Talk:History of macroeconomic thought/Archive 1

Archive 1

Archive 2

Clarifrication

This is a really tough subject for an encyclopaedia article. Can I seek your views on spending more time on defining what differentiates macroeconomics from economics and microeconomics? For some people who come here, the names Keynes and Hayek don't mean anything, and therefore they may not really understand that macroeconomics is concerned with national economies as a management exercise. I don't know how to word that concept so it doesn't sound political (political economy being a separate discussion). Is it worth pursuing this question to improve the article?

Regards Peter S Strempel | Talk 09:47, 26 March 2011 (UTC)

Someone gave the same feedback in peer review. I have tried to do a better job alluding to the differences between micro and macro here, but I don't think this is the place for a full scale discussion. It would probably be better to deal with this in the Macroeconomics article, but that's not in the best of shape right now. I'll try to add a little more to this article to make things more clear.--Bkwillwm (talk) 03:08, 27 March 2011 (UTC)

Copyedit

Made a lot of changes. Some comments:

• One paragraph contradicts itself, on the subject of whether Friedman believed that intervention can affect short-term fluctuations.
• It would be great to see some treatment of EMH.
• The article references but does not describe Irving Fisher's theory.
• Doesn't mention quantitative easing.

I may add a section on the various views on appropriate intervention targets: inflation, price level, aggregate demand, employment, interest rates, debt/deficit, stocks, and even NGDP level futures.

Lfstevens (talk) 21:35, 31 March 2011 (UTC)

I think on the Friedman thing that partly reflects the fact that Friedman's own views weren't always clearly articulated. He did argue that monetary policy affects aggregate demand and that in turn it is possible for aggregate demand to affect output in the short run. However, he also believed that expansionary monetary policy that tried to fight downturns was very likely to be mis-timed and hence counterproductive; it was sort of a "yes in theory, no in practice" kind of argument, at least that's how I've always took it. I'll try to pull the JEP DeLong source (which is what is being cited) and see if this can be clarified.

I also think that EMH is worthy of coverage here, as is CAPM - though since this is macroeconomics and not exactly finance the treatment should be brief. Maybe a word or two about the Equity Premium Puzzle as well? (Again, strictly speaking these aren't "macro" topics but usually they are covered in macro courses).

Quantitative easing is of more contemporary relevance I think, while this is a history article.Volunteer Marek (talk) 00:40, 1 April 2011 (UTC)

Lfstevens, thanks for all your work on the copy edit. Thanks for catching the contradiction in the monetarism section. I'll pull up the Delong reference too and see if I can reconcile the statements. I think VolunteerMarek is right that its a theory/practice divide. Friedman also may have shifted his views over time. As for the finance topics, I don't think they really belong here. Finance, for better or worse, has generally been treated separately from macro. Putting a little bit about EMH in the rational expectations section would probably improve the article, but I can't think of a good way to work in many other finance topics (I also considered putting something about Baumol-Tobin in the neoclassical section). Good catch on the ambiguous reference to Fisher's theory. I was referring to the quantity theory, but that needs to be clarified. I think QE is out of scope here. Its more of a policy issue than a theory one. You would also have to be careful with how policy oriented the additional section you mentioned would be. It might be better to put content like that in other articles. I considered this a sub-article for the main macroeconomics article (which I'm going to start working on). It might be better to have that kind of content there.--Bkwillwm (talk) 01:18, 1 April 2011 (UTC)

More:

• This article is quite long, so I think it's important to maintain focus. I therefore agree about leaving finance out of it.
• It's quite possible that Friedman contradicted himself or that his thinking evolved. If so, we should present it that way.
• How about renaming this article to "History of macroeconomics"?
• Any comments about adding a section on targets?

Thanks for the feedback. Lfstevens (talk) 17:08, 4 April 2011 (UTC)

I chose to call the article "History of macroeconomic thought" instead of "history of macroeconomics" because the article focuses on theory instead of general macroeconomics. Certain topics would be in scope for a general article but not a theory one. A general article could potentially include more on empirical methods, like VARs and early models of business cycles, and macroeconomic policies. Obviously the lines are blurry. Important parts of economic theory are tied to empirics, like the theoretical Lucas critique stemming from very empirical macromodels, and certain theories are also oriented around policy, like monetarism. However, I think nominally limiting this article to theory helps keep some focus. I called the article "History of macroeconomic thought" instead of "theory" following the convention in History of economic thought.

Also, I'm skeptical of adding a "targets" section. I see the value in it, but the article is already long, and I'm not sure how such a section would into this article's chronologically linear form.--Bkwillwm (talk) 17:21, 23 April 2011 (UTC)

There isn't really a contradiction in the monetarism section. Freedom did attribute the Depression to monetary factors and poor monetary policy, but he was also against the use of monetary policy to fine tune economic output. This isn't a contradiction: Its a question of the ;ength and depth of a down turn. I reworded the section slightly to clarify.--Bkwillwm (talk) 04:50, 10 May 2011 (UTC)

Disequilibrium (economics)

I have a concern that this article neglects work from outside the U.S. and the U.K., particularly the disequilibrium economics of Malinvaud and Drèze

J. H. Drèze

Drèze's work was commended by Frank Hahn's collections of essays in the 1980s, which gave very high praise indeed. The Drèze-Sneessens model appears as an appendix in Richard Layard, Bean, and coauthor's book Unemployment; Layard's regarded as one of the economic advisors of New Labour, which did succeed in reducing immigrant youth unemployment in half. Finally note that Drèze was the first President of the European Economic Association, and a former President of the Econometric Society.

• 4. Europe's Unemployment Problem (Ed.), MIT Press, Cambridge (Mass.), 1990. (With C. Bean, J.P. Lambert, F. Mehta and H. Sneessens, Eds)
  • Papers prepared under the European Unemployment Program, a 10-country research initiative supervised by Richard Layard and Drèze in 1986-88. The country papers adopted a common econometric framework inspired by work on Belgium by Drèze and Henri Sneesens (see article [71]). Includes a 65-page synthesis by Charles Bean and Drèze.

• 5. Underemployment Equilibria: Essays in Theory, Econometrics and Policy, Cambridge University Press, Cambridge, 1991.
  • Eighteen reprinted papers, organised under 8 headings: overview, equilibria with price rigidities, efficiency of constrained equilibria, public goods and the public sector, price adjustments, wage policies, econometrics, and policy.

• 6. Money and Uncertainty: Inflation, Interest, Indexation, Edizioni Dell' Elefante, Roma, 1992.
  • An extended version of the 1992 Paolo Baffi Lecture at Banca d'Italia, dealing successively with a positive theory of positive inflation, with interest rates policies and with wage indexation.

• 7. Pour l'emploi, la croissance et l'Europe, De Boeck Université, 1995.
  • Ten papers (some initially written in French, some translated from English) dealing successively with growth and employment, technical progress and low-skilled employment, European macroeconomic policies, work sharing, Europe's capital city and a status for regions within a Europe of nations. Most papers are based on lectures addressed to non-specialist audiences.

Malinvaud

Similar disequilibrium economics has been championed by Edmond Malinvaud, who may even be more renowned than Drèze. Certainly, they have been at the very top of the economics profession for 40 years.

• "Theory of Unemployment Reconsidered", 1977.
• "Une Nouvelle formulation générale pour l'étude de certains fondements microéconomiques de la macroéconomie", with Y.Younes, 1977, Cahiers du séminaire d'économétrie.
• "Some New Concepts for the Microeconomic Foundations of Macroeconomics" with Y.Younes, 1977, in Harcourt, editor, Microeconomic Foundations of Macroeconomics.
• "Macroeconomic Rationing of Employment", 1980, in Malinvaud and Fitoussi, editors, Unemployment in Western Countries.
• "Profitability and Unemployment", 1980.
• "Théorie macroéconomique", 2 volumes, 1981-2.
• "Essais sur la théorie du chômage", 1983
• "Mass Unemployment", 1984
• "Reflecting on the Theory of Capital and Growth", 1986, Oxford EP
• "The Challenge of Macroeconomic Understanding", 1987, BNLQR.
• "Voies de la recherche macroéconomique", 1991
• "Équilibre général dans les économies de marché", 1993.

I added mentions of Malinvaud and Dreze to the disequilibrium part of the article and separated the disequilibrium discussion out into its own section. I wasn't completely sure how to work them in. Snowdon and Vane only mention them briefly, but S&V also list them also tie Malinvaud and Layard to the "European New Keynesians." Without knowing more about their work and its influence, I think adding Malinvaud and Dreze as part of the disequilibrium section is the way to go. I'd like the disequilibrium section to be better, but it's not my strongest area.

