Talk:History of macroeconomic thought/Archive 2

Archive 1

Archive 2

Missing topics of so-called "history of economic thought"

I looked at Tsfotis's book,

• Tsoulfidis, Lefteris (2010). Competing schools of economic thought. London: Springer. ISBN 978-3-54-092692-4.

which confirmed that that source had the same problems of the first New Palgrave.

If this article is truly to follow this weird literature, there are several missing topics (to which I now 22:42, 25 June 2011 (UTC) provide links):

• Marxism (Chapter 5)
• Neo-Ricardianism and Piero Sraffa, and the related

• "Cambridge versus Cambridge" capital debates (Chapter 8) but see also parts of Chapter 7 on Robinson

These dreary topics receive a chapter each in Tsoulfidis's book. The "Companion" by Samuels, Biddle, etc. devotes three times as much space to weirdo ("heterodox") economics as to macroeconomics since Keynes.

This article seems like a very selective presentation of topics from its cited sources, where a representative presentation would reveal that this whole literature is not to be trusted.  Kiefer.Wolfowitz 00:29, 25 June 2011 (UTC)

I don't think that's an accurate representation of Tsoulfidis. First, he covers more than macro. The Marx chapter comes before and is treated separately. I'm not sure what you're referring to as the "Neo-Ricardianism and Piero Sraffa" chapter. I don't see anything that meets that description. The Cambridge debate is only a section in a larger chapter on capital theory.

Yes, this article is a selective representation of it's sources. That's what it has to be. If several books are used as sources for article, clearly there's going to be some topic selection to reduce the content down to an encyclopedic treatment. I don't buy your "all or nothing" argument that since we can't cover the entirety of a sources content we can't include any. You sought feedback from LK, and he agreed that these were appropriate sources for the article. There's also been some feedback from others (Marek) that the previous amount of space devoted to heterodox economics was acceptable. I'm going to restore the heterodox section. If you want to make the argument the Marxism or something else needs to be covered, then we can discuss it, but I hope we can move past whether HET books are acceptable. You haven't provided much of an alternative besides the Handbooks. And, like I've said many times, these aren't a good basis for this article since they focus on current economics and don't do much to cover clearly important aspects of macroeconomic history including Keynes's General Theory.--Bkwillwm (talk) 21:24, 25 June 2011 (UTC)

It is particularly bad to end the article promoting weirdo economics, imho. I would rather that you move the "Austrian" and post-Keynesian cliques earlier in the article, e.g., pre-Keynesian economics for ABC and after Keynes for the "post Keynesianism".

RE Marek's opinion: I shall respectfully maintain that you are both wrong. However, Marek has proved to have good judgment before, so I shall hold my peace and I shall hope that more parties join the discussion. I would hope that Marek would at least edit these sections for quality and due weight issues. Sincerely,  Kiefer.Wolfowitz 22:20, 25 June 2011 (UTC)

Please look at the table of contents for Tsoulfidis. I think the search gives you a misleading sense of the book's content. The Ricardo sections are on Ricardo himself, not neo-Ricardians. I think covering Ricardo in a HET book is completely orthodox.

I'm not opposed to moving the heterodox sections around, but I think they're better in the end. Initially, I you send it was good it was buried at the bottom. The Austrian business cycle doesn't fit well into the pre-Keynesian section. It wasn't really developed until the 50s and 60s, well after Keynes. The Post Keynesian section could be moved too, but IMO it's better to group the heterodox sections together. It makes it clear that they separate from the mainstream.--Bkwillwm (talk) 00:52, 26 June 2011 (UTC)

I vote for keeping the heterodox stuff at the end. It's simpler. Also improves sequencing/readability of mainsteam stuff. Makes heterodox stuff easier to find, for those interested. If ACE paragraph is added, provides link to possible future advances. Rinconsoleao (talk) 11:48, 7 July 2011 (UTC)

GE theory and uniqueness

2011 macro theory has learned from 1950s Arrow Debreu theory that uniqueness need not hold for market-clearing prices. Isn't it the case that RBC and Kyddland-Prescott macromodels typically had unique equilibria?  Kiefer.Wolfowitz 22:56, 25 June 2011 (UTC)

