was also developed to let know train divers if the command has been correctly recorded and applied by system. So, the voice command obtained high scores during experimentations. During the tests, the drivers showed a very strong interest in replacing the beeps emitted by the train with voice interaction. Indeed, according to them, voice interactions, although longer, allow to avoid the time of analysis of the beep and the search for its meaning. Moreover, in the second test of sounds, some of them occurred regularly and their meaning was ambiguous for the drivers. This confirms the potential interest for clear and concise vocal messages emitted by the system. Finally, drivers complained about the huge amount of consecutive alarms generating a mental overload and high level of stress.

Gesture control has lower results in Survey 2. It mostly comes from technical problems with Leap Motion technology. Indeed, as gesture control is disruptive, it needs an adaptation time. Leap motion is only one medium, other gesture recognition system can be very different as using arms, full upper body or whole body to trigger commands. However, there is no tangible feedback with this device. In order to improve gesture commands, different solutions can be studied: trigger a pop up on screen, trigger a voiced feedback, display the movements of the hands of the driver, or last but not least create haptic feedback on gestural commands. BMW was used as an example for using voice command, and they also start using gesture for infotainment device. Human is multitasking but only two hand to move actuators. Nested situation can be improved by Artificial Intelligence (AI) with will choose which data and button to display on touch screen, which data send on HUD and using voice or gesture command when hands are already busy.

Other general recommendations

As a matter of facts, there is additional and complementary recommendations that have been collected during both experimentations thanks to discussions with participants:

• Some drivers wanted to have a better mutual understanding with their train because willingness to cooperate is linked to the understanding of the system. They wanted more information and a better troubleshooting system. One of the most feared events is of failures that cause degraded mode.

•

The drivers have also complained about the driving cabin itself. They asked for some quality-of-life improvement. Mostly they are interested by equipment that becomes common in the automotive field as: more efficient automatic headlight and windshield wipers, a comfortable seat.

•

Drivers are willing to use a HUD. HUD information must be carefully picked. Unlike haptics, it is easy to ensure that the information transmitted on a HUD will be well understood. The problem here is the possible overload of the user with unnecessary information. For example, tracks profiles could be included for safety and eco-driving purposes.

•

Most drivers wanted to maintain the speed control with a physical manipulator but are strongly interested in haptics. Therefore, the traction manipulator should be enhanced with haptic feedback. Information relayed by haptics must be carefully picked. Haptics could be used for a lot of different combinations of stimuli and actions.

•

Drivers want to use touch screen. Touch screen allows information gathering and action at the same time and on the same device. Several parameters can be handled in order to satisfy preferences of drivers: relevance of information, readability, colour, standardization.

•

Some drivers asked that the layout of the controls be redesigned, and they would also like to see more consistency in the design of the controls, especially regarding location of some actuators (ergonomics). Indeed, they find that rarely used controls take up too much space on desk or cabin and that commonly used control devices are too small and poorly placed.

•

Music appears as concentration improver, and some drivers asked to have radio or music in cab.

• AI oriented Advanced Driver Assistance Systems should be developed to predict relevant actuator to show up on touch screen to reduce workload from the drivers.

CONCLUSION

Finally, facing the complexity of systems and situations, drivers ask for the development of more user-friendly HMI. Tactile, haptics, and voice command are the most appreciated innovative interfaces They must be studied and implemented on future train cabin. Gesture and HUD should be studied as they can improve the train driver comfort. Gesture control should not be used on action with high temporal constraints. However, due to current pandemic condition, touchless interactions via gesture and voice recognition device are welcome. Drivers asked for studying the security level of voice and gesture commands in case for instance someone who is not the train driver tries to use voice or gesture commands. Firstly, physical devices are not protected, so someone can already act on the train if they grad the manipulator. Moreover nowadays, voice assistant on GSM can recognize their owner voice and security software are able to recognize face and blur the screen if someone is spying on personal phone. Those technologies can be enabled in driving cabin. If there are enable, a workaround will be needed for drivers training.

Drivers also asked for more action on computer, and some of them stated that assistance tool have to be redesigned because as long as drivers are accountable, they must feel they remain in control. Moreover, such assistance needs the development of drivers' state assessment and monitoring devices. For instance, some drivers already complained about concentration loss and negative impact on workload for the dead man's switch verification. Due to human complexity, HMI can therefore become problem makers instead problem solvers. Correlation between information from HMI and behaviour of the train via automated or manual tasks has to be verified on field. Moreover, task allocation between a driver and a train has to consider human and technical advantages and weaknesses in order to take advantage of the benefits of one to compensate the weaknesses of the other By the end, the most commonly mentioned problem concerning nested situation and cascading alarms. Drivers complained about the avalanche effect while driving, i.e. a lot of events come in a same time. As the Survey 2 has involved a limited number of participants (and most of them had more than 10 years of experience), a short-term perspective will consist as an extended study that could imply young drivers who may be familiar with innovative technology like voice and gesture recognition systems.

Table 1 . List of technologies for survey 1

 1

	Technologies	Action(input)	Information(output)
	Audio	Voice control	Audible notification
	Touch Screen	Tactile Control	Screen reading
	Gesture	Gesture	N/A
		recognition
	Visual	N/A	Head-Up Display
			(HUD)
	Haptical	Manipulator	Feedback force

Table 2 . Result of the comparison between EXP1-SV1 et EXP2-SV2

 2

	KEY elements			AUXILIARY systems		ANNEXES devices
	Groups	Tasks		Groups	Tasks		Groups	Tasks
		Action	Information		Action	Information		Action	Information
	Situation	Touch	divergence	Station stops	Touch	divergence	Lighting	Touch	Screen
	awareness	(Gesture)			(Gesture)			(gesture)	(HUD)
	Speed	Haptic	divergence	Accessories	Touch	divergence	Comfort	Touch	Screen
	regulation	(Gesture)			(Gesture)		systems	(gesture)	(HUD)
	Flow	Touch	divergence	Power	Touch	divergence	Configuration	Touch	Screen
	Management	(Gesture)		management	(Gesture)			(gesture)	(HUD)

Table 3 . Divergence cases between EXP1-SV1 et EXP2-SV2

 3

	Group	Interaction SV1	SV2
	Situation awareness		Audible (HUD)	HUD
	Speed regulation Flow Management Station stops Accessories	Information	HUD Audible Equality for the three technologies HUD HUD (Haptic) HUD Screen HUD Screen (HUD)
	Power management		Screen HUD	HUD (screen)

ACKNOWLEDGMENTS

This project has received funding from the European Union's Horizon 2020 research and innovation program under Grant Agreement No 881814. The present research work has also been supported by:

• The French Ministry of Higher Education and Research,

• And The Hauts-de-France Region.

The authors gratefully acknowledge the support of these institutions.