I think you have a point about Malinvaud and Dreze, but I anticipated that this article might be criticized as Anglocentric so I'll give you my planned response. I think it's more international than it appears. Many of the economists cited and discussed are from outside the Anglo-sphere: Blanchard (French), Gali (Spanish), Smets (Belgian), Woulters (Belgian too?), Modigliani (Italian), Finn Kydland (Norwegian) and Fisher (Israeli). True, most of these have close US ties, but most macroeconomic work to date has been done in English leading many economists to use the US and UK as a base. Nobel prizes for macroeconomic related topics have generally (probably exclusively) gone to people with American and British ties. I'm sure there is other work deserving of attention (probably Malinvaud and Dreze), but its difficult to give much weight to topics and people that don't get much attention in macroeconomic surveys, textbooks, and Nobel awards. If its clear that ignorance of the topic is really just Anglophone bias, than we should fix it, but it can be hard to get sources that establish this (at least for my English-speaking self).--Bkwillwm (talk) 05:49, 26 April 2011 (UTC)

Thanks for your work, here and at the Malinvaud article, for example. I am sorry to sound harsh (for the FAC review), especially after not having helped here lately.  Kiefer.Wolfowitz 19:27, 8 June 2011 (UTC)

For sources, look at the reviews in JEL and JEP and at the latest New Palgrave (and the earlier ed., but discount the undue weight given to weirdos in the first ed.). I would guess that the ~Handbooks of Economics are probably the best overviews of the discipline.  Kiefer.Wolfowitz 19:29, 8 June 2011 (UTC)

English sources on disequilibrium economics =

Try Frank Hahn's collections of papers from the 1980s. Try Tour by Malinvaud, which was wildly cited. Try the textbook on unemployment by Layard, Nickel and Bean.

Malinvaud and Drèze were presidents of the Econometric Society as relatively young men. It is hard to think of anybody as renowned in economics, apart from Ken Arrow.

The presidency of the Econometric Society is a much better guide to leadership in economics than is the Nobel Prize, which has too much to do with ascending leaders in Swedish economics strengthening their institutional basis. The Nobel prize is given by Swedish economists, who are notoriously incompetent, conformist, and timid about economic theory and econometrics. Look at the review of Swedish Economics published c. 1991.

You should also consider the Fitoussi-edited policy proposal on 2-handed economic growth for Europe, which was signed by leading economists in Europe and the USA (e.g. Modigliani).  Kiefer.Wolfowitz 17:45, 8 June 2011 (UTC)

Undue weight

Your article has one sentence on disequilibrium economics (actually based on GE theory), and two sections on weirdo economics, so called Austrian and so called Neo-Keynesian. This is undue weight.  Kiefer.Wolfowitz 17:47, 8 June 2011 (UTC)

So what exactly do you want changed? Other editors seem to be OK with the amount of weight given to Post Keynesian and Austrian economics. Do you want disequilibrium economics to have it's own section or do you want it expanded in its current location?--Bkwillwm (talk) 18:51, 11 June 2011 (UTC)

Expansion, imperfect

I imported and tried to fix text from the Jacques Drèze article, which mostly adapts an article by Pierre Dehez. I am sorry for its lack of page references, uneven and duplicate referencing, but I am trying in good faith to provide references to European policy discussions tied to disequilibrium models.

I regret that this week I shall be otherwise occupied and unable to aid much.  Kiefer.Wolfowitz 21:14, 12 June 2011 (UTC)

Gordon on MIT bias

Gordon notes that 6 leading textbooks all were written by teams at least one author was from MIT, where they learned the Samuelson Solow modeling. Gordon's observation suggests why it is so difficult to avoid undue weight on US/MIT (Chicago?) traditions.  Kiefer.Wolfowitz 21:14, 12 June 2011 (UTC)

Gordon's observation was made first by Mankiw, page 43, as Gordon credited on pages 22--23.  Kiefer.Wolfowitz 09:53, 20 June 2011 (UTC)

Heterodox economics

This stuff comes at the end (good). It would be useful to state how marginal this stuff is, and how little presence it has in leading (AEA or Econometric Society or JPE) debates.  Kiefer.Wolfowitz  (Discussion) 23:57, 17 April 2011 (UTC)

Harvard citation and ELs

I noticed all the citations in the Ref section followed the harvad style, but the inline citations in the Notes section did not use the corresponding templates. So if nobody opposes, I can try to convert all the plain refs to the {{sfn}} fmt. Also, the EL section could be an easy target for {{too many links}}. Hopefully I can get the ref fmt done by tomorrow, and review it for FAC this weekend. Great article, BTW. Cheers. --Artoasis (talk) 05:44, 1 June 2011 (UTC)

Lead photo

The lead photo strikes me as wrong. Off the top of my head, the list of poeple I would consider to have been important to the development of macroeconomics are:

• John Maynard Keynes
• John Hicks
• Paul Samuelson
• Milton Friedman
• Robert Lucas

We should probably also have a new Keynesian in there, Paul Romer perhaps. Thoughts? LK (talk) 08:12, 8 June 2011 (UTC)

Paul Romer is not a New Keynesian-- he's a new growth theorist. You probably mean David Romer. Better candidates for a New Keynesian photo would be John Taylor or Michael Woodford. Rinconsoleao (talk) 15:14, 16 June 2011 (UTC)

I selected economists who had free images. This meant some important ones aren't part of the composite image. I especially wanted to include Bob Lucas, but I couldn't find any free images. The composite does include people from each of the major schools though. Stanley Fischer is the new Keynesian. Paul Romer does have an image on his page, but I'm not sure the photo is an actual free image. Samuelson had a free image, but I chose Modigliani as the neo-Keynesian. Modigliani made a fair number of contributions himself.--Bkwillwm (talk) 13:13, 8 June 2011 (UTC)

Ah, yes, I just noticed you have Stanley Fischer. Good choice. Rinconsoleao (talk) 15:14, 16 June 2011 (UTC)

"Wrong" is too kind. "Ridiculous, antiquated, and wrong" would be more accurate. Where are the editors of the handbooks of economics volumes? Instead we get too many heroes of weirdo economics.

I agree and applaud the nominations above, who do seem to tower above everybody else. Further suggestions might include the second-tier:

• Franco Modigliani
• Robert Solow
• Frank Hahn
• Edmond Malinvaud
• Jacques Drèze
• Michael Woodford

Thanks,  Kiefer.Wolfowitz 18:53, 8 June 2011 (UTC)

This photo of Solow appears to be a free image.Volunteer Marek (talk) 19:01, 8 June 2011 (UTC)

FAC criticisms

I wrote this at the economics project.

It seems good at the beginning. There are a few aspects that seem troublesome to me.

• Later sections make many statements that "somebody showed x", which seems vague to me. Also, as a statistician and econometrician, I am troubled by the finality of such "showed" statements. The model assumptions used in tests of theories are believed by nobody, so the tests have only heuristic value. (See Summers in ~Scandinavian Journal of Economics on the irrelevance of much of econometrics to macroeconomic theory).
• There are statements that DSGE models are based on Arrow-Debreu theory, which seem like salesmanship to me, although this claim is often repeated. To be computable, these models make very strong assumptions (forms of supply and demand) which are far from the topological and convex-set generality from Arrow-Debreu. (My friends who work with DSGE models think that they work better than their predecessors, both for providing insight/policy evaluation and for predictive ability. They seem to be closer to mathematical economics than earlier models, but we should avoid euphoria.)
• About the so-called "microfoundations" of new classical models, this is not even a bad joke. Frank Hahn has spent decades demolishing such claims. There should be some discussion of Hahn & Solow's critical book from the 1990s.

I rewrote a few such claims, to be closer to reality. Hahn ridiculed such claims, and he was the world's leading researcher in monetary economics and GE theory for decades.  Kiefer.Wolfowitz 19:18, 8 June 2011 (UTC)

• There is undue weight about the "Austrian school" and "Neo-Keynesian" economics, which are labeled fringe economics by e.g. Solow.
• There is only a short mention (19:18, 8 June 2011 (UTC)) no mention of disequilibrium general equilibrium theories, e.g. of Edmond Malinvaud and Jacques Drèze, which have been endorsed as interesting and policy-relevant by e.g. Hahn, and by Layard, Nickel and Bean (the latter includes a disequilibrium model in their book on Unemployment). These guys have been leaders in mathematical and macroeconomic debates in Europe for decades, and it is weird for the Macro article to be as USA/British centric as even our statistics articles!

Those are my thoughts. Good luck!  Kiefer.Wolfowitz 17:35, 8 June 2011 (UTC)

I'd add Don Patinkin to the list of disequilibrium theorists worthy of mention in the article.

I'm not so sure if the Austrian and "Post-Keynesian" (I think that's the one you meant) are really given undue weight. They're mentioned towards the end, with each getting one longish paragraph or so. Maybe a little.Volunteer Marek (talk) 19:03, 8 June 2011 (UTC)

Patinkin deserves more mention, also.

They get long paragraphs, but they are isolated groups of weirdos essentially divorced from empirical scientific standards and from mathematics. Do they have any ability to predict anything, or do they just say, "we can do better" and are given a free ride?

