Showing papers by "Robert M. Solow published in 2005"
TL;DR: In this paper, the authors try to make sense of the evolution of economics over a span of more than 1 1 1/2fty years by comparing two photographs taken from the same spot, looking in the same direction, but are at least thirty, forty, or 1 2fty years apart.
Abstract: pline began in September 1940 when I enrolled as a freshman in the elementary economics course at Harvard College. I will try in this essay to make sense of the evolution of economics over a span of more than 1⁄2fty years. An analogy that comes to mind is from The Boston Globe. The Sunday edition occasionally publishes pairs of photographs of urban landscapes. They are taken from the same spot, looking in the same direction, but are at least thirty, forty, or 1⁄2fty years apart. One shows a corner of the city as it looked then and the other as it looks now. Some buildings have disappeared, some new ones have been built, and some of the old ones are still there but with altered facades. This description is also true of the landscape and structure of economics, and I would like to provide a few then-and-now snapshots. The difference, however, is that with economics something more is called for; the pictures have to be connected. I would like to tell a story about how and why the architecture of economics changed. It will be a sort of Whig history but without the smugness.
122 citations
TL;DR: The use of fiscal policy as a stabilization device has all but vanished, more or less explicitly in Europe and de facto in the United States as mentioned in this paper, and the practical consequences have not been entirely satisfactory, in either place.
Abstract: The use of fiscal policy as a stabilization device has all but vanished, more or less explicitly in Europe and de facto in the United States. The practical consequences have not been entirely satisfactory, in either place. So it is important and timely that the Oxford Review is devoting a special issue to the macroeconomics of fiscal policy. In this paper I want to discuss two underlying questions about the eclipse of fiscal policy. Why did this happen and was it a good ideaq And if it was not a good idea, then what followsq Copyright 2005, Oxford University Press.
69 citations
01 Jan 2005
TL;DR: The authors discusses the current state of neoclassical growth theory and expresses some surprise at the lack of attention both to multi-sector and multi-country models with trade and capital flows, and suggests that there might be value in further analysis of some old topics like capital substitution with an expanded definition of capital, and the interaction of growth and medium-run phenomena.
Abstract: This note contains some general and idiosyncratic reflections on the current state of neoclassical growth theory. It expresses some surprise at the lack of attention both to multi-sector growth models and to multi-country models with trade and capital flows. It also suggests that there might be value in further analysis of some old topics like capital–labor substitution with an expanded definition of capital, and the interaction of growth and medium-run phenomena (or, to put it differently, the interaction of demand-side and supply-side variations).
48 citations
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TL;DR: The authors discusses the current state of neoclassical growth theory and expresses some surprise at the lack of attention both to multi-sector and multi-country models with trade and capital flows, and suggests that there might be value in further analysis of some old topics like capital-labor substitution with an expanded definition of capital.
Abstract: This note contains some general and idiosyncratic reflections on the current state of neoclassical growth theory. It expresses some surprise at the lack of attention both to multi-sector growth models and to multi-country models with trade and capital flows. It also suggests that there might be value in further analysis of some old topics like capital-labor substitution with an expanded definition of capital, and the interaction of growth and medium-run phenomena (or, to put it differently, the interaction of demand-side and supply-side variations).
34 citations
TL;DR: The first article published by Franco Modigliani has become one of the basic texts of modern Keynesian economics as mentioned in this paper, and it formalized the model (or at least one model) implicit in the General Theory.
Abstract: The first article published by Franco Modigliani has become one of the basic texts of the modern Keynesian economics. It formalized the model (or at least one model) implicit in the General Theory. Modigliani argued that the characteristics Keynesian conclusions are based primarily on the (realistic) rigidity of nominal wages. In particular, it showed that if wages and prices were flexible, the theory of liquidity preference of money could not generate persistent involuntary unemployment, but if wages were rigid, the theory of the amount of money could do it. Sixty years later Modigliani returned to expose the "Keynesian gospel" and proposed essentially the same interpretation. This article reconsiders and discusses this approach to macroeconomics, with some reference to its implications for economic policy. JEL Codes: B22, E12
3 citations
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TL;DR: The first article published by Franco Modigliani has become one of the basic texts of the modern Keynesian economics as discussed by the authors, and it formalized the model (or at least one model) implicit in the General Theory.
Abstract: Il primo articolo pubblicato di Franco Modigliani e divenuto uno dei testi base della moderna economia keynesiana. In esso ha formalizzato il modello (o almeno un modello) implicito nella Teoria Generale . Modigliani sosteneva che le caratteristiche conclusioni keynesiane poggiano fondamentalmente sulla (realistica) rigidita dei salari nominali. In particolare, ha mostrato che se i salari e i prezzi fossero flessibili, la teoria della preferenza di liquidita della moneta non potrebbe generare persistente disoccupazione involontaria, ma se i salari fossero rigidi, anche la teoria della quantita della moneta potrebbe farlo. Sessant’anni piu tardi Modigliani e tornato a esporre il “vangelo keynesiano” e ha proposto essenzialmente la medesima interpretazione. Questo articolo riconsidera e discute questo approccio alla macroeconomia, con alcuni riferimenti alle sue implicazioni per la politica economica. The first article published by Franco Modigliani has become one of the basic texts of the modern Keynesian economics. It formalized the model (or at least one model) implicit in the General Theory. Modigliani argued that the characteristics Keynesian conclusions are based primarily on the (realistic) rigidity of nominal wages. In particular, it showed that if wages and prices were flexible, the theory of liquidity preference of money could not generate persistent involuntary unemployment, but if wages were rigid, the theory of the amount of money could do it. Sixty years later Modigliani returned to expose the "Keynesian gospel" and proposed essentially the same interpretation. This article reconsiders and discusses this approach to macroeconomics, with some reference to its implications for economic policy. JEL Codes: B22, E12 Keywords: Franco Modigliani, verifiche empiriche, ciclo vitale, Keynes, disoccupazione, teoria della spesa
1 citations
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TL;DR: The first article published by Franco Modigliani has become one of the basic texts of the modern Keynesian economics as discussed by the authors, and it formalized the model (or at least one model) implicit in the General Theory.
Abstract: Il primo articolo pubblicato di Franco Modigliani e divenuto uno dei testi base della moderna economia keynesiana. In esso ha formalizzato il modello (o almeno un modello) implicito nella Teoria Generale. Modigliani sosteneva che le caratteristiche conclusioni keynesiane poggiano fondamentalmente sulla (realistica) rigidita dei salari nominali. In particolare, ha mostrato che se i salari e i prezzi fossero flessibili, la teoria della preferenza di liquidita della moneta non potrebbe generare persistente disoccupazione involontaria, ma se i salari fossero rigidi, anche la teoria della quantita della moneta potrebbe farlo. Sessant’anni piu tardi Modigliani e tornato a esporre il “vangelo keynesiano” e ha proposto essenzialmente la medesima interpretazione. Questo articolo riconsidera e discute questo approccio alla macroeconomia, con alcuni riferimenti alle sue implicazioni per la politica economica.The first article published by Franco Modigliani has become one of the basic texts of the modern Keynesian economics. It formalized the model (or at least one model) implicit in the General Theory. Modigliani argued that the characteristics Keynesian conclusions are based primarily on the (realistic) rigidity of nominal wages. In particular, it showed that if wages and prices were flexible, the theory of liquidity preference of money could not generate persistent involuntary unemployment, but if wages were rigid, the theory of the amount of money could do it. Sixty years later Modigliani returned to expose the "Keynesian gospel" and proposed essentially the same interpretation. This article reconsiders and discusses this approach to macroeconomics, with some reference to its implications for economic policy.