AFAIK, models are tweaked until there is a unique equilibrium. Multiple equilibria are considered a bug, not a feature. LK (talk) 03:43, 30 June 2011 (UTC)

RBC makes much stronger functional form assumptions than Arrow-Debreu. Thereby Kydland-Prescott got uniqueness. More generally, DSGE often leads to multiplicity (especially indeterminacy), but like LK says, this is usually treated as a bug. Rinconsoleao (talk) 11:51, 7 July 2011 (UTC)

Simultaneous equations versus Keynesian econometrics

There is a discussion of Keynesian econometrics having large models with systems of simultaneous equations. This seems to be problematic, because such econometrics was essentially the same as used in partial-equilibrium models of microeconomics, where supply and demand functions were estiamted.

Kyddland and Prescott (SJE) state that such systems of equations models have given way to GE-inspired models in microeconomics (e.g. labor) and then in macroeconomics. This seems to be a valuable insight and clear statement, which is preferable to the current formulations.  Kiefer.Wolfowitz 23:00, 25 June 2011 (UTC)

Disequilibrium economics and New Keynesian economics

The Disequilibrium economics section belongs before the New Keynesian economics section.

Also, a look at the 2-volume (U MN) Rational Expectations and Econometric Practice (Lucas, Sargent) shows that many of the people were at Fed Reserve banks, besides universities. Hansen and Sargent were at the MN Fed.  Kiefer.Wolfowitz 23:36, 25 June 2011 (UTC)

Weighting comments (responding to Wikiproject request)

This talk page is so huge I can't find the comments about undue weight that were mentioned at the Wikiproject economics page. Here's my opinion (as a professional macroeconomic researcher, with a mainstream viewpoint but some knowledge of the alternatives, and with experience in US and European research environments). Rinconsoleao (talk) 09:41, 7 July 2011 (UTC)

(1) This article definitely does NOT give undue weight to Post-Keynesian economics. Especially with renewed interest in Minsky and renewed recognition of the blind spots in today's theories, a paragraph discussing PKE is appropriate.

(2) This article definitely does NOT give undue weight to Austrian economics. Wikipedia often gives undue weight to Austrian economics because some ideologically-motivated non-specialists like it. But Austrians played an important historical role and they offered lots of ideas about business cycles. So a paragraph discussing Austrian economics is appropriate. While Hayek's view of the price system as a way of economizing on information costs is not directly relevant to business cycle theory, it's an extremely important big-picture insight that bears on overall economic efficiency and therefore deserves mention in the paragraph.

(3) This article gives undue weight to "disequilibrium economics". There was a lot of important European work on economies where some prices are temporarily fixed which, admittedly, got less attention in the US. But I would argue that it ran roughly in parallel with other New Keynesian microfoundations work (i.e. NK economics prior to the development of NK DSGE models). Like the other microfoundations work, it used models that were too stylized to compare closely to time series data. When everyone moved on to NK or "New Synthesis" DSGE models, the very simple ad hoc sticky price assumptions in those models were sufficient to address most of the issues and effects the "disequilibrium" models were trying to capture. That's why the "disequilibrium" literature is basically completely forgotten now. I think it's OK to include a short section on disequilibrium economics, but alternatively it could be folded into the New Keynesian section.

(4) I'm disappointed that some material on Agent-Based Computational Economics that existed in some early versions of this page has gotten deleted. I think there should be a paragraph on ACE in the section on heterodox approaches. I agree with Kiefer that much ACE work is junk, and I'm skeptical about calls (even by The Economist!) for ACE to replace DSGE. Nonetheless I do think some ACE work is good and is improving, and there are also a lot of mainstream economists who are moving closer to ACE (especially by using adaptive learning models instead of rational expectations-- people like Thomas Sargent, George Evans, Seppo Honkapohja, Albert Marcet, Klaus Adam, and Kevin Lansing for example). So not only is ACE one of the more important heterodox schools today, I believe it's the heterodox area where progress is most likely in the near future.

