nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2009‒05‒16
five papers chosen by
Erik Thomson
University of Manitoba

  1. The young Lamfalussy : an empirical and policy-oriented growth theorist By Ivo Maes
  2. The Money Supply in Macroeconomics By Peter Howells
  3. The Last of the American Ag Economists By Epperson, James E.
  5. The Impact of the Asian Miracle on the Theory of Economic Growth By Robert W. Fogel

  1. By: Ivo Maes (National Bank of Belgium, Research Department; Université catholique de Louvain, Robert Triffin Chair; ICHEC Brussels Management School)
    Abstract: Alexandre Lamfalussy has been highly influential in the process of European monetary and financial unification. In this paper we will analyse the work of the "Young Lamfalussy" (from the mid 1950s to the mid 1960s). Lamfalussy started his career as an academic, focusing on growth theory and Belgian and European growth patterns in the post-war period. His work is still considered to be influential in the recent literature on Europe's post-war economic growth. It fits nicely into the Keynesian tradition: Lamfalussy's analytical frameworks were often inspired by Keynesian models, in his analysis he emphasised vicious and virtuous circles in the economy and, in his policy conclusions, he was a clear partisan of more planning. However, certain elements, typical also of Lamfalussy's later work, were already present, not least a strong European conviction and an eclectic approach towards economics, blending economic theory and empirical data beautifully to elucidate crucial policy problems
    Keywords: Lamfalussy, European growth patterns, Keynesian economics, Belgium, macroeconomic policy-making
    JEL: B E
    Date: 2009–04
  2. By: Peter Howells (UWE, Bristol)
    Abstract: The notion that the quantity of money in an economy might be endogenously determined has a long history. Even so, it has never been part of mainstream economic thinking which has remained dominated by the view that the policymaker somehow controls the stock of money and that interest rates are market-determined. However, the need to design and operate a monetary policy that works for modern economies as they are currently constructed, has led to the emergence of the so-called ‘new consensus macroeconomics’ in which it is recognised that the policymaker sets a short-term interest rate and the quantities of money and credit are demand-determined. This paper looks at the way in which this ‘new consensus’ is (at last) forcing a recognition, in the teaching of money, that the money supply is endogenously determined. It also shows how we can take this further by adding a banking sector to a model of the real economy in which the money supply is endogenously determined. The paper ends by showing how some of the issues currently emerging in the new consensus are very closely related to earlier debates amongst post Keynesian economists.
    Keywords: Money supply; macroeconomics
    JEL: E50
    Date: 2009–04
  3. By: Epperson, James E.
    Abstract: It has become more and more difficult to recruit prospective American Ph.D. students in Agricultural and Applied Economics. The purpose of this study was to determine the extent of the problem, to ascertain why with respect to location and other important factors, and hopefully deduce recruiting solutions. Results indicate that the paramount factors in a profile of those willing to pay the price in terms of sacrifice and effort to obtain a Ph.D. encompass willingness to accept a relatively low starting salary with a Ph.D., likely to be a Foreign National, prone to be in a Midwestern university, and willing to relocate globally. Generally, the Ph.D. starting salary would have to increase dramatically to change the minds of graduate students not intending to pursue a Ph.D. including most American graduate students. A change in public policy appears to be the only real solution.
    Keywords: American, Agricultural Economists, Ph.D., Salaries, Probit, Labor and Human Capital,
    Date: 2009
  4. By: George Grantham
    Abstract: Cognitive obstacles to perception of novelty on the scientific frontier created obstacles to evaluating scientific work and recruiting scientific workers had to be overcome for the scientific enterprise to expand to the point where it could significantly affect factor productivity. The principal problems arise from the idiosyncracy of observations on the research frontier and the exceptional specificity of the human capital employed in identifying and validating scientific novelty. Resolution of these problems was by no means inevitable or predictable, as the scientific institutions which had emerged as the principal institutional support of ‘Open Science’ in the seventeenth and eighteenth century could not be efficiently scaled up to accommodate the requirements of a greatly expanded scientific enterprise. This paper recounts how in the second quarter of the nineteenth century the emergence of decentralized university-based research networks in Germany resolved the problem of scale, laying the foundations for the discoveries that powered the ‘Second Industrial Revolution’ of the late nineteenth and early twentieth century.
    JEL: D80 D82 D83 D89 O17 O30 O31 O34
    Date: 2009–05
  5. By: Robert W. Fogel
    Abstract: This paper, divided into seven sections, considers the development of economic growth theory in light of the spectacular advances of the economies of China, India, and Southeast Asia. Section 1 reviews the debate over the sources of technological change and the measurement of total factor productivity that emerged during the second half of the 1950s. Section 2, “Convergence and Divergence,†deals with the closing of the economic gap between the U.S. and other OECD nations that existed after World War II and the increasing economic gap between OECD and Third World nations. Section 3, “The Asian Miracle,†describes the new recognition among Western economists that the sustained, very rapid growth in China and Southeast Asia was changing the global economic balance. Section 4, “Endogenous Economic Growth,†deals with the work of a group of mainly verbal theorists, including Simon Kuznets and T.W. Schultz, who sought to define social, political, demographic, religious, and ideological conditions that preceded the epoch of modern economic growth, which began in the late eighteenth or early nineteenth centuries. That line of thought was extended by more mathematical economists who studied the invention and modeled the diffusion of new technologies in agriculture (Zvi Griliches) and industry (Edwin Mansfield). Section 5, “Bridges between Two Cohorts of Theorists on Technological Change,†compares the work of Griliches, Richard Nelson, and Dale W. Jorgenson, whose quantitative analysis of endogenous technological change spanned the period from the mid-1950s to the new cohort of growth theorists that emerged during the mid- to late-1980s. Section 6, “The Economic Historians,†focuses on their investigations of the interrelationships of the evolution of social, economic, and political institutions and on findings about the impact of institutional changes on invention, innovation, the process of technological change, and economic growth. Section 7, “The Impact of the Asian Economic Miracle on Growth Theory,†focuses on the theorizing about the likely impact of the rapidly expanding Asian economies on the shaping of the global economy over the next several decades.
    JEL: B2 O4 O53
    Date: 2009–05

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