Old views and new perspectives: on reading Hick's ‘Mr. Keynes and the Classics’ *

This paper discusses the different macroeconomic models presented in Hicks's seminal 1937 article on the IS-LM (or SI-LL) approach. Hicks's treatment of the supply side Keynes's reaction to the different SI-LL models later developments of SI-LL by Hicks and his comments on the construction of SI-LL are discussed. It is argued that one of the different SI-LL models does indeed represent a faithful rendition of the analytical core of Keynes's General Theory and does belong more to the Marshall-Pigou-Keynes tradition than to a Walrasian tradition. Textbook IS-LM (and AS-AD) models are compared to the original SI-LL models. It is argued that textbook IS-LM is decisively different from the SI-LL approach this difference being the cause of presently discussed problems and obscurities of the textbook IS-LM/AS-AD approach.     

Technological innovation and long wave theory: Two pieces of the puzzle

Since the 1930s, there have been few attempts to recast long wave theory and address the problems raised by Schumpeter's and Kuznets' models; most work has been empirical. This paper uses an inter-industrial analytical framework to explain stagnation, downswing and recovery. The proposed rationale enables us to dispense with Schumpeter's hypothesis of periodic bunching of radical innovations.Paper presented at the Schumpeter Society Meetings held at Airlie House, Virginia, June 3, 1990. I want to thank Alfred Kleinknecht and Wolfgang Stolper for comments then. This basic model was presented for the first time in the summer of 1979 at TIMS-OSRA in Honolulu at the invitation of Bela Gold, then in a leçon au Collège de France, June 9, 1986 at the invitation of the late François Perroux, when I benefited from his comments and those of Jean Weiller. In 1989, it was presented at the University of Sherbrooke, where I benefited from Petr Hanel's comments, and at the Société canadienne de sciences économiques. I have also benefited from four anonymous reviewers' comments and advice. I thank Daniel Winer for editing.     

A derivation of the IS-LM model from explicit optimizing behavior

A general equilibrium analysis which closely resembles the ad hoc IS-LM model of traditional macroeconomics is derived from explicit optimizing behavior in an overlapping generations model in which individuals have finite lives and generations are not linked by the bequest motive. Therefore tax finance and bond finance are not equivalent, and the conventional analysis of open-market operations, and bond-financed changes in government spending and in current taxes require the changes in expected future taxes to be fully specified. These fully specified policy changes are analyzed under rational expectations.     

Wealth effects,IS-LM stability and the efficacy of economic policies

This paper considers the efficacy of macroeconomic policies in an extended Cebula-Wang IS-LM framework integrating wealth effects. We argue that an increase in money stock need not lead to a contraction of national income and bond-financed fiscal policy magnifies the positive impact on national income. In addition, money-financed fincal policy may have any effect on the level of income.     

A clarification of the IS curve and the aggregate demand curve

This paper clarifies the current textbook interpretations of the IS curve and the aggregate demand (AD) curve. Most macroeconomic textbooks portray the IS curve as representing equilibrium in the product, goods, or commodity market. This paper illustrates that in flexible-price models the IS curve does not necessarily portray equilibrium in the goods market because the textbooks introduce two contradictory notions of equilibrium. Furthermore, it will be shown that, contrary to popular textbook usage, the AD curve, which is derived from the IS-LM framework, is not the economy's effective demand curve for goods.     

Supply,wealth effects,negative multipliers,and stability

This paper is concerned with the Blinder-Solow contention that negative government expenditures multipliers are trivial inasmuch as the resulting equilibrium is unstable in a conventional IS-LM model with constant prices. An aggregate supply side, which features progressive taxation of labor income and a real balances effect in the labor supply equation, is added to the model, and it is shown that negative multipliers are not necessarily inconsistent with local asympototic stability.     

A Sraffian interpretation of classical monetary controversies

Abstract

The aim of this paper is to explore the contrasting views of inflation, exchange rate misalignments and determinants of gold flows held by different branches of the classical school during the first half of the nineteenth century. The properties of money neutrality and money endogeneity within the classical system are studied by reinterpreting these controversies through the analytical framework of the surplus approach as reconstructed by Sraffa [Production of Commodities by Means of Commodities. Cambridge: Cambridge University Press, 1960] and his followers.     