As for the crucial question "has ACE taught us anything?", Arthur's models of technological lock-in and various stock market models (Blake LeBaron, or Brock and Hommes) where adaptive learning helps create bubbles come to mind... but in both cases the empirical evidence favoring these particular mechanisms is very thin. The most important contribution of ACE that I can think of is papers by Brock, Hommes, and Wagener (JEDC 2010) and Matteo Marsili (2009, "Complexity and financial stability...") that propose models where the introduction of more complex financial instruments destabilizes the economy. That's an extremely widespread idea, which seems plausible post-crisis, but I am unaware of any papers in mainstream traditions that have actually found ways to model the idea. (That might just be my ignorance... I know more about macro than finance... but it could also be because mainstream approaches conclude automatically because of their rationality assumptions that complex instruments stabilize the economy by making markets more complete.) A key area where ACE may make progress while DSGE remains computationally infeasible is dynamics on networks (including possible applications to financial contagion).

By the way, I mentally lump statistical physics methods together with ACE. Might be more accurate to title the paragraph 'ACE and econophysics'.

--Rinconsoleao (talk) 09:41, 7 July 2011 (UTC)

As someone with a similar background (mainstream with some knowledge of heterodox, however, no active research in macro), I agree with almost everything Rinconsoleao wrote above. I'ld give post-Keynesian economics a bit more space. It's an important research agenda in the UK and Australia.

ACE deserves some mention. I believe (hope) that ACE will be more important in the future, as computers get faster and programming skills improve. However, AFAIK, econophysics is going nowhere. (As an aside, Thomas Sargent is using adaptive learning models? Heh. Hell must have frozen over.) LK (talk) 11:19, 7 July 2011 (UTC)

In spite of his intense POV as a founder of rational expectations, Sargent has been working on learning for many years. His book "Bounded Rationality in Macroeconomics" seems to have pushed the literature forward. Apparently he correctly understood that whether learning might converge to rational expectations was a fundamental issue for his research agenda. Rinconsoleao (talk) 11:29, 7 July 2011 (UTC)

Since Bkwillwm clearly agrees too, I'll remove the undue weight tags from the heterodox sections. Rinconsoleao (talk) 14:07, 7 July 2011 (UTC)

Thanks for the input, Rinconsoleao and LK. I'd like to add back some material on agent-based models. It might be better to discuss ABMs outside of ACE. I don't think ABMs are considered heterodox themselves, merely emergent and with unproven utility. I'll add back some material to the financial crisis section, because they have been discussed in relation to the crisis Nature and the Economist. Also, since I removed the material I chapter by Leijonhufvud where he tips his hat to ABMs, and INET (which attracts a lot of big names to its conferences) included a complexity economics panel.[1] I think these give added justification to mentioning ABMs.

Since this page is about macroeconomics, I don't think it would be better to discuss ABMs outside ACE. Rinconsoleao (talk) 09:35, 11 July 2011 (UTC)

I also think the disequilibrium section needs to be heavily edited. Some sources do treat these models as part of new Keynesianism (Mankiw's articles), but others treat DE separately (Tsoulfidis). I think it's better to trace the tradition from Patinkin/Leijonhufvud/Clower, to Barro/Grossman, to Malinvaud/Drèze/Bénassy. I'd like to cut a lot of the clutter though. If the text doesn't make it clear what an economist's contribution to theory was (Quandt, Fisher), then the text should be cut. I've also tried to keep this article pretty accessible (assuming that someone is familiar with the content in Economics and a non-existant good article on macroeconomics). I think the last DE section dumps too much on the reader.--Bkwillwm (talk) 12:59, 8 July 2011 (UTC)

About disequilibrium, my revision clarified that Drèze-equilibrium was an extension of Arrow-Debreu equilibrium (the latter was claimed to be of great relevance the RBC model, although 2-3 agents is pretty far from AD theory, and Hahn just laughs at this claim).

Rinconsoleo confuses the GE theory for the ad-hoc models of Barrow-Grossman, which did have the virtue of having a place for unemployment, which did impress Layard, Bean, and Nickel enough that they include it in their book. But what do they know? ;)

I had complained before that the article failed to indicate anything about the factor shares in the GDP. It used to be 70% for income, right? An econometric investigation of the labor market should be of some interest, insofar as this is not an article about tie-widths and skirt heights. Presumably, if macroeconomics is not just fad driven, there should be some account of progress, including predictive improvements, as well as mathematical/theoretical advances.

