Pub Date : 2022-01-02DOI: 10.1080/1350178X.2022.2033811
Pierrick Clerc, Rodolphe Dos Santos Ferreira
ABSTRACT This paper highlights the renewed interest in Lucas’s explanation of the non-neutrality of money put forward in his 1972 article – explanation based on information dispersion and signal extraction problems – by an increasing part of the literature investigating the transmission mechanism of monetary policy shocks. We review the main contributions to this renewal, and illustrate the relationship between this work and Lucas’s own model. We also show that some of the assumptions made by this line of research have been questioned by subsequent developments on the same track, thereby challenging its ability to produce large amounts of monetary non-neutrality and calling for further research.
{"title":"Dispersed information and the non-neutrality of money: fifty years after Lucas, 1972","authors":"Pierrick Clerc, Rodolphe Dos Santos Ferreira","doi":"10.1080/1350178X.2022.2033811","DOIUrl":"https://doi.org/10.1080/1350178X.2022.2033811","url":null,"abstract":"ABSTRACT This paper highlights the renewed interest in Lucas’s explanation of the non-neutrality of money put forward in his 1972 article – explanation based on information dispersion and signal extraction problems – by an increasing part of the literature investigating the transmission mechanism of monetary policy shocks. We review the main contributions to this renewal, and illustrate the relationship between this work and Lucas’s own model. We also show that some of the assumptions made by this line of research have been questioned by subsequent developments on the same track, thereby challenging its ability to produce large amounts of monetary non-neutrality and calling for further research.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76732857","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-02DOI: 10.1080/1350178X.2022.2032272
H. Uhlig
ABSTRACT This paper is an overview from a personal perspective on the various ways Lucas has shaped today’s economics in general and in terms of ‘Chicago economics’ in particular. In honor of the 50th anniversary of its publication, much focus is given to his 1972 neutrality paper and its impact. I discuss how the paper was a trigger of the subsequent emergence of rational expectations macroeconomics. Further, I touch upon his fundamental contributions to growth theory, asset pricing and the characteristic use of the Bellman equations. After covering these topics, the paper concludes with a portrayal of the Money and Banking Workshop to describe the environment that Lucas established at the Chicago department, and to illustrate his enduring influence on the culture of teaching and discussing macroeconomics at the University of Chicago.
{"title":"The lasting influence of Robert E. Lucas on Chicago economics","authors":"H. Uhlig","doi":"10.1080/1350178X.2022.2032272","DOIUrl":"https://doi.org/10.1080/1350178X.2022.2032272","url":null,"abstract":"ABSTRACT This paper is an overview from a personal perspective on the various ways Lucas has shaped today’s economics in general and in terms of ‘Chicago economics’ in particular. In honor of the 50th anniversary of its publication, much focus is given to his 1972 neutrality paper and its impact. I discuss how the paper was a trigger of the subsequent emergence of rational expectations macroeconomics. Further, I touch upon his fundamental contributions to growth theory, asset pricing and the characteristic use of the Bellman equations. After covering these topics, the paper concludes with a portrayal of the Money and Banking Workshop to describe the environment that Lucas established at the Chicago department, and to illustrate his enduring influence on the culture of teaching and discussing macroeconomics at the University of Chicago.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89522174","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-29DOI: 10.1080/1350178X.2021.2019818
Max Gillman
ABSTRACT The paper describes how Robert E. Lucas, Jr.’s monetary economies are based on his methodology of using a single general equilibrium dynamic optimization model with microeconomic foundations that can be tested with econometric methods. It shows how, since his 1972 neutrality paper, Phillips curves continue to be a foundation for policy prescription contrary to Lucas’s 1972 results. In support of Lucas’s hypothesis, historical Phillips curves are shown to be idiosyncratic rather than a basis for policy. Using Lucas’s alternative microfounded approaches to money, growth, and asset pricing, the paper then presents Lucas-type extensions for money and growth using a microfounded bank production of exchange credit as an alternative to money, as suggested by Lucas. The paper also shows how this leads to endogenous velocity, money causing inflation, and inflation causing lower economic growth, as in evidence. This implies that Lucas-based low stable inflation policy yields high economic growth and employment.
