- Matthew N. Luzzetti and Lee E. Ohanian have a new NBER working paper on why Keynes was so successful. The abstract reads:
"This paper studies why the General Theory had so much impact on the economics profession through the 1960s, why that impact began to wane in the 1970s, and why many economic policymakers cling to many of the tenets of the General Theory. We discuss three key elements along these lines, including the fact macroeconomic time series through the 1960s seemed to conform qualitatively to patterns discussed in the General Theory, that econometric developments in the area of simultaneous equations made advanced the General Theory to a quantitative enterprise, and that the General Theory was published during the Great Depression, when there was a search for alternative frameworks for understanding economic crises."
I have a feeling the paper will take the form of a back-handed compliment of sorts. The history of simultaneous equation modeling and Keynesianism is an interesting one, though.
- Don Boudreaux, in typical form, attributes all manner of ignorance, uncertainty, and messiness of real life to Keynesianism. If I were to evaluate my own view of economics and policy and discover that I don't think about or worry about the sorts of things Don raises this might be a more damning critique. But I think about these sorts of things all the time, and there are much smarter Keynesians out there than me - if I'm thinking about these things they are too. It makes me wonder exactly where Boudreaux is coming from. "Keynesianism" for some people becomes a catch-all for everything anyone left-of-center says about economics. For others it is a catch-all for everything that any advocate of increased government spending says about economics. For Don Boudreaux it sometimes it comes across as a catch-all for everything that goes wrong, period. I don't usually like it when Brad DeLong does his "stupidest man alive" posts. I recently discussed it with him in a comment section to this blog. But sometimes, people tempt me to move a little closer to Brad (who recently did don Don with the title).
Monday, January 3, 2011
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The 1960s? Keynes' views seem to have become widespread only after he was long dead.
ReplyDeleteI find interesting the dichotomy between Keynes and Keynesianism. Keynes, a very conservative member of the British establishment, was a man popular with the new rebellious social democrats who called themselves Keynesians. The word "Keynesian" should not have any meaning, since Keynes flexibly changed his views frequently, especially on trade. And Keynes differs with Keynesians on use of math, unless I read incorrectly.