Suchergebnisse

The 800 pound gorilla in the room of macroeconomics is the question of why the overlapping generations model didn't become the central workhorse model for macroeconomics. Introduced in 1958 by Paul Samuelson, the model postulates an infinite number of finite-lived families. This is in stark contrast to the more dominant neoclassical growth model, which is based on the assumption that real economies are populated by a finite number of dynastic families. Despite the greater realism of the former model and the inherent implausibility of the assumptions underlying the growth model, the growth model has become dominant. The authors here explore the co-evolution of the two models to shed light on why this happened, spanning the entire post-WWII era.

Intro -- Acknowledgments -- Contents -- 1 Introduction, Keynes's Own IS-LM Approach -- References -- 2 Prolog to Keynes's IS-LM, 1930 to 1932 -- 2.1 The Failure of A Treatise on Money -- 2.2 The Treatise and IS-LM: 1930 -- 2.3 Back to the Drawing Board: 1931 and 1932 -- References -- 3 The Advent of Keynes's IS-LM, 1933 -- 3.1 GTE/5/423 -- 3.2 The Monetary Theory of Employment -- 3.3 Mr. Keynes's Multiplier -- 3.4 The Marginal Efficiency of Capital -- 3.5 Keynes's 1933 Lectures -- References -- 4 "The Missing Link": Keynes's Own Lecture Notes, December 4, 1933, Impact and Implications -- 4.1 Keynes's Handwritten IS-LM Model: GTE/5/419 -- 4.2 GTE/5/419 Employment Equations -- 4.3 The Rashomon Effect -- References -- 5 Reconstructing Keynes's IS-LM Approach, 1931 to 1937 -- 5.1 1931 to 1933: A Review -- 5.2 The Mid-1934 Drafts -- 5.3 The Marginal Efficiency of Capital -- 5.4 Keynes's 1934 Lectures -- 5.5 1935: De-formalizing and Re-formalizing the General Theory -- 5.6 The General Theory: Extracting the IS-LM Model -- 5.7 Keynes's Verbal IS-LM Approach and QJE 1937 -- 5.8 De-formalization: Did Keynes "Do a Marshall?" -- References -- 6 Keynes's Equations and Early Post-General Theory IS-LM Models -- 6.1 Bryce, Champernowne, Reddaway, Harrod, and Meade -- 6.2 Hicks and Lange -- 6.3 Other Early IS-LM Models -- References -- 7 The Legacy of December 1933: Re-interpreting Mr. Keynes -- References -- Appendix -- Robert B. Bryce Notes: December 4, 1933 -- Alec Cairncross Notes: December 4, 1933 -- Marvin Fallgatter Notes: December 4, 1933 -- Walter Salant Notes: December 4, 1933 -- Lorie Tarshis Notes: December 4, 1933 -- Bryn Thring Notes: December 4, 1933 -- Index.

IS-LM is perhaps the prime example of `cognitive dissonance' in economics, and is problematic to many economists. On the one hand, the IS-LM model is still taught by many academic economists or they use it to derive the AD-AS approach. On the other hand, the same economists realize the limitations of the basic IS-LM model and would not now use it for policy analysis, as they did in the past. The distinction between pedagogical and analytical efficacy is made by all the authors in this volume regarding the IS-LM model. Indeed, even those who would reject using the model for modern policy analysis still see the basic model as useful for teaching purposes. Moreover, in an augmented form, some of the authors in this volume would even see fit to use IS-LM for modern policy analysis. As will be seen, therefore, the IS-LM model is `not yet dead'. Rather, the model's `plasticity' has enabled it to undergo a metamorphosis into augmented form, enabling its continuing utilization in economics accordingly

In this essay, we focus on three district Federal Reserve Bank presidents who took on the role of public intellectual in the 1970s and early 1980s. They reflected their districts' economic concerns, presenting them and their own views at the Federal Open Market Committee (FOMC) while expressing both in public pronouncements in speeches and in print. Despite possible dissonance, the presidents were able to integrate information emerging from their district constituents with the overall state of the national economy in their input to the FOMC, while explaining the economic situation—in the framework of their economic worldviews—to the public at large, that is to say, both communicating their views externally and disturbing the internal status quo of economic thinking at the Federal Reserve.