I see that Solow's 2010 statement is used, but he wrote longer and more professional criticisms (with Hahn) that are reliable references.  Kiefer.Wolfowitz 19:15, 8 June 2011 (UTC)

Oops, I see Patinkin's already in there, somehow I missed it on a quick (re)reading of the article.Volunteer Marek (talk) 19:17, 8 June 2011 (UTC)

I think there are three arguments for keeping these two schools in there. 1) They may be isolated groups of weirdos now but they are historically important, at least as far as the Austrians go. If you throw Joan Robinson and Sraffa in with the Post-Keynesians, then that goes for them too. 2) From what I know both groups do have an active (if, from an outside view, somewhat of a "let's beat the dead horse some more") research program. 3) I'd readily agree that this kind of info would be undue in an article on economic theory or economics in general, but this is an article on History of thought, which tends to be a bit more "heterodox" as a sub-discipline than other sub-disciplines within economics. Fringe views generally should get a bit more coverage in discussions of "history" of something than in a discussion of present state of something.Volunteer Marek (talk) 19:31, 8 June 2011 (UTC)

You may be again correct, even here I fear!  Kiefer.Wolfowitz 19:37, 8 June 2011 (UTC)

Evidence, time series: Also, Keynes v. new-classical smallfry

This article should include a graph of GDP in the 20th Century. The dampening of business cycles through the 1970s seems to have been one of the best accomplishments of our species, at least on utilitarian terms.

Solow/Hahn have a good discussion of the purpose and achievements of Keynes and mainstream economics, which was able to provide insight into the great depression and guide policy for decades.

• Critical Essay on Modern Macroeconomic Theory (1995) Robert M. Solow and Frank Hahn.

There is far too little discussion of evidence.  Kiefer.Wolfowitz 19:25, 8 June 2011 (UTC)

Christina Romer (and possibly follow up research) might be worth mentioning in this context. Also, I think what you mean is "graph of GDP in the 20th Century for United States", or another developed country, since I think the dampening of the business cycle is associated with those economies. Don't think that the same thing is true for developing countries (maybe some Asian ones) and the business cycle, as that term is used in macro-literature on the topic, is probably of secondary concern in those parts of the world.

It's an excellent point about evidence though. For the growth stuff, maybe add a "presence of conditional convergence vs. absence of absolute convergence" kind of graph.Volunteer Marek (talk) 19:31, 8 June 2011 (UTC)

You are correct, sir. Maybe a graph of the biggest Keynesian-enlightened countries could be found. (Doesn't a discussion of conditional convergence and absolute convergence belong in a discussion of Banach spaces and summability theory?)  Kiefer.Wolfowitz 19:36, 8 June 2011 (UTC)

Yeah, that's why I didn't wlink those two ;) Hmmm, maybe there should be an article on Conditional convergence (economics) here, though right now it's in Convergence (economics).

If we were to present a graph of, say, US, GDP over time, it would probably be a good idea to present the actual path, as well as the de-trended fluctuations. Otherwise, if you just eyeball the graph all you see is the Depression and the "dampening" (if it's there) might not be visible. Of course that raises the question of what's the best way to de-trend these data. I could do a few graphs like that but I'm a little wary off straying too far into OR territory. What's the title of the Solow/Hahn paper and do they discuss this there?

• Critical Essay on Modern Macroeconomic Theory (1995) Robert M. Solow and Frank Hahn. (MIT Press, I believe)

Obviously sources for the use of something like the Hodrick-Prescott filter can be easily found which would justify that approach and make it less OR.Volunteer Marek (talk) 19:45, 8 June 2011 (UTC)

DSGE

The collection of external lectures is excellent. The (always thoughtful and intelligent and often provocative) econometrician Chris Sims has an interesting discussion of DSGE models. I assume that Ed Leamer also makes a great contribution. We should look for references from these giants.  Kiefer.Wolfowitz 22:58, 8 June 2011 (UTC)

Agency based models: Panacea

There is too much prominence given to this fad/breakthrough. There are plenty of Marxist theories predicting constant crises and breakdowns of the economy, e.g. 80s models using catastrophe theory, etc. Stating that ABMs "can" predict something is weak praise; so can Karl Marx or Rosa Luxemburg. The question is whether they have predicted anything.

Unless these ABM models have been acclaimed in JEP, JEL, Handbooks of Economics, we have another case of undue weight.

FYI-- the Handbook where they are acclaimed is the Handbook of Computational Economics. Unsurprisingly, the relevant volume is the one edited by Leigh Tesfatsion (that's volume 2). Rinconsoleao (talk) 14:30, 7 July 2011 (UTC)

Keynes and mainstream Keynesian economists wrote about problems with financial instability, bubbles, recessions, and worse, having lived during the Great Depression. They also criticized the DSGE true-believers as smoking bargain-basement crack long ago, although they used more elegant wording.  Kiefer.Wolfowitz 19:51, 8 June 2011 (UTC)

Here I agree. The closest I could find to a mention of ABMs in the above (granted, through a very quick search) is this passing and minor mention on the AEA website [1]. I'm also unaware of any major breakthroughs or significant results that have come out of this program.Volunteer Marek (talk) 19:56, 8 June 2011 (UTC)

I don't mind cutting most of the ABM section. There hasn't been any groundbreaking work on the front, but The Economist and Nature articles discussed ABMs as potential future paths of research. I object to these being labeled as unreliable sources though. They my have more of a general audience than peer-reviewed journals, but Nature has very high standards and The Economist tends to fairly conservative. I think there should be some mention of ABMs as a potential avenue for future research, but I recognize that they get a lot of treatment given the fact there's little there at the moment.--Bkwillwm (talk) 00:50, 9 June 2011 (UTC)

(I thought that I had replied earlier.) These are nice papers, but they are not in the leading high quality most reliable economics journals, textbooks, handbooks, references. Please spin off this section as a self-standing article.  Kiefer.Wolfowitz 00:25, 12 June 2011 (UTC)

OK. I'll cut the section, but please refrain from using the "unreliable source" tag on reliable sources. Yes, top economics journals are more relevant, but Nature is peer-reviewed and very reputable. Contending that it's an unreliable source is ridiculous. I'll buy the argument that including ABM gives it undue weight given the speculative nature of the references and the lack of research published in major journals. I thought it would be good though to end the article with a possible future avenue for research, but I know that may be pushing things a little too far.--Bkwillwm (talk) 12:55, 12 June 2011 (UTC)

Thanks for removing the section. (I record my caveat to your statement: Nature's economics expertise doesn't seem to have much of an advantage over Science's political expertise, e.g. endorsing Obama: Until these ABM methods are acclaimed in leading economics journals or textbooks or research monographs, they don't meet the criteria for inclusion as HQMR sources.)

You quoted a statement (from Gordon?) that more research on disquilibria is needed, and you expanded the section on Malinvaud/Drèze and created a great Malinvaud-style graphic. You have stated a just, intelligent, and mainstream view about future research.  Kiefer.Wolfowitz 19:46, 12 June 2011 (UTC)

Overlapping generations model

Invented by Paul Samuelson, overlapping generations models seems to to have been an important topic in macroeconomic theory. It is chapter 2 of David Romer's book on Advanced Macroeconomics, 3rd. edition. It is the final chapter in Aliprantis, Burkinshaw, and Brown's book on Competitive Equilibria, for example.  Kiefer.Wolfowitz 14:55, 9 June 2011 (UTC)

• Aliprantis, Charalambos D.; Brown, Donald J.; Burkinshaw, Owen (1988). "5 The overlapping generations model (pp. 229–271)". Existence and optimality of competitive equilibria (1990 student ed.). Berlin: Springer-Verlag. pp. xii+284. ISBN 3-540-52866-0. MR 1075992. {{cite book}}: Unknown parameter |month= ignored (help)

Aside from theoretical interest, the practical application of these models to question of Social Security and pensions could be mentioned (along with Diamond).Volunteer Marek (talk) 17:06, 9 June 2011 (UTC)

Wrong lead: Oppose using "general equilibrium theory" and instead use disequilibrium models?

The lead is just wrong.

The development of disequilibrium theory was done by mathematical economists specializing in general equilibrium theory, and was cheered on by Hahn, for example.

I view this distorted history as another symptom of the WP WikiProject Economics over-emphasizing ideologies and schools, particularly with the sectarian infobox requiring "school" and "opposed" declarations.  Kiefer.Wolfowitz 18:23, 9 June 2011 (UTC)

Now at the University of Chicago, mainstream labor economist Harvey S. Rosen concluded that disequilibrium models were more apparently more effective in modeling the U.S. labor market, particularly during the Depression.

Do you have a source for that? When's it from and what's your point?--Bkwillwm (talk) 18:04, 11 June 2011 (UTC)

Rosen/Quandt p. 92. They mention the ability to accomodate unemployment on page 4.

How do you pigeonhole Assar Lindbeck? The article declares that insider-outsider models are Neo-Keynesian. At times, The WikiProject Economics project reminds me too much of Trotskyism---obsessed with purity and factionalia.  Kiefer.Wolfowitz 14:26, 10 June 2011 (UTC)

Why does Lindbeck need to be pigeonholed and what does that have to do with the lead? And why do you care about WikiProject of Economics? It's not very active with it. I follow and post on the talk page, but I haven't taken part in any collaborations. There are no cabalistic conspiracies to break things down by school of thought. That approach, especially for articles like this one, is pretty conventional. Any "History of Thought" work I've seen has done this breakdown. Yes, some economists don't fall into classifications nicely. What exactly is your point here? Also, Insider-Outsider falls under New Keynesianism, not Neo-Keynesianism. They are different.--Bkwillwm (talk) 18:04, 11 June 2011 (UTC)

There is too much emphasis on "schools of thought", here and conventionally.  Kiefer.Wolfowitz 18:41, 11 June 2011 (UTC)

Monetary Theory: Gale, Starr

I think that the Cambridge textbooks by Douglas Gale on Money: Equilibrium and Money: Disequilibrium were good mainstream and sophisticated guides to monetary theory.

