Theoretical issues of liquidity effects: commentary

Liquidity (Economics)

Monetary and fiscal impacts on exchange rates

Foreign exchange rates ; Fiscal policy ; Monetary policy ; Budget deficits ; Dollar, American

Measuring systematic monetary policy

Monetary policy

Classical reflections on the deficit

Deficit financing ; Debt management ; Crowding out (Economics) ; Interest rates

Foundations or Bridges? A Review of J. E. King's The Microfoundations Delusion: Metaphor and Dogma in the History of Macroeconomics

A review of J.E. King's The Microfoundations Delusion: Metaphor and Dogma in the History of Macroeconomics

A review of Alan Bollard's 'A Few Hares to Chase: The Economic Life and Times of Bill Phillips'

A.W.H. Phillips is little known to the economics profession today, except at the creator of the Phillips curve. Bollard's engaging biography tells the story of a provincial New Zealander and practical engineer, who emerges as a hero in World War II, and plots a spectacular rise from 3rd class sociology degree to Tooke Professor of Economics at the LSE in just eight years. Bollard's biograph is a welcome corrective - both in demonstrating that Phillips' most important contributions to economics lay in the realms of macroeconomic dynamics and time-series econometrics and in showing how those aspects of his work must be appreciated to place the more famous Phillips curve into perspective

Microfoundational programs

The substantial questions of macroeconomics itself are very old, going back to the origins of economics itself. But professional self-consciousness of the distinction between macroeconomics and microeconomics dates only to the 1930s. The distinction was drawn quite independently of Keynes, yet Keynes's General Theory led to its widespread adoption. The question of the relationship of microeconomics to macroeconomics encapsulated in the question of whether macroeconomics requires microfoundations was not raised for the first time in the 1960s or '70s, as is sometimes thought, but goes back to the very foundations of macroeconomics. There are in fact at least three microfoundational programs: a Marshallian program with its roots directly in Keynes's own theorizing in the General Theory; a fixed-price general-equilibrium theory, which includes some work of Patinkin, Clower, and Barro and Grossman; and the more recent representative-agent microfoundations, starting with Lucas and the new classicals in the early 1970s. This paper will document the development of each of these microfoundational programs and their interrelationship, especially in relationship to the programs of general-equilibrium theory and econometrics, whose modern incarnations both date from exactly the same period in the 1930s

On the Reception of Haavelmo's Econometric Thought

Trygve Haavelmo's The Probability Approach in Econometrics (1944) has been widely regarded as the foundation document of modern econometrics. Nevertheless, its significance has been interpreted in widely different ways. Some modern economists regard it as a blueprint for a provocative, but ultimately unsuccessful, program dominated by the need for a priori theoretical identification of econometric models. They call for new techniques that better acknowledge the interrelationship of theory and data. Others credit Haavelmo with an approach that focuses on statistical adequacy rather than theoretical identification. They see many of Haavelmo's deepest insights as having been unduly neglected. The current paper uses bibliometric techniques and a close reading of econometrics articles and textbooks to trace the way in which the economics profession received, interpreted, and transmitted Haavelmo's ideas. A key irony is that the first group calls for a reform of econometric thinking that goes several steps beyond Haavelmo's initial vision; while the second group argues that essentially what the first group advocates was already in Haavelmo's Probability Approach from the beginning