On Limiting the Domain of Inequality: The Legacy of James Tobin

The Keynesian macroeconomist James Tobin presented an ambitious program for social policy, sketched in the titles of "It Can be Done! Conquering Poverty in the US by 1976" (1967), "On Limiting the Domain of Inequality" (1970), "On Improving the Economic Status of the Negro" (1965), and "Raising the Incomes of the Poor" (1968). Tobin advocated means-tested cash transfers (negative income tax), to reduce poverty without interfering with market determination of relative prices (a position shared with Milton Friedman), paired with "non-market egalitarian distributions of commodities essential to life and citizenship" (education, food stamps, basic housing). The latter position contrasted with Friedman's Chicago school approach. Tobin's message continues to be relevant for reduction of poverty and inequality. Tobin's approach is contrasted with the neo-conservative analysis of the causes of poverty (exemplified by Herrnstein and Murray, but going back to Senior and Chadwick's Poor Law Report of 1834) that has been reflected in "the end of welfare as we know it".Inequality

James Tobin and Modern Monetary Theory

This paper examines the relationship of the monetary economics of James Tobin to modern monetary theory, which has diverged in many ways from the directions taken by Tobin and his associates (for example, moving away from multi-asset models of financial market equilibrium and from monetary models of long-run economic growth) but which has also built upon aspects of his work (e.g., the use of simulation and calibration in his work on inter-termporal consumption decisions). Particular attention will be paid to Tobin's unpublished series of three Gaston Eyskens Lectures at Leuven on Neo-Keynesian Monetary Theory: A Restatement and Defense, and the paper draws on my forthcoming volume of Tobin for Palgrave Macmillan's series on Great Thinkers in Economics

Macroeconomic Dynamics at the Cowles Commission from the 1930s to the 1950s

This paper explores the development of dynamic modelling of macroeconomic fluctuations at the Cowles Commission from Roos, Dynamic Economics (Cowles Monograph No. 1, 1934) and Davis, Analysis of Economic Time Series (Cowles Monograph No. 6, 1941) to Koopmans, ed., Statistical Inference in Dynamic Economic Models (Cowles Monograph No. 10, 1950) and Klein’s Economic Fluctuations in the United States, 1921-1941 (Cowles Monograph No. 11, 1950), emphasizing the emergence of a distinctive Cowles Commission approach to structural modelling of macroeconomic fluctuations influenced by Cowles Commission work on structural estimation of simulation equations models, as advanced by Haavelmo (“A Probability Approach to Econometrics,” Cowles Commission Paper No. 4, 1944) and in Cowles Monographs Nos. 10 and 14. This paper is part of a larger project, a history of the Cowles Commission and Foundation commissioned by the Cowles Foundation for Research in Economics at Yale University. Presented at the Association Charles Gide workshop “Macroeconomics: Dynamic Histories. When Statics is no longer Enough,” Colmar, May 16-19, 2019

The Cowles Commission and Foundation for Research in Economics

Founded in 1932 by a newspaper heir disillusioned by the failure of forecasters to predict the Great Crash, the Cowles Commission promoted the use of formal mathematical and statistical methods in economics, initially through summer research conferences in Colorado and through support of the Econometric Society (of which Alfred Cowles was secretary-treasurer for decades). After moving to the University of Chicago in 1939, the Cowles Commission sponsored works, many later honored with Nobel Prizes but at the time out of the mainstream of economics, by Haavelmo, Hurwicz and Koopmans on econometrics, Arrow and Debreu on general equilibrium, Yntema and Mosak on general equilibrium in international trade theory, Arrow on social choice, Koopmans on activity analysis, Klein on macroeconometric modelling, Lange, Marschak and Patinkin on macroeconomic theory, and Markowitz on portfolio choice, but came into intense methodological, ideological and personal conflict with the emerging “Chicago school.” This conflict led the Cowles Commission to move to Yale in 1955 as the Cowles Foundation, directed by James Tobin (who had declined to move to Chicago to direct it). The Cowles Foundation remained a leader in the more technical areas of economics, notably with Tobin’s “Yale school” of monetary theory, Scarf’s computable general equilibrium, Shubik in game theory, and later Phillips and Andrews in econometric theory but as formal methods in economic theory and econometrics pervaded the discipline of economics, Cowles (like the Econometric Society) became less distinct from the rest of economics. This entry is part of an archivally-based history of the Cowles Commission and Foundation commissioned by the Cowles Foundation. This paper is the entry on “The Cowles Commission and Foundation for Research in Economics” in The New Palgrave Online https://link.springer.com/referencework/10.1057/978-1-349-95121-5 and is included as a Cowles Foundation Discussion Paper by the kind permission of Springer Nature