{"title":"Lucas’s methodological divide in inflation theory: a student’s journey","authors":"Max Gillman","doi":"10.1080/1350178X.2021.2019818","DOIUrl":"https://doi.org/10.1080/1350178X.2021.2019818","url":null,"abstract":"ABSTRACT The paper describes how Robert E. Lucas, Jr.’s monetary economies are based on his methodology of using a single general equilibrium dynamic optimization model with microeconomic foundations that can be tested with econometric methods. It shows how, since his 1972 neutrality paper, Phillips curves continue to be a foundation for policy prescription contrary to Lucas’s 1972 results. In support of Lucas’s hypothesis, historical Phillips curves are shown to be idiosyncratic rather than a basis for policy. Using Lucas’s alternative microfounded approaches to money, growth, and asset pricing, the paper then presents Lucas-type extensions for money and growth using a microfounded bank production of exchange credit as an alternative to money, as suggested by Lucas. The paper also shows how this leads to endogenous velocity, money causing inflation, and inflation causing lower economic growth, as in evidence. This implies that Lucas-based low stable inflation policy yields high economic growth and employment.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2021-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77958841","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-27DOI: 10.1080/1350178X.2021.2019963
H. Chao
macro-level causal relations forming the structure in the object-oriented ontologies root in properties of entities — as far as the microfoundations project is concerned, mainly in the properties of agents and other irreducible entities. Thus if one is interested in a (partial) analysis of real causal mechanisms, she needs to postulate some causal entity properties that are active in terms of the relations she wishes to represent. Reality thus cuts in. Macro-structures and hence their representations cannot be independent of the underlying properties of entities, of the properties that carry the causal connections. As a consequence, assumptions de fi ning theoretical agents and other entities must be adequate as for the represented causal connections. Thus the question if a model is capable of providing an adequate causal analysis on the chosen facet of reality boils down to the question of the adequacy of the postulated entity properties. It may be possible that the features of Lucas ’ s highly abstract entities support sound
{"title":"It takes a model to beat a model","authors":"H. Chao","doi":"10.1080/1350178X.2021.2019963","DOIUrl":"https://doi.org/10.1080/1350178X.2021.2019963","url":null,"abstract":"macro-level causal relations forming the structure in the object-oriented ontologies root in properties of entities — as far as the microfoundations project is concerned, mainly in the properties of agents and other irreducible entities. Thus if one is interested in a (partial) analysis of real causal mechanisms, she needs to postulate some causal entity properties that are active in terms of the relations she wishes to represent. Reality thus cuts in. Macro-structures and hence their representations cannot be independent of the underlying properties of entities, of the properties that carry the causal connections. As a consequence, assumptions de fi ning theoretical agents and other entities must be adequate as for the represented causal connections. Thus the question if a model is capable of providing an adequate causal analysis on the chosen facet of reality boils down to the question of the adequacy of the postulated entity properties. It may be possible that the features of Lucas ’ s highly abstract entities support sound","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2021-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89668197","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-16DOI: 10.1080/1350178X.2021.2010282
Sheila Dow
ABSTRACT Kevin Hoover explores retroduction as a means of theorizing in macro-economics, rather than exclusive reliance on deductivism or inductivism. Retroduction is discussed as involving conceptualization with respect to empirical evidence as a means of identifying causal mechanisms as the basis for theory in the form of mathematical models. It is put forward as a preferred alternative to more fundamental reform of macro-economics, whose justification Hoover dismisses as being ‘ideological’. Yet ideology refers to a position on metaphysics such as Hoover himself sets out in terms of open systems, which would significantly extend the scope for retroduction.
{"title":"A deeper struggle for the soul of economics","authors":"Sheila Dow","doi":"10.1080/1350178X.2021.2010282","DOIUrl":"https://doi.org/10.1080/1350178X.2021.2010282","url":null,"abstract":"ABSTRACT\u0000 Kevin Hoover explores retroduction as a means of theorizing in macro-economics, rather than exclusive reliance on deductivism or inductivism. Retroduction is discussed as involving conceptualization with respect to empirical evidence as a means of identifying causal mechanisms as the basis for theory in the form of mathematical models. It is put forward as a preferred alternative to more fundamental reform of macro-economics, whose justification Hoover dismisses as being ‘ideological’. Yet ideology refers to a position on metaphysics such as Hoover himself sets out in terms of open systems, which would significantly extend the scope for retroduction.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2021-12-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73985888","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-01DOI: 10.1080/1350178X.2021.2010281
K. Hoover
ABSTRACT Critics argued that the 2007–09 financial crisis was failure of macroeconomics, locating its source in the dynamic, stochastic general-equilibrium model and calling for fundamental re-orientation of the field. Critics exaggerated the role of DSGE models in actual policymaking, and DSGE modelers addressed some criticisms within the DSGE framework. But DSGE modelers oversold their success and even claimed that their approach is the sine qua non of competent macroeconomics. The DSGE modelers and their critics renew an old debate over the relative priority of a priori theory and empirical data, classically exemplified in the Measurement without Theory Debate of the 1940s between the Cowles Commission and the National Bureau of Economic Research. The earlier debate is reviewed for its implications for the recent controversy. In adopting the Cowles-Commission position, some DSGE modelers would essentially straight-jacket macroeconomics and undermine economic science and the pursuit of knowledge in an open-minded, yet critical framework.