Tsoulfidis is not a highest quality most reliable source. Good, but he does have those chapters on Marxism and Sraffa and Post Keynesian weirdness and Austrian economics.

You guys are speculating about these agency based models. There is a huge literature on convergence to equilibrium with interdependent expectations, going back to fictitious play of von Neumann, Brown, and Robinson. Such models have been used for years for internet and vehicle traffic pricing/scheduling, for example. Some years ago, Guesnerie and Woodford and Farmer had some of the best results about adaptive expectations: Did anybody look at Guesnerie's two books, as I suggested some weeks ago?

Let me know when you try for FA status, please.  Kiefer.Wolfowitz 13:48, 8 July 2011 (UTC)

Searching through the text, I can't find what Kiefer calls "Guesnerie's two books". Anybody know? Rinconsoleao (talk) 09:34, 11 July 2011 (UTC)

• "Assessing Rational Expectations 2: Eductive stability in economics", MIT Press, 2005, 453p.
• "Assessing Rational Expectations: Sunspot multiplicity and economic fluctuations", MIT Press, 2001, 319 p. ( Kiefer.Wolfowitz 22:19, 11 July 2011 (UTC))

Kiefer's point about ACE hits home. Regardless of my hopes for ACE in the future, per WP:CRYSTAL, we probably shouldn't give it much weight in this article. LK (talk) 07:56, 11 July 2011 (UTC)

Whatever we mention about ACE should be based on its current status as one of the main alternatives in macroeconomics. While it's true that ABM modeling is not heterodox in engineering, for example, work on ACE in macroeconomics has occurred largely outside of the mainstream. And like Austrian economics, it often seems more popular among non-specialists than specialists. Nonetheless there are a lot of people working on it now (Italy, Germany, and Holland seem to be hotbeds of ACE). Just check out the program of this year's Society for Computational Economics meetings, one of the most influential and prestigious conferences on macroeconomic theory. Rinconsoleao (talk) 09:34, 11 July 2011 (UTC)

I object to including the Agency-based macro. This is an article about the history of macro, not about contemporary macroeconomics, and speculations about future directions for macro.  Kiefer.Wolfowitz 22:19, 11 July 2011 (UTC)

Your point is reasonable and I won't push beyond the consensus of other editors. But I disagree because an article on history should normally end with a description of the present state of affairs. If anyone wants to develop a paragraph on ACE here (on the talk page) for consideration for the main text, I'd be happy to help. Rinconsoleao (talk) 08:30, 12 July 2011 (UTC)

GET and RBC

There's been some debate about whether RBC has any relation to general equilibrium theory. (1) RBC theory set out from the beginning to do macroeconomic analysis on the basis of microfoundations: that is, specifying preferences, technology, and budget constraints. In that sense it does general equilibrium (a complete analysis of a fully-specified economy), even when it restricts itself to only two goods (e.g. consumption and leisure) per period. That's what a lot of people mean when they say RBC and DSGE are general equilibrium methods, and it's a complete methodological change relative to all preceding Keynesian work. There are good reasons for doing macro this way: by identifying fundamentals like preferences and technology, there is hope that one can analyze effects of policy changes without being vulnerable to the Lucas critique, and in principle one can also analyze policy changes in welfare terms. Without this sort of methodology it would be impossible to ask questions like Lucas (1987) asked: what percentage of consumption would people be willing to give up in exchange for completely eliminating macroeconomic fluctuations? Regardless of whether you think Lucas got the answer right, it makes a great deal of sense to try to build models capable of addressing questions like that. In this sense, the important point about RBC is distinguishing methodologically between general equilibrium and partial equilibrium or non-equilibrium models; how many goods are considered, and what level of generality is assumed, are separate issues. Perhaps one of the best places to look for prominent methodological quotations about these issues is Barro's undergraduate macro textbook.