I think that Ross M. Starr and others have written valuable (i.e., general equilibrium!) approaches to monetary theory. (I am skeptical about many of the claims that others are based on GE theory.)  Kiefer.Wolfowitz 21:17, 12 June 2011 (UTC)

Withdraw FAC?

I'm trying to follow the recent discussions on this talk page and the FAC page. While I'm not sufficiently literate to take either point of view, I see that some of my more general questions seem to resound with more informed editors, and other fundamental questions concerning the global shape of the article need to be sorted as well. In response to this criticism, the article is currently undergoing changes that I consider beyond the usual FAC ping-pong. From a practical point of view, I'm concerned that my earlier review of parts of the article will not reflect the current state of the article, and also I'm wondering whether I should continue reviewing the sections I did not read yet.

In the kindest way possible and in all courtesy to Bkwillwm, who single-handedly drives this FAC, I therefore informally suggest to withdraw the current FAC nomination. I'm not putting this suggestion to the FAC page in order to underline that this is merely an informal suggestion, though. Jakob.scholbach (talk) 22:04, 12 June 2011 (UTC)

Not yet. I think there's some things which can be improved but overall this is a very excellent article, well deserving of FA status (I think part of the situation here is that we're holding it up to a standard actually higher than your typical FA, at least in terms of content). Give it a bit more time to work things out.Volunteer Marek (talk) 22:35, 12 June 2011 (UTC)

I agree. There is good will and a lot of progress this week but much remains to be done.

I added a lot of material, which is somewhat loosely referenced and looking like OR, and I have warned that I shall not help much this week. (I had good reasons, but this may disrupt the hopes of FA status now.)

1. I think that the article needs sections discussing Samuelson/Solow's contributions, because Gordon states the last 2 generations' (3 each) leading grad-macro textbooks were based on their ideas. We've mentioned overlapping generations before.
2. There is a neglect of mathematics and statistics. Mathematics: The use of deterministic differential equations, then variational calculus, then control theory, then stochastic control theory has been important.

It seems to me that the teaching M.A. students how how to solve a few problems in control theory/dynamic programming crowds out a lot of other topics in their mathematical training, e.g., mathematics mathematics used in general equilibrium theory. I suspect that the use of dynamic programming in both USA micro and macro goes a long way to explaining the popularity of dynamic programming methods by non mathematical economists. How many macroeconomists can read and understand the literature on general equilibrium with rationing literature?

Statistics: Chris Sims's promotion of VAR modeling seems to have been widely influential, and part of a distrust of fancy complicated models and of the divorce between theory and evidence that plagues macroeconomics more than e.g. farm and labor economics.

1. Mathematical economics/Microeconomics: More and more, macro is giving way to micro. Labor economists are mostly micro oriented now. General equilibrium theory has more and more influence on macro. There should be discussion of multiplicity of equilibria, e.g. Woodford and Guesnerie on sunspot equilibria.
2. There needs to be some discussion of evidence with the fringe economists---surely somebody has tried to estimate and test their models against others---I even found some papers on Goodwin's growth model, which is even more marginal!There should be more discussion of evidence throughout.
3. Policy. Different models have different purposes. The DSGE are really good for short term policy-making by central banks. Of course, they don't cover everything. Different models have different purposes. The Keynesian and disequilibrium traditions seem to better for understanding unemployment. (This point is made on page 11 of Backhouse.)
4. This is an important article. It could be improved by summoning other economics heroes to help.

 Kiefer.Wolfowitz 03:29, 13 June 2011 (UTC)

Reply by nominator

I was thinking of pulling the nomination. First of all, this article was basically in the fine-tuning stage before weighting issues etc. became serious. Many of KW's edits seem to include breaks with convention ("new-classical" vs "new classical"), different reference styles, incomplete references, cutting text but not references (Quiggin), and laundry list citations. These were the type of things we were getting cut out. Now there are a lot more to deal with (I'm not pointing fingers. I introduced my share of these issues, but now we're back to the cleanup/ce stage). Any edits have to strive for FA quality if its worth keeping this article in FAC. It seems like there's the potential this could still make it, but I think we need a quick path to consensus on a few issues:

Scope: Sources and evaluation

1. Scope. I tried to pattern the content in the article after other history of macroeconomic thought works: Namely, Snowdon and Vane, Tsoulfidis, and Hoover in A Companion to... and survey works by Blanchard, Mankiw (1990 and 2006), and Woodford plus some textbook guidance. I tried to limit my personal editorial authority and works from these sources.

These sources focus on theory over empirical methods. This article should and does mirror the amount of attention on sources give to empirical methods. I was planning on adding more on DSGE models and calibration vs. estimation methods and working in a bit about VARs, but I generally see in depth empirical issues as on the outskirts of the scope of this subject area and I think I'm supported by the sources. If somebody else finds HET sources with in depth empirical discussion, then that's another issue. If empirical techniques mesh well with the theory discussion (as they could with estimating DSGEs and may with Neo-Keynesian synthesis), then they could also be added. Generally though, I think much of what's mentioned should go into another article. There's articles in need of more/better content at Macroeconomics and Macroeconomic model, and Macroeconometrics could be created.

You discuss scope, sources and empirical evidence. I'll respond to the third item here, and to scope and sources below.  Kiefer.Wolfowitz 13:30, 17 June 2011 (UTC)

Policy and evidence: Nobody is asking for "in-depth empirical discussion", but you have less empirics than Romer, for example. The existing article ignores empirical evaluation of the fringe economics ("Austrian", "Post Keynesian") that receive undue weight at the end of the article, and such fringe economics is ignored by the most reliable high quality sources. The existing article systematically downplay empirical evaluation throughout the article.  Kiefer.Wolfowitz 13:30, 17 June 2011 (UTC)

Agreeably, I would applaud an addition of a short discussion of DSGE econometrics (policy evaluaiton), as you suggest.  Kiefer.Wolfowitz 13:30, 17 June 2011 (UTC)

Romer was writing a textbook, not a history, so, yes, there is less empirics. I never refused the addition of empirical work related to the heterodox schools. I am mainly doubtful that this can be done without original research. I don't think there's much out there, and anything that's there doesn't appear noteworthy. So far I've only found pro-heterodox research by heterodox economists.

Romer does discuss history and his book has a rather historical arrangement, first discussing IS-LM and than Solow style growth models, if my memory be correct.

We have consensus that the weirdo economics is so marginal that only members of the cults sometimes write marginal articles to assess empirical adequacy. You want to feature the weirdo stuff in this article, and previously you did so at greater length (10-20x, I'd guess) than disequilibrium economics.  Kiefer.Wolfowitz 12:55, 19 June 2011 (UTC)

Maybe in an old version of Romer. In the 2005 edition, he starts with growth and IS/LM is buried in the middle. He still does usually do a nice job of covering the background lit for relevant topics, but the overall presentation is not historical. There's also almost nothing about disequilibrium models. There's one mention in a footnote, and even then it's pretty much tangential. If we were using Romer as a primary source for weighting, disequilibrium wouldn't make it at all. I did find a history of economic thought source that had a substantial amount on disequilibrium, so I thought it was worth expanding that section.--Bkwillwm (talk) 00:47, 21 June 2011 (UTC)

Sources: Method and specifics

Sources: Please stop pretending that I am pushing my personal editorial authority and that you are being objective, when we both are responsible for the sources we choose. Neither of us is doing original research, and both of us can claim to be using reliable high-quality sources. You are choosing sources written by "historians" of "economic thought" where I am choosing work by world-leading economists, who discuss the history of their discipline.  Kiefer.Wolfowitz 13:30, 17 June 2011 (UTC)

I don't think using historians of economic thought as the primary source of for a history of economic thought is audacious. You haven't objective basis for weight in this article. You haven't shown a secondary resource that establishes Hahn and Solow (1995) as a significant resource. You keep claiming you're using "world-leading economists" as your sources, but your use of the term is very questionable. Taking a look at the IDEAs citation rankings shows that Hahn is ranked 996th. I don't think is academic stature is enough to warrant including his view points alone especially as foil to Lucas (5) and Prescott (11). That's not to say his views aren't significant, but you should really have a third party source that says his critiques are noteworthy. Given a good source for including Hahn, my issue is with the structure. Right now there's bunch of spots where you just tacked on ", Hahn and Solow disagree." That doesn't tell the reader anything, and it opens the door to others to tack on "Hazlitt disagrees," "Lucas disagrees," "Hayek disagrees" on every statement in the article.--Bkwillwm (talk) 02:12, 18 June 2011 (UTC)

It's difficult to proceed when you waste my time with such silliness. Arrow picked Hahn to coauthor his book on GE theory, and Solow picked Hahn to coauthor his book critiquing over-excited "equilibrium" economics. (His prominence in the Handbooks of Economics is a third reason for valuing his judgment.) Show me an economist who favors the IDEAs citation over the judgment of Arrow and Solow and I'll show you a fool.  Kiefer.Wolfowitz 13:02, 19 June 2011 (UTC)

The most reliable sources are the Handbooks of Economics, New Palgrave, Econometric Society monographs (and presidential addresses), etc. The collection of lectures at the bottom of the page is more representative and reliable than the sources you favor. (That collection is one of the many great strengths of your article.) The libertarian on-line economics encyclopedia and Mankiw obviously are associated with libertarian/conservative/liberal economics/policies, of course, and so it would be worth replacing those citations with more neutral sources.

