Peter Boettke has a good post on the role of Hayek in the history of macroeconomics. He defends the idea that Hayek was Keynes's major rival in the 1930s and 1940s. This is certainly true, although I'm not sure that's really in question. Keynes really had two rivals - an academic intellectual rival (Hayek and the LSE group), and a professional intellectual rival (the Treasury). He and the Cambridge group overcame both by the end of this period.
Peter also makes arguments about the continuing influence of Hayek. He clearly made a mark on Hicks. Hicks is one of those guys that both Keynesians and Hayekians like, because he was legitimately influenced by both. Lucas talked about him too. I'm not quite sure this means that Hayek had a big impact on macroeconomics after the 1940s. The argument isn't that nobody ever cited Hayek after the 1940s, after all. It's that macroeconomics would have developed in much the same way without him. He wasn't a crucial player. The other thing to remember is that you can say pretty Hayekian things without relying on Hayek. I fully embrace the issues raised by the Lucas critique. This wasn't a battle for me - I was raised on Lucas critique insights. I fully accept a lot of Hayek too because I was brought up to think about the economy as an emergent order (actually - brought up to think that through a lot that Krugman wrote). That makes Hayek an important thinker to come back to. But has he really been a major player in post-1940 macroeconomics, or have their just been a lot of important congruences? I think these are two different claims.
I'm not well enough versed in the history to provide a definitive answer, but I think we need to be careful to separate "some people continue to cite Hayek, and we can see a lot of modern ideas in Hayek too" from "Hayek was instrumental in the development of modern macroeconomics". You can pick out Lucas critique type insights in Keynes too - he talks a lot about people's response to major policy changes, and it's very easy to draw Lucas critique type insights out of that. But I would never presume to assert - from that - that Keynes was critical to the development of the Lucas critique.
Wednesday, March 7, 2012
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"You can pick out Lucas critique type insights in Keynes too - he talks a lot about people's response to major policy changes, and it's very easy to draw Lucas critique type insights out of that. But I would never presume to assert - from that - that Keynes was critical to the development of the Lucas critique."
ReplyDeleteIf I'm not wrong, you can make the argument that the Lucas critique is really a footnote to Keynes's criticisms of Jan Tinbergen's techniques in econometrics. Dr. Michael Emmett Brady has pointed to the 1939-1940 exchanges between Jan Tinbergen and John Maynard Keynes in the Economic Journal, which Hugo A. Keuzenkampf's Probability, Econometrics, and Truth makes reference to.
http://www.amazon.com/Probability-Econometrics-Truth-Methodology/dp/0521553598/
Yes - I agree very much. I almost mentioned the response to Tinbergen in this post, actually.
DeleteHe's got a great line in there about how skeptical he is of econometrics - he calls it "black magic" or something, but then says that there was no one he would trust more to use the black arts for good than Tinbergen :)
"But has he really been a major player in post-1940 macroeconomics..."
ReplyDeleteThe answer is that doesn't really matter.
Hayek walked away from that project and for a number of very sound reasons.
It would be nice if people were to deal with Hayek on his own terms in other words instead of being obsessed with whether you can shoehorn him into this or that category.
If it's not something you care about, then don't worry about it Gary.
DeleteThere are claims about his relevance to modern macro that went around the blogosphere several months ago. A lot of us are just responding to that. If you don't care, there's absolutely no obligation to get into the conversation.
I agree - there's absolutely no value to shoe-horning.
hi daniel. i´m sorry to write about this in the comments section, but i don´t see any other way to contact you.
ReplyDeletei wanted ask you for some advice on finding a book that seems to be out print and unavailable pretty much everywhere.
but i refuse to believe it is just vanished from the earth
i've noticed that your a book and history of economic thought fan, so i thought maybe you can help me out by giving me some pointers as to where i could search for the book
Author: Basil J. Moore;
Title: Horizontalists and Verticalists, The Macroeconomics of Credit Money;
Publisher: Cambridge University Press;
ISBN: 9780521350792
my email is jcesguerra@gmail.com
1. He was responding to someone who was emphatically stating Hayek was not *serious.* That was the entire point of the post. I don't know how you misread Boettke so much. Obviously, whether Hayek was a *serious* rival to Keynes is disputed - it is what Congdon was arguing. Daniel, sometimes I feel like you link to people like Boettke, first approve of the post, and then say things that can only be understood that you do not like what they said.
ReplyDelete2. Hicks is cited as he is cited because of the point in time when Hicks reflected on the 1930s debate and came to the conclusion that Hayek was right and Keynes was wrong after all.