nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2020‒05‒25
seven papers chosen by
Erik Thomson
University of Manitoba

  1. Have Macroeconomic Models Lost Their Connection with Economic Reality? By Tom van Veen
  2. Journal of the History of Economic Thought Preprints – Jewish social science and the analysis of Jewish statistics in the early 20th century By Vallois, Nicolas
  3. Expectations and Full Employment: Hansen, Samuelson and Lange By Michaël Assous; Olivier Bruno; Vincent Carret; Muriel Dal Pont Legrand
  4. Moving contexts onto new roads: Clues from other disciplines By Welter, Friederike; Baker, Ted
  5. Pensar fuera de la caja: la economía mexicana y sus posibles alternativas By Nadal Egea, Alejandro
  6. How the World Achieved Partial Consensus on Monetary Policy By James B. Bullard
  7. Extending Edgeworth: Labour Exchange and Production By Michael McLure; Aldo Montesano

  1. By: Tom van Veen
    Abstract: Macroeconomic theory has developed into increasingly sophisticated mathematical models. In the words of Mankiw, macroeconomics has developed from engineering into science. The Global Financial Crisis (GFC) revealed that the empirical relevance and the usefulness of these models is debatable. Why has this occurred? Who have been the key players in this development? What have been the policy implications of this development? This paper addresses these points by providing an overview of the development of macroeconomic theory over the past 40 years. The focus is on the main lines of thinking and the story behind the models more so than on the mathematical details of these models. I argue that crises have been the main driver of changes in macroeconomic theory and that the current debates after the GFC will be the start of a more plural approach to macroeconomics, in which engineers will regain their place.
    Keywords: macroeconomic theory, Keynes, Friedman, Lucas
    JEL: B22 E12 E60
    Date: 2020
  2. By: Vallois, Nicolas
    Abstract: The late 19th century saw the multiplication of statistical studies on Jewish populations. This literature is now known as “Jewish Statistics” or “Jewish Social Science” (JSS). This article focuses on the articles published in der Zeitschrift für Demographie und Statistik der Juden (Journal for Demography and Statistics of the Jews, ZDSJ). The ZDSJ was the main journal in JSS and appeared from 1905 until 1931. Existing scholarship on JSS has either focused on the influence of Zionism (Hart, 2000) or eugenics and race theory (Efron, 1994). This article proposes to relate JSS to the history of economics and statistics. As suggests the intellectual profile of the main contributors to the ZDSJ, we argue that JSS was a by-product of the German historical school in economics. Though JSS was intended to a mostly Jewish audience, its organization and methods were clearly inspired by those of German economists.
    Date: 2020–05–07
  3. By: Michaël Assous (Université Lyon 2, CNRS, Triangle); Olivier Bruno (Université Côte d'Azur, CNRS, GREDEG, France; Skema Business School); Vincent Carret (Université Lyon 2, CNRS, Triangle); Muriel Dal Pont Legrand (Université Côte d'Azur, CNRS, GREDEG, France)
    Abstract: From the outset, expectations were a central part of the first macrodynamic models and early growth theories. In the 1940s, a third line of research emerged which questioned the capacity of an economy to reach full-employment equilibrium. Starting with Alvin Hansen (1938) and culminating with Oskar Lange (1944), the crux of the debate evolved from the existence of full employment equilibrium to analysis of its stability, suggesting an increased role for expectations and finally challenging the economic system's global stability. The present paper traces those debates through the contributions of Hansen, Paul Samuelson and Lange. Using archives materials, we show that while Samuelson's analysis of instability remained implicit, his correspondence reveals that he encouraged Oskar Lange to examine it more carefully. Lange's results are presented in his 1944 Cowles Commission Monograph. We point out that his contribution cannot be understood in isolation either from his exchanges with Samuelson or the way that Keynesian ideas were being interpreted in the United States. The paper finally questions Samuelson's view on instability and expectations.
    Keywords: expectations, (in-)stability, full-employment, wages dynamics, Hansen, Samuelson, Lange
    JEL: B2 B22 B3 D5
    Date: 2020–05
  4. By: Welter, Friederike; Baker, Ted
    Abstract: This paper responds to Welter's (2011) call to pay more attention to the diversity of entrepreneurship in theorizing contexts by examining how places come to be understood as entrepreneurial. We draw briefly and selectively on ideas from a quirky set of disciplines, looking at how topics such as narratives and language, memories of the past, built environments and constellations of power among groups of people interact to shape the emergence and decline of "everyday entrepreneurship places". Our discussion illustrates some useful cues our research might draw on to challenge and improve theoretical understanding of place in entrepreneurship.
    Keywords: contextual entrepreneurship,context,entrepreneurial place,theorizing contexts,entrepreneurship
    Date: 2020
  5. By: Nadal Egea, Alejandro
    Abstract: Este informe examina las consecuencias, bases teóricas y restricciones que impone el modelo de política macroeconómica neoliberal en México. En sus diferentes capítulos se ofrece un análisis crítico de la economía mexicana en los últimos 30 años, se examina el corazón teórico del ideal del libre mercado y se abordan componentes específicos del paquete de políticas dominante: política monetaria, dinero endógeno y política macroeconómica, política fiscal y comercial. En cada uno se examinan las implicaciones de una teoría del mercado defectuosa y se identifican problemas subsecuentes como contradicciones internas, supuestos irreales o francamente equivocados. La conclusión general es que el paquete de políticas dominante impone restricciones poderosas para empujar el sistema económico en la dirección de un estilo de desarrollo distinto, más sustentable. La liberalización y desregulación financiera imponen una postura macroeconómica del banco central que se sujeta a las preferencias de los bancos privados y los flujos de capital, las políticas monetaria y fiscal pasivas son incapaces de manejar la demanda agregada de forma socialmente sustentable y el cambio estructural requerido para enfrentar la crisis social y ambiental exige políticas selectivas severamente restringidas por el marco legal. Pero existen alternativas. La reflexión crítica sobre la teoría y política económicas es indispensable para buscar opciones que abran nuevos espacios de política.
    Date: 2020–05–15
  6. By: James B. Bullard
    Date: 2020–03–06
  7. By: Michael McLure (Economics Discipline, Business School, University of Western Australia); Aldo Montesano (Bocconi University)
    Abstract: This study presents an account of the implicit’ treatment of production associated with Edgeworth’s illustration of Friday’s and Crusoe’s economic relationship and attempts to extend that illustration to incorporate production on an ‘explicit’ basis. It reflects on Edgeworth’s famous Figure 1 from mathematical Psychics and what the shape of Friday’s and Crusoe’s indifference curves would be, when mapped in an allocation plane, if the production of wheat implied by the Friday-Crusoe scenario is treated as merely ‘incidental’, in which case production is ignored, and if it is treated as ‘intentional’. Based on that reflection, Edgeworth’s figure is extended to explicitly illustrate how the exchange of Friday’s labour to Crusoe for remuneration influences, and is influenced by, Friday’s production of wheat for Crusoe. The extension to Edgeworth’s illustration has been undertaken for two cases: first, the simplified and unrealistic, although theoretically useful, case that sets aside Crusoe’s initial stock of wheat; and second, the more realistic but more complex case that incorporates Crusoe’s initial stock of wheat.
    Keywords: Box diagram, Edgeworth, Exchange, Indifference, Production
    JEL: B13 D51
    Date: 2020

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