Solow's Struggle with Medium-Run Macroeconomics: 1956-1995
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Principles of MICROECONOMICS an Open Text by Douglas Curtis and Ian Irvine
with Open Texts Principles of MICROECONOMICS an Open Text by Douglas Curtis and Ian Irvine VERSION 2017 – REVISION B ADAPTABLE | ACCESSIBLE | AFFORDABLE Creative Commons License (CC BY-NC-SA) advancing learning Champions of Access to Knowledge OPEN TEXT ONLINE ASSESSMENT All digital forms of access to our high- We have been developing superior on- quality open texts are entirely FREE! All line formative assessment for more than content is reviewed for excellence and is 15 years. Our questions are continuously wholly adaptable; custom editions are pro- adapted with the content and reviewed for duced by Lyryx for those adopting Lyryx as- quality and sound pedagogy. To enhance sessment. Access to the original source files learning, students receive immediate per- is also open to anyone! sonalized feedback. Student grade reports and performance statistics are also provided. SUPPORT INSTRUCTOR SUPPLEMENTS Access to our in-house support team is avail- Additional instructor resources are also able 7 days/week to provide prompt resolu- freely accessible. Product dependent, these tion to both student and instructor inquiries. supplements include: full sets of adaptable In addition, we work one-on-one with in- slides and lecture notes, solutions manuals, structors to provide a comprehensive sys- and multiple choice question banks with an tem, customized for their course. This can exam building tool. include adapting the text, managing multi- ple sections, and more! Contact Lyryx Today! [email protected] advancing learning Principles of Microeconomics an Open Text by Douglas Curtis and Ian Irvine Version 2017 — Revision B BE A CHAMPION OF OER! Contribute suggestions for improvements, new content, or errata: A new topic A new example An interesting new question Any other suggestions to improve the material Contact Lyryx at [email protected] with your ideas. -
Working Paper No. 12
The Real Wage And The Marginal Product of Labor Tracy Mott* Working Paper No. 12 November 1988 * Research Associate, Program on Political and Economic Change, Institute of Behavioral Science, and Assistant Professor, Department of Economics, University of Colorado, Boulder. Part of this work was done while on research fellowship at the Jerome Levy Economics Institute, Annandale-On-Hudson, NY. 1 The opening section of the Sumner 1987 issue of the Journal of Post Kevnesian Economics contained a symposium on the question of the significance of the concept of the marginal productivity of labor to Post Keynesian economics. This took the form of a discussion surrounding John Maynard Keynes's statement that his theory of employment in Chapter Two of the General Theorv did not reject "the first classical postulate" of equality between the real wage and the marginal product of labor. Though there were a number of interesting points raised and insights made, the discussion was hardly conclusive. I would like to add another intervention on the subject. I begin by noting Paul Wells's (1987) discussion, which I think very clearly points out the first and perhaps most important divergence of Keynes's theory from the neoclassical theory of employment. That is, Keynes's acceptance of the proposition that the real wage is equal to the marginal product of labor should not be taken as Keynes's saying that the level of employment is determined by the real wage, at that level where the real wage equals the marginal product of labor. Rather, Wells notes, for Keynes the level of employment is determined by the level of effective demand. -
< LRMC, MR = SRMC Iii) SRAC < LRAC, SRMC > LRMC
Econ 100A Fall 2001 Prof. Daniel McFadden Problem Set 8 1. True/False: state your reasons clearly and succinctly. a) A profit-maximizing firm will always minimize costs. True. b) In the long run a firm always operates at the minimum level of average costs for the optimally sized plant to produce a given amount of output. False. 2. Assume downward sloping or flat demand and a U-shaped LRAC curve. In each of the following situations, determine graphically and/or verbally: a) Does the firm have the cost-minimizing amount of capital given its output level? If not, should the firm increase or decrease its amount of capital given its output? b) Does the firm have the profit maximizing level of output given its amount of capital? If not, should the firm increase or decrease its level or output, given its capital? If the situation is impossible, state why. Answers: first, it is to be understood that capital input is here regarded as the fixed costs---fixed in the short run, that is. So the two questions for each case come down to your judgment in the short term and long term. Secondly, refer to Fig.21.6 and 21.10 for a graphical understanding of the explanation. i) SRAC > LRAC, SRMC > LRMC, MR = SRMC MR=SRMC shows that the firm is at an output level that maximizes the profit, given its capital in the short term. However, because SRMC>LRMC and SRAC>LRAC (See Fig. 21.10), the amount of capital is not optimized to minimize costs at the present output level. -