(2) There are also disadvantages to doing macro this way: in order to fully specify the structure of the economy, huge simplifying assumptions were needed about the structure of the economy. Hence for example most RBC and much DSGE work is based on representative agent assumptions and very small number of goods. Also, explicit functional forms for preferences and technology were assumed (forms were chosen in order to ensure that model was consistent with trend growth-- especially lack of any clear trend in labor supply in spite of clear trend in consumption). These simplifying assumptions are therefore a huge step backwards in terms of generality, compared with Arrow-Debreu general equilibrium theory.

Finally, (3) there is one more key issue which I think has been ignored in the debate above. With idiosyncratic uncertainty and incomplete markets, the economy quickly becomes heterogeneous. Even if everyone starts identical, over time some people get rich, some get poor, etc., and then the macroeconomy no longer behaves like a representative agent. Therefore it is very, very common (though no longer universal) in RBC and DSGE models to assume that complete (and fair, costless) insurance markets exist-- in equilibrium, under the appropriate assumptions, people purchase the right amount of insurance so that their wealth remains unaffected by idiosyncratic shocks. Therefore if they all start identical, they all remain identical-- so the macroeconomy continues to behave as a representative agent. Possibly the best reference on this is Gary Hansen (JME 1985), 'Indivisible labor and the macroeconomy'; Merz (JME 1995) then extended the same methods to the context of labor matching. In this sense, Arrow-Debreu type general equilibrium theory is an essential methodological ingredient which makes representative agent modeling feasible and which therefore made early RBC and DSGE models solveable. Of course, these are precisely the sorts of simplifications for which RBC and DSGE have been so savagely criticized recently. Fortunately, they are no longer essential, and in particular DSGE models with heterogeneous agents are now increasingly common. Key references for that are Krusell and Smith (JPE 1998) and Heathcote, Storesletten and Violante (AEJ Macro 2009). Rinconsoleao (talk) 09:05, 12 July 2011 (UTC)

This is a good answer. However, isn't it true that existing heterogeneous models place a probability distribution (e.g. normal or for constrained parameters gamma or log normal) on the parameters of nice functional forms, which are usually analytic? This is a big step back from the convex-sets (with no assumptions about even differentiability) of Arrow Debreu type theories.  Kiefer.Wolfowitz 09:46, 12 July 2011 (UTC)

Specific answer: yes, as (2) makes clear above, all DSGE modeling, including new DSGE models with heterogeneous agents, are far more restrictive in terms of functional forms than Arrow-Debreu general equilibrium theory was. As for exactly how distributions are treated in DSGE models, it's a frontier research topic so there is not yet one predominant method. (E.g. Heathcote, Storesletten and Violante (AEJ Macro 2009) make convenient functional form assumptions that allow for some dimensions of heterogeneity but nonetheless maintain an analytical solution for the general equilibrium. Krusell and Smith (JPE 1998) permit arbitrary distribution of wealth but assume all prices and equilibrium variables can be written as functions of the mean or a few other statistics of that distribution. Algan, Allais, and den Haan (2009) approximate the distribution by a parameterized distributional form at all times. Reiter (JEDC 2009) and Mertens and Judd (mimeo 2011) develop perturbation methods for approximating the dynamics of the distribution under arbitrary distributional forms. Hmmm... maybe it's time to expand this comment into a Wikipedia article.) Rinconsoleao (talk) 13:16, 12 July 2011 (UTC)

Please do! :)  Kiefer.Wolfowitz 21:43, 12 July 2011 (UTC)

I will. I'm thinking of calling it Heterogeneous agents in economics, to be structured as proposed at Talk:Representative_agent. Rinconsoleao (talk) 08:41, 13 July 2011 (UTC)

First version here: Heterogeneity in economics. Comments/contributions welcomed. Rinconsoleao (talk) 11:44, 13 July 2011 (UTC)