公羊学家孟光

三国时期征伐战争不断，但在这种动荡的时局下，魏蜀吴三地仍涌现出许多著名的经学思想家。在众多左氏经学思想家中，孟光作为一名公羊经学家显得格外特别。《三国志》中有关孟光的记述不多但形象鲜明。具体表现在他对当时蜀汉政事见解独到，对公羊经学的喜爱以及敢于直言的个性，这些都与公羊经学思想有一定的联系。从孟光身上，能看到一位公羊经学思想家对政治的分析能力，但也能发现由于它的直言使自己政治抱负得不到施展，实在是一种遗憾。     

Say's involvement in the 1819 French edition of Ricardo's Principles and the issue of rent

This paper focuses on Say's contribution to the first French edition of Ricardo's Principles and on the analytical consequences of his involvement on the issue of rent. Part one investigates the “story” of this edition. It stresses Say's friendship with the translator, his involvement in this publication and his attitude toward Ricardo. Part two analyses how elements from Say's thought were introduced into Ricardo's theory of rent through this edition. These elements conveyed ideas which were definitely at odds with Ricardo's theory and misrepresented Ricardo's true concept of differential rent which was central to his theory.     

马克思主义政治经济学理论体系的经典引证

马克思主义经典著作是一个整体,研究马克思主义经济学不应只限于《资本论》,应该从《共产党宣言》开始,到《〈政治经济学批判〉导言》,到《资本论》,再到《反杜林论》。马克思恩格斯为其著作写的序言及其书评,是学习马克思主义经典著作不能忽视的内容,许多深刻含义、写作意图、研究方法都是通过这些"序言"和"书评"揭示出来的。马克思完成的著作基本只是"狭义政治经济学",但从马克思主义经典著作的体系看,马克思主义经济学的理论体系是"广义政治经济学"。     

Secession Clauses: A Tool for the Taming of an Arising Leviathan in Brussels?

Several scholars have recently come out in support of the argument by James Buchanan that each member state of the European Union be given the right to secede from the EU. According to these scholars, a simple majority ought to be sufficient for secession, since this would help check the tendency of EU institutions to increase their power against the will of both member states and individuals. This paper, however, argues that while secession may be a means to increase individual liberty vis-a-vis a central government, it may also be abused by a majority in order to oppress the minority of the respective jurisdiction's inhabitants. Since in a federation different government levels check each others' power, thereby enhancing individual freedom, secession removes one of these governmental levels and, hence, distorts the existing system of checks and balances. This paper argues that such a drastic step has the character of a constitutional act and thus should be decided on under rules reserved for post constitutional legislation.     

Distribution,effective demand,and the orthodox macromodel

The ordinary IS-LM framework is revised to incorporate macro-distributional considerations. This permits us to cast a new light on Keynes' theoretical refutation of the usefulness of cutting money wages in the midst of a depression in a comparative statics context. We demonstrate that a generalized cut in money wages under conditions of complete price flexibility and perfect competition (marginal product factor pricing) can lower the volume of employment. This version of the orthodox macromodel also provides a potential handle on such seemingly elusive concepts as Keynes' notions of full employment and under-employment equilibrium.     

Inside and outside fiat money, gains to trade, and IS-LM

Summary. We build a one-period general equilibrium model with money. Equilibrium exists, and fiat money has positive value, as long as the ratio of outside money to inside money is less than the gains to trade available at autarky. We show that the nominal effects of government fiscal and monetary policy can be completely described by a diagram identical in form to the IS-LM curves introduced by Hicks to describe Keynes' general theory. IS-LM analysis is thus not incompatible with full market clearing, multiple commodities, and heterogeneous households. We show that as the government deficit approaches a finite threshold, hyperinflation sets in (prices converge to infinity and real trade collapses). At the other extreme, if the government surplus is too large, the economy enters a liquidity trap in which nominal GNP sinks and monetary policy is ineffectual. Received: January 2, 2002; revised version: April 8, 2002 Correspondence to: P. Dubey     

Monetary policy in the BOF3 quarterly model of the Finnish economy

This paper describes the modelling of monetary policy in BOF3, a quarterly econometric model of Finland built at the Research Department of the Bank of Finland. BOF3 is a 198-equation, ‘amended Keynesian’ model which is used regularly in policy analysis and forecasting at the Bank. The modelling of the Finnish monetary sector has been complicated by the fact that most interest rates applied by the banks have so far been institutionally regulated. In spite of this, model builders have attempted to follow the conventional IS-LM approach as closely as possible, assuming that interest rates equilibrate financial markets outside the banking sector. The reported simulation experiments describe the effects of a change in nomical interest rates, of a change in the domestic money supply, and of a fiscal stimulus with and without monetary accomodation.     