Cambridge Economics: a Place, a People, an Academic Community and Its Palgrave Companion
Cambridge Economics: A place, a people, an academic community and its Palgrave Companion Cord, Robert A. (editor), 2017, The Palgrave Companion to Cambridge Economics, London: Palgrave Macmillan, 2 Vol., pp. XVII, 1225. £ 165 (Hardcover) ISBN 978-1-137-41233-1 The Palgrave Companion’s two volume set on Cambridge Economics is part of an ongoing project by Robert Cord to bring together contributions that capture Economics, as it was, and is, practised in historically important universities for the subject. This publication project follows Cord’s Ph.D. work that discussed research centres in economics in the 1930s, with special reference to Cambridge, Oxford and the LSE (Cord, 2012). In that book Cord analysed the relative success of these research centres by utilising a framework that identified sociological, technical, intellectual and financial factors to explain why some centres where more successful than others. In contradistinction, this edited set starts with a collection of surveys ‘from within’, with academics reviewing fields of research through narratives that capture specific traditions and/or the interface of economics with related fields/faculties in Cambridge. These form Part I, titled “Themes in Cambridge Economics”. Part II, titled “Some Cambridge Economists”, has an extensive set of intellectual biographies of the major economists associated with Cambridge, who also figure in the narratives constructed in Part I. All of this yields more than a thousand pages of text, from fifty one academics contributing the various pieces. This is a herculean task, and the very scope of the project and its execution awes the reader. It is commendable that Cord not only completed this task but also amassed contributions from celebrated academics that know intimately Cambridge and its many traditions. -
Nobel Memoir
Memoir JOSEPH E. STIGLITZ I was born in Gary, Indiana, at the time, a major steel town on the southern shores of Lake Michigan, on February 9, 1943. Both of my parents were born within six miles of Gary, early in the century, and continued to live in the area until 1997. I sometimes thought that my perignations made up for their stability. There must have been something in the air of Gary that led one into economics: the first Nobel Prize winner, Paul Samuelson, was also from Gary, as were several other distinguished economists. (Paul allegedly once wrote a letter of recommendation for me which summarized my accomplishments by saying that I was the best economist from Gary, Indiana.) Certainly, the poverty, the discrimination, the episodic unemployment could not but strike an inquiring youngster: why did these exist, and what could we do about them. I grew up in a family in which political issues were often discussed, and debated intensely. My mother’s family were New Deal Democrats—they worshipped FDR; and though my uncle was a highly successful lawyer and real estate entrepreneur, he was staunchly pro-labor. My father, on the other hand, was probably more aptly described as a Jeffersonian democrat; a small businessman (an independent insurance agent) himself, he repeatedly spoke of the virtues of self-employment, of being one’s own boss, of self-reliance. He worried about big business, and valued our competition laws. I saw him, conservative by nature, buffeted by the marked changes in American society during the near-century of his life, and adapt to these changes. -
Time, Expectations and Financial Markets
Institute for International Political Economy Berlin Time, Expectations and Financial Markets Author: Hansjörg Herr Working Paper, No. 03/2009 Editors: Trevor Evans ■ Eckhard Hein ■ Hansjörg Herr ■ Martin Kronauer ■ Birgit Mahnkopf Time, Expectations and Financial Markets Hansjörg Herr (Berlin School of Economics and Law) Abstract After the breakdown of the Bretton Woods system and the beginning of the neoliberal revolution, financial markets became very unstable. The theoretical background of the neoliberal revolution stands in the tradition of Léon Walras. He was very much impressed by Isaac Newton, used his methodology and wanted to lift economic thinking on the same level as Newton’s mechanics. The rational expectation approach and the hypothesis of efficient financial markets follow this methodology. In