General answer: is this a big step back? Depends what you want your model to do. What the hell can you do with an Arrow-Debreu model? You can prove welfare theorems, and thus have some overall ideas about the mechanisms that lead to efficiency or inefficiency in the economy. In a more applied direction, computable general equilibrium models continue allowing for many goods and sectors (with fairly unrestrictive preference assumptions to the best of my knowledge). Those models have proved applicable to questions like the effects of free trade agreements, where policy makers really care about sectoral details... but very little dynamics are built into models of that type. If you instead want to ask questions about optimal cyclical policy: like is it good to have strict money targeting? inflation target? interest rate rule? automatic fiscal stabilizers? what kind of unemployment benefits? then it's absurd to build a model with a whole lot of sectoral details, because the question is very very hard as it is. For questions like that you need a model that works reasonably well in describing quarterly fluctuations, which is what DSGE aims to do. But it aims to do so in a way that is (at least in principle) not subject to the Lucas critique, and where the modeler can ask how large the social welfare gains from implementing alternative policies would be. Rinconsoleao (talk) 13:28, 12 July 2011 (UTC)

Your answers were very informative, at least to me! I agree with your comments: The motivations (principal uses) of different macroeconomic models should be clearly stated, throughout the article. For example, DSGE seems like a serious improvement in short-term forecasting and certainly has conceptual advances, which use the mathematical (optimization/equilibrium) of economic theory. Could you consider writing appropriate sentences about motivations/uses throughout the article?

At some time I will try to touch up a variety of points in the article. The article is really excellent although the writing style is now so terse that I think some interconnections are lost. By the way, I make a number of comments about the different purposes and various strengths and weaknesses of different modeling strategies at Macroeconomic model. Rinconsoleao (talk) 08:51, 13 July 2011 (UTC)

However, for a country like Sweden, the labor-supply schedule still has kinks (and even discontinuities and violations of monotonicity); given the share of income in the GDP (roughly 70%?), it is important to remember the crudity of the approximations used in DSGE.

The article previously repeated some claims (by "authorities") that RBC was based on Arrow-Debreu GE theory. Your comments indicate the invalidity or crudity of such claims. Can we agree that "Arrow-Debreu" should be avoided, and that "general equilibrium" refers to GET of Walrasian-Samuelsonian vintage (and perhaps that this distinction should be spelled out ...?)?

Thanks again for your thoughts

My point (1) claims that RBC is based on GET in a general sense. My point (3) claims that RBC is based on Arrow-Debreu's framework in a precise sense: complete contingent claims markets play a crucial technical role in the solution of many RBC and DGSE models. So I partly disagree with you. Nonetheless, there is no urgent need to say 'Arrow Debreu' unless there is some point in the text where we are specifically referring to the role of complete markets assumption in RBC/DSGE. Rinconsoleao (talk) 08:46, 13 July 2011 (UTC)

I too, want to extend my thanks for this very interesting back and forth. I had vaguely known of the topics you touch on, but the specificity and details are very informative. As an aside, about what can you do with an Arrow-Debreu model, as the theory of the second best and the work of Stiglitz have shown, even the welfare theorems aren't practically useful, i.e. they tell you something about a theoretical world that can't possibly exist. That's not to say I have any love for DSGE modelling, my (completely amateur) thoughts on it are here. LK (talk) 03:07, 18 July 2011 (UTC)

I appreciate the good will and efforts to write a true article, rather than one repeating errors by authorities. Please examine American Left for a bad example of assuming "bad faith" and personal attacks!  Kiefer.Wolfowitz 16:08, 18 July 2011 (UTC)

RE Incomplete markets

 Kiefer.Wolfowitz 07:58, 14 July 2011 (UTC) Several times, incomplete markets have been mentioned. Maybe parts of the following could be useful?

Non-convexities occur also with information economics, and with stock markets (and other incomplete markets). Such applications continued to motivate economists to study non-convex sets.

Marginalization of Austrians?

How can a Nobel Laurate be a maringalized contributor to econ thought??!! Has POV been the motivation behind the intro paragraph?--S. Rich (talk) 06:47, 26 August 2011 (UTC)06:48, 26 August 2011 (UTC)

Read George Stigler's criticism of Hayek etc.