Backhouse (a paper mentioned below) mentions books by Gale, Mehrling (article), and also Phelps on macro theory/history. I have commended Gale and Mehrling to you before. These should be reliable high quality sources.

Woodford's book would be a high quality most reliable source. I would guess that Guesnerie's books should be excellent in every way.  Kiefer.Wolfowitz 13:30, 17 June 2011 (UTC)

Buy me a subscription for New Palgrave and I'll use it. That aside, it makes more sense to use HET resources in a history of economic thought article. Using a the handbook makes no sense. They're designed to represent the current state of the field, not the history. I looked through the Handbook of Macroeconomics, and there was nothing on disequilibrium. Should we cut that out? Have you looked at the Concise Encyclopedia articles? The organization is libertarian, but the authors are all respected and from across the ideological spectrum. Blinder wrote the Keynes article and Christina Romer wrote the article on business cycles. They're hardly libertarian ideologues. Mankiw is also highly respected (21st in citations), and his economic work is solid despite his politics. The articles cited here (like most of his published work) aren't politically ideological. His economic ideology is Keynesian, so I don't know what your problem is here. Censoring sources based on political affiliation isn't a good way to maintain NPOV.--Bkwillwm (talk) 02:12, 18 June 2011 (UTC)

There is plenty on disequilibrium and Hahn and rationing etc. in the first 4 volumes of the Handbooks of Economics, namely the Handbooks of Mathematical Economics: Hahn wrote the chapter on stability.

Hahn and Benjamin Friedman edited the Handbook of Monetary Economics. In Volume One, see Starr et alia and Duffie on GE theory and money. See Hahn on liquidity in chapter 3. See Benassy's chapter 4 on disequilibrium macroeconomics. See Solow on growth models (a repeated recommendation). See Brock on overlapping generations models (another repeated recomendation).

We have a disagreement about the reliability and quality of the Handbooks regarding history. Each of the chapters discusses the history of its topic. You prefer the "histories" written by persons who seem not to have made contributions to economics theory (or econometric practice) and who specialize in journalistic articles having negligible influence on economics research. I prefer the Handbooks of Econonomics, which are written by leading researchers.

Agreeing with your assessment of the Concise Enclyclopedia, I still maintain that WP readers and WP would better be served by highest quality most reliable sources without ideological sponsorship, if one be available. I did not say that switching sources was a high priority. You have no cause for suggesting that I want censorship: Please strike that suggestion.  Kiefer.Wolfowitz 12:48, 19 June 2011 (UTC)

Once again, the most relevant handbook has nothing on disequilibrium economics. There's one chapter in one of the 1990 volumes on monetary economics. There's nothing in the newer volume. There's also almost nothing on Keynes's General Theory, which goes to my point: I don't have anything against the handbooks in terms of reliability or quality, they simply are not intended for or appropriate for use in a history because their expressed purpose is to document the current state of the field.--Bkwillwm (talk) 00:41, 21 June 2011 (UTC)

Lucas and general equilibria: Hahn and Solow?

1. Weighting. I think we need justification for every economists we include. Space matters. Why is the disequilibrium work by Quandt, Roberts, and Fisher notable? There work isn't mentioned in any of the secondary sources. Was their work particularly influential in the disequilibrium community? What makes Hahn's (and Solow's) criticism of RBC models notable? Every work here has been criticized, why include Hahn's criticism of RBC generally?

I shall answer directly and honestly.

Gordon states that all of the last 6 great graduate macro books was written by a student of Solow (and perhaps another author.)

Quandt, Roberts, and Fisher have been leading economists for decades. Fisher's book is published as an Econometric Society Monograph. Hahn, as I have written before, has been the leading GE theorist of money (and more recent economists include Starr and Gale). I have discussed Hahn's notability many times. He is e.g. an editor of the Handbook of economics dealing with money.

If Hahn and Solow's eminence were known to you, would you phrase your point in a more direct way? If so, I am sorry for my misunderstanding a point you want to make politely rather than directly .  Kiefer.Wolfowitz 13:30, 17 June 2011 (UTC)

1. Line item criticism. Also stemmming from Hahn and Solow, I tried to avoid line item criticism. Like I said, almost every work here is contentious and has been criticized. If every statement of Keynes's was followed by Hazlitt's criticism. Generally, I have tried to keep criticism minimal. For example, I omitted Kahn's criticism of Malinvaud. I only included criticisms when they were very notable or clear cut. For example, its fair to say money surprise failed because Lucas was the force behind those models and he says they failed.

It is clear that you value Lucas's authority over Hahn's, particularly in repeating Lucas's claims that his model was based on GE theory. Please examine a book on GE theory and see whether Lucas has any citations. I assure you that Hahn does.

I don't value one's authority over another, but it's clear from every objective measure I've seen that Lucas has been more influential. You seem to focus on who was president of the Econometric Society. Both Lucas and Hahn have been, but Lucas was president in 97 and Hahn was president in 1968. Lucas has also won the the Nobel Prize, and every textbook, history, and survey of macro gives him significant attention. Hahn gets a mention every now and then. You must be really confused about my biases. You seem to think I'm a Austro-Post Keynesians devote of Lucas. I don't think such a person could exist. I've just been trying to give what I thought was due weight based on sources on this topic.--Bkwillwm (talk) 02:25, 18 June 2011 (UTC)

Please focus on what I wrote. The dispute is on Lucas's claim that his model be based on GE theory. Lucas has almost no contributions to GE theory, which is Hahn's specialty. Your parroting this claim despite its falsehood and published, demonstrated falsity is the problem.

Any explanation of why you parrot this falsehood is irrelevant to improving this article, and cannot be discussed per NPA and AGF.

I have never written that Hahn is more influential than Lucas, and I have never denied that Lucas is an extraordinarily influential and good macroeconomist (as well as a good academic, who served on Michael Wallerstein's committee for example), so your comparison is irrelevant. (Your quoted summaries of influence also suggest the ideological and faddish defects of macroeconomics, which appeal to authoritarian personalities and horrify scientists.)  Kiefer.Wolfowitz 13:10, 19 June 2011 (UTC)

Removing falsehood that Lucasian macro be based on GE theory

I removed the falsehood that Lucas's macroeconomics be based on GE theory (and its rebuttal by Hahn).  Kiefer.Wolfowitz 09:29, 20 June 2011 (UTC)

I posted below on GET theory. Reiterating those points though... one the article never said anything about Lucas and GET. It said RBC models were based on GET. This is not a heterodox or obscure view. Romer's textbook (2005) states this, as did the Nobel Committee, [2], as did Prescott and Kydland in their Econometrica article (one of the highest-quality journals). Maybe the claim that RBC is based on GET is wrong, but it looks like you're pushing a non-mainstream view.--Bkwillwm (talk) 00:35, 21 June 2011 (UTC)

::Find me one person who has contributed to GE theory who states that RBC is based on GET (in a non-trivial way). You are citing persons with no expertise in GET.  Kiefer.Wolfowitz 08:33, 21 June 2011 (UTC)

Your logic would open the article up to even more horseshit. Economics abounds with claims that X is based on GET. Will you next include Friedman's claim that dynamics are "ground out by the Walrasian equations" (if my memory is correct)? It was made by a Nobel Laureate after all?  Kiefer.Wolfowitz 08:36, 21 June 2011 (UTC)

The favor of a reply is requested.  Kiefer.Wolfowitz 02:00, 23 June 2011 (UTC)

Disequilibrium

1. Disequilibrium section. I think this still needs a lot of work. Having a paragraph or so on Barro, Grossman, Dreze and Benassy would be fair, but it needs to be simpler. I think we also need make it clear that disequilibrium models really fellout of favor in the US. Barro and Grossman recanted their work and disequilibrium models were marginalized. Every one of my sources says that or omits general disequilibrium models entirely (which also indicates they were marginalized). Tsoulfidis (a European) mentions the "fall" of disequilibrium in the title of the chapter on the subject. Backhouse, maybe not a ideal source--but informative, also documents a tapering off of disequilibrium research and citation.

[K.W. moved the mention of Backhouse below. ]

I think our selection should at least acknowledge the decline of disequilibrium in the US.

Please reconsider the statements by numerous new-Keynesian economists that their models are motivated by the desire to provide microfoundations for the rationing, or sticky-price disequilibrium economic models. Please see Gordon's call for more work on disequilibrium economics.  Kiefer.Wolfowitz 08:16, 17 June 2011 (UTC)

Obviously, New Keynesians and others have been trying to find (ad hoc) microeconomic models to explain the sluggishness of macroeconomies. There has also been a development of GE models that have macroeconomic consequences like disequilibrium theories.  Kiefer.Wolfowitz 13:30, 17 June 2011 (UTC)

Backhouse

Backhouse, maybe not a ideal source--but informative, also documents a tapering off of disequilibrium research and citation.