a Keynesian-Schumpeterian approach, expectations cannot be explained by economic models – as in the case of rational expectations. The economy is not a self-regulating stable system. Development depends on social and political processes which are beyond the scope of narrow economic modelling. The world needs a fundamental re-regulation of asset and financial markets as well as labour markets to turn globalisation into a project with more winners than there are now. JEL Code: B22, E12, E22 Key Words: Macroeconomics; Post-Keynesian, Financial Markets and the Macroeconomy Address for correspondence: Prof. Dr. Hansjörg Herr Berlin School of Economics and Law Badensche Str. 50-51 10825 Berlin Germany e-mail: [email protected] 1 1. Introduction Over the last decades financial markets have become very unstable. Asset prices (shares, real estate, currencies, and natural resources) followed a rollercoaster with violent ups and downs. -
Money Neutrality Long Run and Short
Long Run and Short Run • In the short run, the price level is fixed at some level. the analysis heretofore has been a short run analysis. PP542 • In the long run, prices of factors of production and of output are allowed to adjust to demand and supply in the ir respec tive mar ke ts. Wages adjust to the demand and supply of labor. Inflation and Exchange Rates Real output and income are determined by the amount of workers and other factors of production—by the economy’s productive capacity—not by the supply of money. The interest rate depends on the supply of saving and the demand for saving in the economy and the inflation rate—and thus is also independent of the money supply level. K. Dominguez 2010 2 Long Run and Short Run (cont.) Money Neutrality • In the long run, the level of the money supply • All else equal, an increase in the level of does not influence the amount of real output a country’s money supply causes a nor the interest rate. proportional increase in its price level in • But in the long run, prices of output and the long run. inputs adjust proportionally to changes in the • money supply: This is called money neutrality –it is another way of saying that an increase Long run equilibrium: Ms/P = L(R,Y) in money is not like an increase in Ms = P x L(R,Y) production – it does not influence any increases in the money supply are matched by “real” variables. proportional increases in the price level. -
Walking a Tightrope: the Neoclassical Synthesis in Action
Walking a tightrope: the neoclassical synthesis in action Michaël Assous1 Université Paris 1 Panthéon-Sorbonne, Phare Muriel Dal Pont Legrand Université Cote d’Azur, CNRS GREDEG Sonia Manseri Université Paris 1 Panthéon-Sorbonne, Phare Preliminary draft Abstract: The neoclassical synthesis which emerged in the late 1950s is associated to a specific understanding of the connection between short-run Keynesian and long-run neoclassical analyses. In the early 1960s, when economists from both Cambridges tried to revisit the conditions likely to guarantee the stability of long-run paths, this view was challenged. Then, issues related to the determinants of income distribution and expectations were raised. Our goal in this article is to discuss the significance of these findings and see how they challenged the whole neoclassical synthesis. Using original archives material from Duke and Cambridge (UK) Universities, the paper pays mostly attention to arguments raised by Frank Hahn, Nicholas Kaldor, Paul Samuelson, Armatya Sen and Robert Solow. 1 Contact : [email protected]. 1 Introduction In 1955, Samuelson introduced the notion of neoclassical synthesis in the third edition of his Economics. With the works of Robert Solow, James Meade, Trevor Swan and James Tobin, the synthesis started designating the outcome of a process by which short-run Keynesian and long-run neoclassical analyses were made compatible. In a nutshell, as long as the economy was supposed to be managed on a Keynesian-basis in the short-run, the neoclassical growth model was seen as the more appropriate tool to analyze and sustain full-employment growth. In addition, with the publication of Solow 1957 paper, the neoclassical synthesis meant a particular way to empirically deal with the long-run impact of technical progress. -
Nine Lives of Neoliberalism
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Plehwe, Dieter (Ed.); Slobodian, Quinn (Ed.); Mirowski, Philip (Ed.) Book — Published Version Nine Lives of Neoliberalism Provided in Cooperation with: WZB Berlin Social Science Center Suggested Citation: Plehwe, Dieter (Ed.); Slobodian, Quinn (Ed.); Mirowski, Philip (Ed.) (2020) : Nine Lives of Neoliberalism, ISBN 978-1-78873-255-0, Verso, London, New York, NY, https://www.versobooks.com/books/3075-nine-lives-of-neoliberalism This Version is available at: http://hdl.handle.net/10419/215796 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative -
ECON 110 Principles of Macroeconomics
South Central College ECON 110 Principles of Macroeconomics Common Course Outline Course Information Description Macroeconomics is the study of issues that affect whole economies, including economic growth, employment levels, management of the money supply, international trade, and economic instability. The course will examine tools governments can use to stabilize and grow economies, as well as controversies surrounding their use. Prerequisites: READ0090 with a grade of C or Higher or a minimum score of 78 on the Accuplacer Reading Comprehension test. This class satisfies MnTC Goal Area 5 (History and the Social and Behavioral Sciences) and MnTC Goal Area 9 (Ethical and Civic Responsibility). Total Credits 3.00 Total Hours 48.00 Types of Instruction Instruction Type Credits/Hours Lecture 3 Pre/Corequisites READ0090 with a grade of C or Higher or a minimum score of 78 on the Accuplacer Reading Comprehension test. Institutional Core Competencies 1 Analysis and inquiry: Students will demonstrate an ability to analyze information from multiple sources and to raise pertinent questions regarding that information. 2 Civic knowledge and engagement- local and global: Students will understand the richness and challeng e of local and world cultures and the effects of globalization, and will develop the skills and attitudes to function as “global citizens." 3 Teamwork and problem-solving: Students will demonstrate the ability to work together cohesively with diverse groups of persons, including working as a group to resolve any issues that arise. Course Competencies 1 Apply the economic method. Learning Objectives Define Economics. Common Course Outline September, 2016 Apply the scientific method in economics. Demonstrate scarcity, opportunity costs, and economic growth with the production possibility curve model. -
Mythical Expectations
The University of Notre Dame Australia ResearchOnline@ND Business Book Chapters School of Business 2008 Mythical Expectations Robert Leeson University of Notre Dame Australia, [email protected] Warren Young Follow this and additional works at: https://researchonline.nd.edu.au/bus_chapters Recommended Citation Leeson, R., & Young, W. (2008). Mythical expectations. In R. Leeson (Ed). The anti-Keynesian tradition. New York, NY: Palgrave Macmillan. This Book Chapter is brought to you by the School of Business at ResearchOnline@ND. It has been accepted for inclusion in Business Book Chapters by an authorized administrator of ResearchOnline@ND. For more information, please contact [email protected]. Chapter 7 Mythical Expectations Robert Leeson and Warren Young According to the conventional account, economists have relied on three types of expectations: static (contained in the original Keynesian Phillips curve); adaptive (introduced by Milton Friedman’s in the course of his Monetarist counter-revolution) and rational (part of Robert Lucas’s natural rate New Classical counter revolution). This chapter argues that there a fourth expectational type: the myths associated with these natural rate counter revolutions. The conventional chronology regarding the relationship between expectations and the Phillips curve is that Friedman's 1967 AEA Presidential Address (Friedman, 1968a) transformed macroeconomics by focusing on the neglect of expectations in the Keynesian Phillips curve. However, the archival evidence reveals this conventional account to be both inadequate and inaccurate . In this chapter, it will be shown that Phillips allocated a more destabilising role to inflationary expectations than did Friedman and that the adaptive expectations formula used to undermine the original Phillips curve was actually provided to Friedman by Phillips. -
Paul Samuelson's Ways to Macroeconomic Dynamics
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Boianovsky, Mauro Working Paper Paul Samuelson's ways to macroeconomic dynamics CHOPE Working Paper, No. 2019-08 Provided in Cooperation with: Center for the History of Political Economy at Duke University Suggested Citation: Boianovsky, Mauro (2019) : Paul Samuelson's ways to macroeconomic dynamics, CHOPE Working Paper, No. 2019-08, Duke University, Center for the History of Political Economy (CHOPE), Durham, NC This Version is available at: http://hdl.handle.net/10419/196831 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Paul Samuelson’s Ways to Macroeconomic Dynamics by Mauro Boianovsky CHOPE Working Paper No. 2019-08 May 2019 Electronic copy available at: https://ssrn.com/abstract=3386201 1 Paul Samuelson’s ways to macroeconomic dynamics Mauro Boianovsky (Universidade de Brasilia) [email protected] First preliminary draft.