 Kiefer.Wolfowitz 15:54, 2 December 2011 (UTC)

Could we have a title or a ref for this? -- Jo3sampl (talk) 03:34, 6 December 2011 (UTC)

You can check out Krugman's post on Hayek's signifiance: http://krugman.blogs.nytimes.com/2011/12/05/things-that-never-happened-in-the-history-of-macroeconomics/. The simple fact is that Hayek's work, especially his macro work, hasn't been influential in decades. No mainstream economist uses ABC theory in his models. You have only a few people at a few universities (Auburn and George Mason) doing related work. Ergo, he is marginalized.--Bkwillwm (talk) 06:05, 12 February 2012 (UTC)

"The selection of sympathetic writers ... is in fact a general practice in Palgrave II. Israel Kirzner's essay on the Austrian economists does not hint at the existence of error, misrepresentation of critics, or tasteless attacks upon the German Historical School, and Klaus Henning did little better with Böhm-Bawerk. An ersatz Austrian is apparently more loyal than the genuine article." (Italics added)

• Stigler (1988, p. 1732)
• Stigler, George J. (1988). "Palgrave's Dictionary of Economics". Journal of Economic Literature. 26 (4). American Economic Association: 1729–1736. JSTOR 2726859. {{cite journal}}: Invalid |ref=harv (help); Unknown parameter |month= ignored (help)

Article updates

I'm trying to get this article cleaned up again. I took the liberty of removing many of the dispute templates. If there's still a dispute they can be added again. I considered the undue weight section in the heterodox section resolved by consensus. There was talk discussion that favored keeping the section in the article. [Another user had removed the template before, declaring consensus http://en.wikipedia.org/w/index.php?title=History_of_macroeconomic_thought&diff=438242424&oldid=438150223], but it was added again. The section now has multiple sources, so I removed the "one source" template. I removed the "global view" template since there is now more on disequilibrium. I removed the unreliable source template because I believe Dindo qualifies as a published dissertation. I also added another source that backs up the statement, but I think Dindo's treatment was clear, so he deserves a reference. I removed a potentially POV statement from the new synthesis section, and then removed the template. I stripped out much of the real business cycle issue. I don't think Larry Summer's views of RBC models in 1986 are relevant. Especially his specific criticisms, and putting these criticisms in bulleted format made the section ridiculous. I know there's been some dispute on the use of "general equilibrium," but I've found over a dozen citations that support this view, so I think the term should stay. I am working on expanding more into methodological changes, handling some other issues, and then putting this out for review.--Bkwillwm (talk) 06:16, 12 February 2012 (UTC)

Hahn and Solow

I recently removed two of the references to the work of Hahn and Solow in the article. I actually got my hands on a copy of one of the works that was cited (A Critical Essay on Modern Macroeconomic Theory). The article had previously indicated that Hahn and Solow had argued tat RBC models were not actually based on/consistent with general equilibrium theory (particularly "Arrow-Debreu" general equilibrium). Reading just the introduction to the book makes it clear this is not true. Hahn and Solow argue that RBC models are based on general equilibrium theory, and they specifically mention Arrow-Debreu as a basis for these models (page 2). The two primary arguments Hahn and Solow make are that new classical economics and RBC models choose the wrong microfoundations (perfect competition, single rational agent, etc.) and that macro models based only on aggregated micro theory miss out on phenomena that occur at the aggregate level. I'm going to add some of their commentary to relevant sections, but I hope we can get past the GET and Arrow-Debreu arguments. I haven't accessed all of the sources that were previously mentioned, but it's clear that this one, which is the most recently published, makes it clear the Hahn and Solow would have no problem saying that RBC models have Arrow-Debreu foundations.--Bkwillwm (talk) 04:08, 27 February 2012 (UTC)

I am familiar with Hahn's three earlier MIT books, one being a green monograph and the other two being collected essays. In those books, he criticizes the claims of Lucas et alia of being based on Arrow-Debreu general equilibrium theory. I apologize for being sloppy with Hahn and Solow, apparently.  Kiefer.Wolfowitz 07:20, 27 February 2012 (UTC)

GA Review

This review is transcluded from Talk:History of macroeconomic thought/GA1. The edit link for this section can be used to add comments to the review.