(Repeated from above, by K.W.)

Backhouse and coauthor looks like a honest and good effort at history.

Please see Solow's statement that he has been favoring disequilibrium economics since the 1970s (p. 10). (Backhouse's prefatory claim (p. 10)that Solow is alone seems to be just opinion, and is just wrong, as the examples of e.g. Quandt and Roberts show.)

Backhouses's discussion of kinked demand neglects the French and mathematical economics use of convex and Clarke/Milytin/Mordukhovich subdifferentials since the 1970s: Roger Guesnerie, Bernard Cornet, J.-F Mertens, Mas-Collel, Dreze, Dehez, Donald J. Brown, etc. There are references in the article on non-convexity (economics) and mathematical economics. Kinks and corners really don't present problems of existence: they complicate uniqueness and econometrics, of course. French economists have better mathematical training, and are better able to contribute to disequilibrium theory.

My main point here was the article should state that disequilibrium research declined in the US. It seems to be clear that it did except for a few. I think it's fair to keep the multi-sourced statement that disequilibrium work fell out of favor in the US.--Bkwillwm (talk) 02:30, 18 June 2011 (UTC)

Decline of general (dis)equilibria

Economists apparently talk more about general equilibria but know less about GET than they did 30 years ago. Their are some discussions of this phenomena in a collection by Hahn and another editor from c. 2002.

There are some recent books on general equilibrium theory that discuss the uses, abuses, appeals, and disaffinities of GET. These books probably discuss the aformentioned decline of mathematical GET with rationing (and perhaps the increase of the jabbering of "GE" by apprentices in the DSGE industry).  Kiefer.Wolfowitz 14:29, 20 June 2011 (UTC)

• Fabio Petri and Frank Hahn, eds., General Equilibrium: Problems and Prospects, Routledge, 2003
  • Franklin Fisher
  • Frank Hahn
  • Michael Magille and Martine Quinzii. two articles
  • Discussion
  • Summing up by Alan Kirman

• General equilibrium: theory and evidence W. D. A. Bryant

Heterodoxy

1. Heterodox. I hope we're in agreement that these sections can stay. I would like to restore some of the old PK [Post Keynesian, K.W.] text and reduce the amount of mathematical jargon. I would like at least the linking changed away from "fringe science." One of your sources says they are on the "academic fringe," which is slightly different.

I also don't like the idea of digging up empirical tests. I did a brief search and found one article in an Austrian journal that claimed to validate ABC with a vector-error correction model. Clearly the source isn't too reliable or worthy of weight here, but I suspect that's about all we'll get. I don't think top journals bother debunking heterodox thought. It should be enough to say they are on the academic fringe and don't guide policy.

I spun off another article on fringe macroeconomics. Now there's space for "Cambridge vs. Cambridge", which I'll bet is also included in your "histories", isn't it? (It is discussed by Backhouse!)

Regarding "mathematical jargon". You were introducing "ergodic" without a gloss, and then describing the martingale property. Samuelson introduced martingales in the 1960s, I believe, so this is well established in economics; semi-martingales are used in finance all the time. (This misuse of "ergodic" is another symptom of hucksterism---like "new-age" spiritualists / "holistic-health" gurus bullshitting about quantum mechanics.)  Kiefer.Wolfowitz 08:16, 17 June 2011 (UTC)

Edgard Elgar publishers specializing in republishing "classic collections" for 400 USD, which libraries buy. Their expertise may be questioned.  Kiefer.Wolfowitz 14:09, 17 June 2011 (UTC)

I guess we weren't in agreement. There's plenty of space on the PK page for C vs. C. A spinoff wasn't needed for that. Also, based on the limited feedback we got from others, the heterodox section were not undue. You didn't have a consensus to make that cut. Replacing ergodic with martingale is OR unless Davidson explains it that way elsewhere, regardless of wether or not its accurate. You're also introducing math jargon into a econ page and replacing the econ jargon (that was explained) with math jargon (which was not).

Also, I think it's clear that S&V is a good source. If you look up the page on Amazon, you'll see that Blanchard gave the book a favorable blurb, as did Leijonhufvud who also says that he used another S&V volume as his preferred textbook. They also managed to score interviews with James Tobin, Lucas, Friedman and other notable economists. Most of the book is simply mainstream macro. I don't think they're the eccentric wackos you'd like them to be.--Bkwillwm (talk) 02:37, 18 June 2011 (UTC)

Let's wait a few days for feedback to come in. Those topics were not in Handbooks of Macroeconomics or other high quality most reliable sources, although they were in good quality somewhat reliable sources. As you know, the people working in history of economics are usually either too weak to work in economics, too sloppy to be historians, or especially interested weirdo economics. 10:40, 18 June 2011 (UTC)

Ergodic was the wrong word or you gave the wrong explanation. Either eliminate falsehoods, or correct them and provide a source.  Kiefer.Wolfowitz 10:40, 18 June 2011 (UTC)

Disequilibrium isn't in the Handbook of Macroeconomics either. I've brought that up numerous times, and you ignore it. Handbooks aren't useful as the primary source for a history. The Handbook of Macro states that it represents the current state of the field, not the history.

Please see the Handbooks of Economics volumes in Handbook of Mathematical Economics and Handbook of Monetary Economics, where you will find a lot of discussion of disequilibria/stability, etc. I list selected chapters above. (I did not ignore your statement, but I qualified it, by describing the New Keynesian attempts to provide microfoundations for disequilibrium models.)

Please correct your misuse of the present tense.  Kiefer.Wolfowitz 13:33, 19 June 2011 (UTC)

"Ergodic" is the term used by the source. Feel free to actually pull up the source and let me know how I got it wrong. Maybe its not used the way you're used to. I'm working from a referenced source. You can't simply declare it to be "wrong." I'm merely stating the belief of the group anyway. It's not a statement of fact about the world. You should really check out WP:Ten Simple Rules for Editing Wikipedia found on your own user page.

Please read the article on ergodic to realize how misleading your link was. That section was marginal bullshit, which has now been spun off, so there is no point in discussing "erodic axiom" further.

You should be concerned with repeating falsehoods when you have been warned of their falsities. I avoid perpetuating lies when I have been warned of mistakes and am not impaired by stupidity or laziness.  Kiefer.Wolfowitz 13:33, 19 June 2011 (UTC)

I think we should put this up for RfC. I think the two issues (for the moment) are how much attention to give to Hahn and how much to devote to heterodox economics.--Bkwillwm (talk) 14:58, 18 June 2011 (UTC)

I would suggest asking first at the WikiProject Economics: However, a few days of waiting would be prudent, because we lack comments from Volunteer Marek and Marek _8. I would suggest your asking Protonk or Thomas Meeks to have a look also, because they have a lot of economics knowledge and high-quality WP experience. 09:57, 20 June 2011 (UTC)

However, your suggestion of topics of disagreement is too narrow and prejudicial.

I am concerned with your promoting bullshit on Wikipedia with (1) Lucas's claims that his models were based on GET (in anything more than wishful thinking) and with your undue weight promotion of (2) Austrian economics and (3) Post Keynesian economics.

I am not promoting Hahn but rather cite him as a most reliable, highest quality reference for the falsity of (1). The obvious difference between Lucas's 1970s work and contemporary DSGE also manifests the falsity of (1).

Regarding (2) and (3), your undue weight follows from your failure to use the highest quality most reliable sources, but rather your use of journalistic "histories" of economics written by persons without contributions to economic research. The highest quality most reliable sources ignore (2) and (3) as being unworthy of mention.  Kiefer.Wolfowitz 13:33, 19 June 2011 (UTC)

I suggested an RfA for Hahn and the heterodox sections because that's where I thought we had the most substantial disagreements. I don't see how that's prejudicial. Regarding GET, I don't think the article ever said anything about Lucas and GET. There was a statement stating that RBC was based on GET. I think I have a dozen references that RBC theory is based on general equilibrium (including Romer (2005), 215, and you've generally accepted Romer). Maybe RBC models weren't consistent with GET, but you're removing strongly cited material based on your personal beliefs. Maybe you and Hahn are right. It doesn't matter who's right though, we're supposed to present a consensus view. Maybe Hahn's critique is notable. I just wanted some evidence that it was. Even if Hahn and Solow's critique "demolished" RBC in 1995, Prescott and Kydland went on to get the Nobel for RBC theory in 2004. By the way, the citation mentions the relation of between RBC and GET.[3]--Bkwillwm (talk) 00:28, 21 June 2011 (UTC)

Swedish academics are no more immune to herd behavior than other academics. In particular, the Royal Academy of Sciences has repeatedly been smoking crack, most notoriously in giving the Nobel Prize to James Heckman because he found a way to use observational data in a "statistically proper" way, even after the debacle of PSID was well known (and despite the central message of a first course in scientific statistics, that randomized experiments are better than observational studies). To the best of my knowledge, nobody who has made any contribution to GE theory has stated that (sur)real business cycle "theory" has any substantial basis in GET. I doubt that the Nobel Committee's statement was vetted by the Lund economists who know something about GET.