Irving Fisher, Ragnar Frisch and the Elusive Quest for Measurable Utility

Commitment to the behaviorist approach to utility theory, to the usefulness of mathematics in economic analysis and to equalization of the marginal utility of income as a principle of just taxation brought Irving Fisher and Ragnar Frisch to attempt to measure the marginal utility of income, and led them to collaborate in forming the Econometric Society and sponsoring the establishment of the Cowles Commission, institutions advancing economic theory in connection to mathematics and statistics. To be presented at a symposium at the University of Oslo, December 3, 2019, honoring the 50th anniversary of the award to Ragnar Frisch of the Royal Bank of Sweden Prize in Economic Science in Memory of Alfred Nobel and the 30th anniversary of the award of that prize to Trygve Haavelmo

Jacob Marschak and the Cowles Approaches to the Theory of Money and Assets

Jacob Marschak shaped the emergence of monetary theory and portfolio choice at the Cowles Commission (which he directed from 1943 to 1948, but with which he was involved already from 1937) at the University of Chicago, where he was the doctoral teacher of Leonid Hurwicz, Harry Markowitz and Don Patinkin, and then from 1955 at the Cowles Foundation at Yale University, where he was a senior colleague of James Tobin until moving to UCLA in 1960. Marschak’s later attempts to clarify the concept of liquidity and to emphasize the role of new information for economic behavior date back as far as to his early experiences with hyperinflationary processes in the Northern Caucasus during the Russian Revolution. Marschak came to monetary theory with his 1922 Heidelberg doctoral dissertation on the quantity theory equation of exchange (published in 1924 as “Die Verkehrsgleichung”), and embedded monetary theory in a wider theory of asset market equilibrium in studies of “Money and the Theory of Assets” (1938), “Assets, Prices, and Monetary Theory” (with Helen Makower, 1938), “Role of Liquidity under Complete and Incomplete Information” (1949), “The Rationale of the Demand for Money and of ‘Money Illusion’” (1950), and “Monnaie et liquidité dans les modèles macroéconomiques et microéconomiques” (1955), as well as in Income, Employment and the Price Level (lectures Marschak gave at Chicago, edited by Fand and Markowitz, 1951). We examine Marschak’s analysis of money within a broader theory of asset market equilibrium and explore the relation of his work to the monetary and portfolio theories of his doctoral students Markowitz and Patinkin and his colleague Tobin and to the revival of the quantity theory of money by Milton Friedman, a University of Chicago colleague unsympathetic to the methodology of the Cowles Commission

Trevor Swan And The Neoclassical Growth Model

Trevor Swan independently developed the neoclassical growth model. Swan (1956) was published ten months later than Solow (1956), but included a more complete analysis of technical progress, which Solow treated separately in Solow (1957). Reference is sometimes made to the "Solow-Swan growth model", but more commonly reference is made only to the "Solow growth model". This paper examines the history of Swan’s development of the growth model, the similarities and differences between the approaches of Swan and Solow and the reasons why Swan's contribution has been overshadowed. We draw on unpublished work to show that in 1950, Swan was working on a growth model in a verbal format. In 1956, Swan published only a simplified version of his model based on a Cobb-Douglas production function, but Swan's original model (circulated July 1956 and published posthumously in 2002) was much more general. Swan's reluctance to publish was consistent with his perhaps counterproductive modesty and perfectionism. His well known paper, "Longer run problems of the Balance of Payments" was circulated in 1955, eight years before publication in 1963. His pioneering work in 1945, developing the first macroeconomic model of the Australian economy, was published posthumously in 1989.

Body fat MRS

The increasing levels of obesity, and its associated comorbidities, have prompted a reassessment of the techniques used for assessing body fat, including content, distribution, and composition. Magnetic resonance spectroscopy (MRS) is one among the many invaluable in vivo tools available today to evaluate the role of body fat in health and disease. However, although MRS has become a powerful technique for assessing ectopic fat in vivo, it has had limited use in other areas of research associated with body fat. MRS has found some success as a fast method to determine whole body adiposity in rodent models of disease, as well as a noninvasive method of obtaining an index of the overall composition of body fat in human subjects. Its more significant use has been in the understanding of bone marrow fat content, where important advances have been made, especially in longitudinal studies. In conclusion, in the area of body fat, MRS continues to be an adjunct technique to more precise and versatile MRI methods