Reviewer: Jarry1250 (talk · contribs) 00:36, 26 February 2013 (UTC)

Initial comments: Okay, so before I start this review, I should make it clear that I am only a student of economics, rather than a practitioner (or indeed graduate). I justify my review on two grounds, then: (1) because they aren't many highly trained economists willing to review articles; and (2) because, as shall become clear, I do not feel that this is going to be a particular contentious review. Clearly, the article is of a high quality. The question is more: what weaknesses does the article have? I shall focus my review on the "below the surface" features of image tagging quality and use of sources for this reason.

GA review (see here for what the criteria are, and here for what they are not)

1. It is reasonably well written.

   a (prose): b (MoS for lead, layout, word choice, fiction, and lists):

   The prose is of an acceptable quality, though the style is considerably in advance of the accuracy. Contributors to the article should consider reading it through; the mistakes are not difficult to find. As I say, however, the prose is sufficiently good for the GA level and all major Manual of Style points are met.

2. It is factually accurate and verifiable.

   a (reference section): b (citations to reliable sources): c (OR):

   2(a) There is a reference section; 2(c) everything is cited, rather nicely. I shall return later to 2(b); for the moment, it will suffice to note that a cursory examination of the source list reads impressively. Many if not all of the sources, assuming they are well-used, are not just reliable, but also of a high quality.

   Okay, spot-checks. Cite #173/4: yes. #118: Iffy, but probably acceptable (source is cautious in suggesting empirics alone were the driving factor). #190: Fine. Other sources: all sound plausible given my knowledge of macroeconomic thought.

3. It is broad in its coverage.

   a (major aspects): b (focused):

   This article has everything one would expect from a primer on (modern) macroeconomic thought, including Keynesianism, neo-classical economics, the Lucas critique, etc. It is highly commendable in that regard and I have no problem passing it.

   One suggestion for addition is a clearer statement about the theoretical underpinnings of the real economy in neoclassical economics, i.e. that is a function of the factors of production (presumably land, labour and capital at that time) and their use. This also shows up in the lack of an (old) growth theory section, old growth theory being trivially derivable from that assertion; the new growth theory is a little lost as a result. It also means that quite a few people who should get name checked in the origins section don't.

   If that expansion did not appeal, perhaps the best thing to do would be to move the article to History of modern macroeconomic thought?

   A clearer distinction between forms of the Phillips Curve (original, adaptive-expectations-augmented, rational-expectations-augmented) would also be a "nice to have" in that section.

   Finally, I agree with Kiefer's suggestion at RFC that the development of econometrics could be included.

4. It follows the neutral point of view policy.

   Fair representation without bias:

   It is impossible to discern a bias in all the prose that I have read in detail (i.e. virtually all of the article). This is particularly commendable given the nature of the arguments involved.

5. It is stable.

   No edit wars, etc.:

   Stable.

6. It is illustrated by images and other media, where possible and appropriate.

   a (images are tagged and non-free content have fair use rationales): b (appropriate use with suitable captions):

   Image use is good (you even used one of mine!), though I had to fix one description.

7. Overall:

   Pass/Fail:

   Will finish the review tomorrow. - Jarry1250 ^{[Vacation needed]} 00:36, 26 February 2013 (UTC)

   There are clear avenues here for possible improvement which the contributors to the article should explore. Nevertheless, the actual Good Article criteria are relatively undemanding, and, as such, I am obliged to pass the article. - Jarry1250 ^{[Vacation needed]} 19:58, 26 February 2013 (UTC)

1) Thanks for reviewing--and passing--this article. I'd like to improve it further and get it up to featured status, so I would appreciate more feedback. What do you mean "though the style is considerably in advance of the accuracy"? Not sure what that means.

2)I'll cleanup 118.

3) Do you think an old growth section should be added? I considered adding one in "Keynes's successors."

I don't think the "modern" qualifier is needed. Sources tend to agree that macro proper begins with Keynes, and I think this article does a good job covering precursors. Which economists do you think are missing from the origins section?

Will work on Phillips curve section.

This is a theory article, which means empirical work is tangential. It already has more on empirical work than the sources it's based on. What specifically should be added regarding econometrics?--Bkwillwm (talk) 03:29, 27 February 2013 (UTC)