Of course, it does matter who's right. You must decide if you want to write the truth or just parrot "consensus". Recall the Bush administration's blaming Saddam Hussein for complicity in the terroristic bombing of the World Trade Center, and the stupid parrot-behavior of the press. You must make an honest effort to evaluate your sources, especially if a claim is questioned.  Kiefer.Wolfowitz 08:27, 21 June 2011 (UTC)

Withdraw nomination?

Writing all this out makes the problems seem deeper than I thought. Unless we can quickly target specific changes that need to be made and specific points of contention that we can resolve (and a way to resolve it, ie sources to appeal to), I will pull the nomination.--Bkwillwm (talk) 02:04, 14 June 2011 (UTC)

I agree that the nomination must be pulled.

I think that you are using weak sources, and avoiding the most reliable high quality sources, and this methodological error is the source of all the other problems.

As I have written before, this article is at "good status", which is a significant accomplishment. This article is basically in very good shape. Your favored sources seem basically good, but we have some disagreements that seem significant. Sincerely,  Kiefer.Wolfowitz 08:16, 17 June 2011 (UTC)

Search and matching theory

It would be good to link up to search and matching theory. I would probably place it under New Keynesian economics, although neoclassical schools tend to accept it too. Rinconsoleao (talk) 15:08, 16 June 2011 (UTC)

On second thought, it might fit better in the Synthesis section, since by the time search and matching started to become a really hot topic in macroeconomics (with debates over the Shimer puzzle), RBC and New Keynesian approaches were already converging. Rinconsoleao (talk) 17:29, 16 June 2011 (UTC)

there is a mention kind of wedged into the coordination failure section. I would put it in the synthesis section, but I don't have a source that places it there.--Bkwillwm (talk) 02:26, 17 June 2011 (UTC)

FAC evaluation

I have tried to help improve the article.

• To avoid undue weight, I spun-off the heterodox sections.
• I removed the claim that Lucas's models were based on General Equilibrium Theory in any serious sense: That patent falsehood is not discussed in the rest of the article, so its willful inclusion could only be a pointless distraction.

The article seems to be on its way to meeting featured-article criteria.

The largest problem is its reliance on journalistic histories of economics, which apparently contain so many errors that they cannot be considered reliable sources, and freely available opinion papers, rather than refereed journal articles or highest quality, most reliable sources (handbooks of economics, etc.). The best (known to me) sources are listed in a further reading section.

A second problem is its over-emphasis on the United States and Britain. The editors should please consider attending to

• Open economies: The discussion is patterned after US textbooks, which ignore international markets. This domesticated macro is becoming less relevant daily for the USA, and has been limited for most of the world for decades. Consider international market integration and the decline of classical-Keynesian policy options (c.f. Mitterand's problematic expansion, which benefited Germany).
• Knut Wiksell and the Stockholm School, particularly in comparison to Keynes and Keynesian policy. (In theory, their discussion of ex post and ex ante uncertainty is more important than the previously vague exhortations about uncertainty attributed to "Post Keynesianism").
• Social-democratic and social-market economics: E.g., indicative planning and public econonics in France, Frisch in Norway, Tinbergen in the Netherlands, etc.

Third, more attention to empirical evaluation and policy is needed. For example, the larger share of income versus profit/interest in GDP should be mentioned. (The current bizarre (Kyddland Prescott) explanation of unemployment by changing preferences for leisure stood alone and unchallenged, despite its ridicule by most economists, before I imported Summer's criticisms. The Kyddland-Prescott paper is valued for other insights, for example on the importance of supply shocks.)

Fourth, there is no discussion of mathematics and the mathematicization of macroeconomics, surely a consensus topic widely documented and discussed. Ditto with statistics, econometrics, and stochastic control.

Thanks!  Kiefer.Wolfowitz 13:22, 20 June 2011 (UTC)

I'll give you Wicksell, but what source do you have for the significance of indicative planning? I know you don't like the "journalistic" histories of macro I've used (one book is by Brits and another by a Greek, plus a survey by a Frenchman, so US bias is far from total), but they at least provide a frame work for deciding what should go into an article. Without making a justification for other topics, this article could become of a stone soup of subjective choices. Please provide another source or at least make a justification for importance besides your fiat.

Writing more on the mathematicization of macro would be OK, but this is a theory article, not a general macro article. Going too far beyond theory will make this article unwieldy. There are plenty of other places on Wikipedia for empirical, and policy work to go.--Bkwillwm (talk) 00:07, 21 June 2011 (UTC)

In principle I agree with much of what Kiefer wrote above, and I agree that the mathematicization of macro needs more emphasis (it's all DSGE now). However, I agree also with Bkwillwm that covering statistics, econometrics, and stochastic control would make this article overlong. Some short mentions in the relevant sections may be appropriate. As for sources, I think Bkwillwm takes the correct approach in using books on the history of economic thought. However, survey articles and handbooks of economics are arguably more reliable, but care must be taken in using them as they are usually more focused on particular topics. LK (talk) 01:29, 21 June 2011 (UTC)

Alarm bells had been ringing because of a few claims, which have been redacted. IMHO, the article is basically in good shape. Its following conventional histories is a sensible strategy, although common sense (and talk-page consensus) should allow amendments using more reliable and higher quality sources, if a journalistic claim is challenged.

I am puzzled and troubled by Bkwilwm's claim that this article's emphasis on "theory" conflicts with mathematics, because mathematics is the primary medium of theory; mathematics is nearly the exclusive medium of theory in economics. Of course, an encyclopedia article differs from a textbook or professional survey in needing to restrain its use of mathematics and statistics; nonetheless, some mention of estimation of simultaneous equations should occur in the 1930-1973 macroeconomics section, for example. Some discussion of representative agents should occur for Blanchard-style macro and DSGE, also.  Kiefer.Wolfowitz 08:11, 21 June 2011 (UTC)

J. W. Gibbs, Thermodynamics, and phenomenology (science)

The article fails to mention that macroeconomics was inspired by analogy with macroscopic theories in physics. This analogy was foremost in Paul Samuelson's mind, which was inspired by his hero, J. W. Gibbs.  Kiefer.Wolfowitz 20:54, 20 June 2011 (UTC)

What's the source that claims Gibbs was an important inspiration for macro? Was Gibbs an influence on Samuelson only or macro in general?--Bkwillwm (talk) 23:56, 20 June 2011 (UTC)

Honestly, I don't remember! This seems obvious to me, because I'm interested in convex conjugacy in general and exponential families in statistics!

I'll look for a reference. Sincerely,  Kiefer.Wolfowitz 07:54, 21 June 2011 (UTC)

Wrong! Wrong! Wrong!

Google suggests Ragnar Frisch 1933 for "Macrosystem" and Jacob Marschak 1945 for macroeconomics.  Kiefer.Wolfowitz 22:28, 25 June 2011 (UTC)

Interpreting ithe General Theory

Kiefer.wolfowitz removed the section on interpreting Keynes's General Theory and gave the edit summary "Cut paragraph, which serves as The Baptist's announcement that Weirdo Economics is coming." The paragraph had much to do about interpreting the General Theory beyond heterodox economics. The role of uncertainty is an important issue in Keynes scholarship beyond the role it plays in heterodox thought. Skidelsky often writes on the topic and Paul Krugman just presented on the two different perspectives at a conference. I'm reinserting the section. It not only covers this aspect of Keynes scholarship. It also sets up the disequilibrium section. The fact that Post Keynesians also focus on the role of uncertainty should also be mentioned here.--Bkwillwm (talk) 00:02, 23 June 2011 (UTC)

"Keynes had a unique perspective on probability" cries out for copy editing or content or both.

Please read Partha Dagupta's essay why such claims are baseless. (Google Scholar will point you to an essay c. 2002.)  Kiefer.Wolfowitz 00:35, 23 June 2011 (UTC)

Citation recycling

I've stood by for the most part while User:Kiefer.Wolfowitz made substantial edits. While going through them now, I noticed that he recycled many of my citations instead of adding his own to back his statements.

• KW changed: "While Keynes's successors paid little attention to the probabilistic aspects of his work, uncertainty may have played a central part in the investment and liquidity preference aspects of the General Theory." to "Keynes's emphasized uncertainty in the investerors' utility for investment and liquidity in the General Theory", but kept the same reference to "Keynes and Probability." The edit says something different and it's not backed up by the source.

my "treatise" should be "monograph".  Kiefer.Wolfowitz 05:35, 23 June 2011 (UTC)

• KW added "non-convexity" to list of assumptions behind the neoclassical synthesis. He left my references Romer 1993 and Snowdon and Vane in place, which makes it appear like they back this fact. I doubled checked, and neither mentions anything about convexity.
• KW changed the text here to make it seem like Davidson was writing about martingales. Davidson never mentions them in his book.

I don't think these edits are malicious, but they undermine the integrity of the article. They make it seem like information has been sourced when it has not. I don't dispute any of these additions (except the martingales) to the article, but, if they remain, they need their own citations instead of borrowed ones from different text.--Bkwillwm (talk) 01:24, 23 June 2011 (UTC)

Honestly, I have trouble making sense of this section. These assumptions are used in GE theory to prove the existence of an equilibrium---and this is micro. Who says that these assumptions are used in macro, especially by neoclassical macroeconomics? I thought your sources were claiming that the RBC was based on GE theory---a falsity or (because it could as well be said of any number of predecessor theories) a vacuous and misleading statement.