Consumption choice and asset pricing with a non-price-taking agent

Summary. This paper develops a pure-exchange model to study the consumption-portfolio problem of an agent who acts as a non-price-taker, and to analyze the implications of his behavior on equilibrium security prices. The non-price-taker is modeled as a price leader in all markets; his price impact is then recast as a dependence of the Arrow-Debreu prices on his consumption, allowing a tractable formulation. Besides the aggregate consumption, the endowment of the non-price-taker appears as an additional factor in driving equilibrium allocations and prices. Comparisons of equilibria between a price-taking and a non-price-taking economy are carried out. Received: March 29, 1996; revised version October 29, 1996     

From the Encyclopédie to the Tableau économique : Quesnay on freedom of grain trade and economic growth

This paper investigates the evolution of Quesnay's economic thought between his Encyclopédie articles and the first edition of the Tableau économique. The rediscovery of a forgotten piece Quesnay included in an agricultural treatise — the Essai sur l'amélioration des terres — leads us to reconsider the origins of the first edition of the Tableau. This forgotten piece of writing is the missing link between Quesnay's first economic writings and the Tableau. It improves on the theory of grain trade liberalization Quesnay presented in his first writings on two levels. First, it reconstructs of his previous argument in order to give it a more coherent shape. Second, this text complements the Encyclopédie articles by a growth mechanism. Through a reconstruction of Quesnay's growth mechanism, we show that his argument is a significant analytical step toward the first edition of the Tableau.     

The Dynamic Interactions Between the Phillips Relation and the IS-LM Model*

In this paper the IS-LM model is extended dynamically by the addition of a price-adjustment relation (the Phillips relation) and a quantity-adjustment relation. Three specifications of the Phillips relation are considered. It is shown that the nature of the price-adjustment process has important implications for stability; in fact the price-adjustment processes which yield clockwise (counter-clockwise) Phillips loops may also be unstable (are not unstable). On the other hand, the speed of the price-adjustment process is not relevant for stability. The speed of quantity adjustment is only important in the expectations case and there the slower the speed of adjustment the more likely is instability. No clear conclusions emerge, in general, concerning the slopes of the IS-LM relations and stability. In conclusion the results are related to the debate on the micro-foundations of Keynesian economics.     

The Bourdieusian Conception of Social Capital: A Methodological Reflection and Application

This paper is on social capital and the meaning that Bourdieu has given to this concept in his Notes provisoires, published in 1980. He considered social capital as one of the most important forms of capital, along with economic capital and cultural capital. Even though he did not propose an explicit measure of social capital, so it remained in a conceptual state, he promoted an innovative research programme. Our contribution is to propose a generic method to empirically measure and test hypotheses on social capital, based on Bourdieu's work. We aim at creating an analytical framework that places this concept at the centre of the Bourdieusian theoretical approach. For this purpose, we combine two sociological tools that relate to two different sociological traditions, namely social network analysis and multiple correspondence analyses. Thus, our paper describes the ways to combine field and network analyses, and illustrates this with an empirical study.     

开放经济条件下货币政策分析框架的选择

作为封闭经济条件下IS-LM模型和IS-LM-AS模型在开放经济中的拓展,M-F模型和M-F-D模型成为20世纪60—90年代开放经济宏观经济分析的工作母机。在研究开放经济中的货币问题时,M-F和M-F-D模型由于其简单明了、易于处理等优点,仍然是优先的分析工具选择。而作为M-F和M-F-D模型的新近发展,新开放经济宏观经济学框架在目前来说还难以运用于转型经济的货币政策研究。     

International Migration,remittances and income distribution in the source country: a synthesis

The paper explores, under a wide variety of circumstances, the welfare impact of emigration. The analytical framework posited is a simple two-factor, two-commodity, two-class general equilibrium model that makes a distinction between traded and non-traded goods. The principal aim is to collect and synthesize the well-known results in the literature, derived from diverse analytical frameworks, as well as to establish a number of new ones. It is shown that pure emigration can be beneficial to the non-emigrants in the source country, irrespective of the welfare criteria adopted, if accompanied by sufficient remittances. The paper also highlights the fact that emigation does not affect all classes in society symmetrically. The division of losers and gainers depends on the volume of remittances, the distribution of factor endowments and the type of emigration.