Let's remove "ergodic axiom". My check of Google scholar suggests that Davidson and buddies are the primary and perhaps (based on viewing the top 20 cites) only people using that term.  Kiefer.Wolfowitz 03:23, 23 June 2011 (UTC)

:Pride goeth before the fall, as my Baptist friends say.

You haven't learned from my copy edits, and I am a much better writer than you are. Just look how you have weakened the prose in the first edit! Strunk and White can help you.

In economics, you are reintroducing errors, because you follow weak sources and apparently don't understand even undergraduate (U.S. M.A.) material in economics and statistics: You reverted my clarification of positive correlation, and you reverted my use of non-convexity rather than non-externality: You apparently don't know the use of Brouwer/Kakutani's fixed point theorem in proving existence results in general equilibrium theory or you have a misunderstanding of WP citation. We don't have to cite everything, only things that are likely to be challenged. I cannot believe that you really want a citation that convexity (rather than non-externality) is the usual statement for the existence of GE!

Look at Dasgupta's article, which explains the errors of such statements. Why are you treating Keynes like a holy book, rather than a sketch of a theory?, as Dagupta noted. I have tried to help you.  Kiefer.Wolfowitz 01:47, 23 June 2011 (UTC)

I didn't dispute convexity as a condition of GE, but I do have a problem with you slipping in so that it looks like it's supported by existing citations. That's poor editing practice, and it looks like you've done it elsewhere. Also, please refrain from personal attacks. I've tried to ignore your attacks for awhile. You're consistently referring to things as "BS" or some other form of "-S;" You accuse me of promoting causes I have no intention of promoting; You've acknowledged you're not assuming good faith.--Bkwillwm (talk) 02:22, 23 June 2011 (UTC)

:You reintroduced the statement that there was no room for uncertainty in mainstream economics. Maybe you should read Debreu's Theory of Value, Arrow's Essays on Risk Bearing, and the Stockholm school on ex ante versus ex post equilibrium before you inflict more nonsense on the public.  Kiefer.Wolfowitz 01:52, 23 June 2011 (UTC)

The statement is true for mainstream macro. Arrow is a micro guy, and disequilibrium economics is outside the mainstream. I got a citation for it, and I could get more.--Bkwillwm (talk) 02:22, 23 June 2011 (UTC)

Read your last paragraph aloud, and if it sounds dumb to you too, then revise it and delete this. (Happens to me sometimes!)  Kiefer.Wolfowitz 04:29, 23 June 2011 (UTC)

I am sorry for getting irritated with you. I had thought that you were a graduate student. William and Mary has such a good reputation that I thought it was a Ph.D.-granting university in economics!

:-)

Frankly, I thought that you were several years older with probably double the mathematics, statistics, and economics background as you have. Concretely, I now understand why you don't feel comfortable with my stating results that should be known after a year of graduate study in economics; I understand that your article must be a bit more cautious than I had previously believed. I shall try to work more graciously with you. A word of advice: Try to take as many courses with Don Campbell and as much mathematics and statistics as possible (and learn to program in MATLAB). Again, I'm sorry for getting so irritated with your edits.

I have written a number of articles with several people, and I have always tried to behave openly and directly. Let me try again with you, okay?

Please consider the tenor of my edits, and see that (1) most of them were softening a strong statement, in something like a NPOV or encyclopedia tone. I think that this is better than giving the public a strong statement by one group of researchers (e.g. RBC enthusiasts claiming to be based on Arrow Debreu) and a contrary (contemptuous) statement by another group of economists (e.g. Hahn, who knows what he is talking about, I can tell you). If we cannot honestly represent a scientific consensus, then let us try to we can find two or more reasonable statements that are each supported with the highest quality most reliable sources.

I believe that many of my other edits for your article were (2) copy editing or (3) correcting a Good-Faith error or infelicity: Is there any such edit that you don't understand? As for (4) the remainder, I can make mistakes too!

I'll let you make whatever edits you want for a while. When you finish, let me know, and I'll compare, and then make some edits. Does that sound like an amiable plan? Again, I'm sorry that I got so irritated with you. You are doing very well.

Sincerely,  Kiefer.Wolfowitz 03:04, 23 June 2011 (UTC)

I graduated from W&M awhile ago. I'm working on my master's now. For the most part, I don't have problem with the edits you've made softening some of my wording. I appreciate your offer to let me take over editing for awhile, but I think it might be better to go through the article section by section first. I don't want to put more work into this article only to have you oppose it because of the sources etc. I have taken much of your feedback seriously. I bought Benassy's textbook, Malinvaud's book, and got a few articles changes in methodology, but I've held off on making those additions while we're trying to figure out larger issues of scope and weighting. I think we especially need to work on the RBC section. Right now it its a mess of tags, I don't think a bulleted list criticisms will fly for an FA. I'll take a stab at reworking the disequilibrium section.--Bkwillwm (talk) 21:00, 25 June 2011 (UTC)

Your suggestion of working on sections makes more sense: It lets both of us work on small sections, rather than committing to Herculean labors.

In the first section, I made edits. It is probably worth emphasizing/explaining the avoidance of the term "business cycle" and the use of economic fluctuations more in modern economics more (although Fourier analysis remains an important part of time series analysis): Indeed, the article I cited on criticisms of NBER had a good discussion of Fourier analytic arguments (before Wold-Whittle, Wiener, and Kolmogorov).

BTW, there is a wide-ranging discussion of macroeconomics and statistics in the Scandindavian Journal of Economics issue with Summers: Also it has good comments by the late Birgit Grodal (a specialist in GE theory) on Summers, and more good articles by Ed Leamer and Prescott/Kydland.

In this issue of SJE, Prescott/Kydland emphasize their indebtedness to advances to mathematical economics and optimization: Statistical decision theory, recursive optimization/dynamic programming, general equilibrium theory (and maybe a fourth topic). (A similar list was made in Drèze's Presidental Address to the Econometric Society, Econometrics and decision theory!) It is true that they used a GE approach (more power to them!), but having 2-3 representative agents perform dynamic programming exercises on conventional functional forms is a bit far from the N-agent, D-commodity world of Arrow-Debreu, as 3<N for large N!

In an earlier issue of SJE, the one with Drèze and Bean, there are critical discussions of their approach (including by Swedes who implemented their approach for Sweden), and other essays by Phelps, and maybe Malinvaud, Layard and Lindbeck.  Kiefer.Wolfowitz 22:09, 25 June 2011 (UTC)

Saying that "Arrow is a micro guy" is an understatement. He has written e.g. great papers and monographs on growth economics (learning by doing, public investment, environmental economics with non-convexities with Dasgupta and Mäler, etc.), which are relevant to your article. He is also a statistician and operations researcher and a real mensch.  Kiefer.Wolfowitz 03:11, 23 June 2011 (UTC)

Arrow is a lot like Samuelson in terms of topic coverage - everywhere. Having said that, most of his macro contributions would probably be in the growth area rather than fluctuations. And it is true (unfortunately, IMO) that most macro done these days is about fluctuations rather than growth.Volunteer Marek (talk) 05:25, 23 June 2011 (UTC)

And as far as the whole uncertainty thing goes, my understanding is that folks like Davidson follow Knight (and argue that Keynes himself was following/agreeing with Knight) in distinguishing between risk (with well defined probability distributions and priors) and uncertainty (which from what I understands corresponds somewhat to the micro mainstream view of Ambiguity like the kind in the Ellsberg paradox). This is also where the ergodic thing comes in. IIRC Davidson attributes the usage of the "ergodic" terminology to Samuelson.Volunteer Marek (talk) 05:35, 23 June 2011 (UTC)

Further reading

I don't understand your statement that empirical material is outside the scope of this article. You got feedback from Marek and LK, and they both agree that more discussion of reality (as opposed to professors lounging with brandy sifters congratulating themselves on their "microfoundations") was desirable.

You are the guy claiming that RBC is related to GE theory, and that this claim is important, and now you are tagging the further reading as undue weight?

Have you even looked at these books before tagging?  Kiefer.Wolfowitz 04:26, 23 June 2011 (UTC)

Yes, I did look before tagging this section. I think it's undue weight to many of this section list books on disequilibrium and general equilibrium theorists. There're also several econometric/empirical focused works that aren't really in scope here. The section needs to be balanced. You've added a bunch of tags to this article, and I haven't removed them. Please don't remove the tags I add.--Bkwillwm (talk) 21:11, 25 June 2011 (UTC)

The Further Reading section contains more challenging books. I moved Woodford's standard macroeconomics book up along with the Handbooks in Economics.

I moved the GE books into a subsection: Much of this article concerns claims about GE economics and macroeconomics: These seem to be the best books, the last time that I looked. Of course, some could be trimmed.  Kiefer.Wolfowitz 22:32, 25 June 2011 (UTC)

OK. At least it's clear what's represented now. I won't raise any more objections on this.--Bkwillwm (talk) 00:58, 26 June 2011 (UTC)