{"title":"The struggle for the soul of macroeconomics","authors":"K. Hoover","doi":"10.1080/1350178X.2021.2010281","DOIUrl":"https://doi.org/10.1080/1350178X.2021.2010281","url":null,"abstract":"ABSTRACT Critics argued that the 2007–09 financial crisis was failure of macroeconomics, locating its source in the dynamic, stochastic general-equilibrium model and calling for fundamental re-orientation of the field. Critics exaggerated the role of DSGE models in actual policymaking, and DSGE modelers addressed some criticisms within the DSGE framework. But DSGE modelers oversold their success and even claimed that their approach is the sine qua non of competent macroeconomics. The DSGE modelers and their critics renew an old debate over the relative priority of a priori theory and empirical data, classically exemplified in the Measurement without Theory Debate of the 1940s between the Cowles Commission and the National Bureau of Economic Research. The earlier debate is reviewed for its implications for the recent controversy. In adopting the Cowles-Commission position, some DSGE modelers would essentially straight-jacket macroeconomics and undermine economic science and the pursuit of knowledge in an open-minded, yet critical framework.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2021-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82370792","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-25DOI: 10.1080/1350178X.2021.2006998
Aki Lehtinen
ABSTRACT A review of Donald Katzner's book on economic modelling is provided. In addition to characterising the book, I give critical comments on the distinction between primary and secondary assumptions.
{"title":"A review on Katzner’s Models, mathematics and methodology in economic explanation, Cambridge University Press 2018","authors":"Aki Lehtinen","doi":"10.1080/1350178X.2021.2006998","DOIUrl":"https://doi.org/10.1080/1350178X.2021.2006998","url":null,"abstract":"ABSTRACT A review of Donald Katzner's book on economic modelling is provided. In addition to characterising the book, I give critical comments on the distinction between primary and secondary assumptions.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2021-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89004909","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-24DOI: 10.1080/1350178x.2021.1993308
Geoffrey Brennan, H. Kliemt
Starting from a behavioural-economics critique of standard rational choice theory Sugden seeks to restate the case for classical liberalism. That case has three strands: a refutation of libertarian paternalism; a restatement of standard welfare theorems of economics in terms of opportunity sets; and underlining the role that ‘exchange’ plays in supporting civil liberal society. We explore questions about Sugden’s arguments in connection to all three strands and to relevant pieces of Adam Smith and James Buchanan to which Sugden appeals. Without substantive assumptions Sugden either adopts a view from nowhere or has to implicitly rely on non-negotiable interpersonal respect norms. ARTICLE HISTORY Received 21 July 2021 Accepted 11 October 2021
{"title":"Sugden’s community of advantage","authors":"Geoffrey Brennan, H. Kliemt","doi":"10.1080/1350178x.2021.1993308","DOIUrl":"https://doi.org/10.1080/1350178x.2021.1993308","url":null,"abstract":"Starting from a behavioural-economics critique of standard rational choice theory Sugden seeks to restate the case for classical liberalism. That case has three strands: a refutation of libertarian paternalism; a restatement of standard welfare theorems of economics in terms of opportunity sets; and underlining the role that ‘exchange’ plays in supporting civil liberal society. We explore questions about Sugden’s arguments in connection to all three strands and to relevant pieces of Adam Smith and James Buchanan to which Sugden appeals. Without substantive assumptions Sugden either adopts a view from nowhere or has to implicitly rely on non-negotiable interpersonal respect norms. ARTICLE HISTORY Received 21 July 2021 Accepted 11 October 2021","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2021-11-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90541400","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-11DOI: 10.1080/1350178X.2021.1993307
T. Sargent
ABSTRACT This paper recollects meetings with Robert E. Lucas, Jr. over many years. It describes how, through personal interactions and studying his work, Lucas taught me to think about economics.
{"title":"Learning from Lucas","authors":"T. Sargent","doi":"10.1080/1350178X.2021.1993307","DOIUrl":"https://doi.org/10.1080/1350178X.2021.1993307","url":null,"abstract":"ABSTRACT This paper recollects meetings with Robert E. Lucas, Jr. over many years. It describes how, through personal interactions and studying his work, Lucas taught me to think about economics.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2021-11-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74306235","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-08DOI: 10.1080/1350178X.2021.1993306
Peter Galbács
ABSTRACT This introductory paper offers a look into the intellectual and technical progress that led Robert E. Lucas to his seminal paper entitled Expectations and the neutrality of money. It is argued that the neutrality paper applies the capital-theoretic approach of Lucas’s firm microeconomics of the mid-1960s to the representative agent’s labour supply decision. While emphasizing this similarity, the study gives an overview of the steps through which Lucas changed the basic decision problem of adjusting to price changes from a static Marshallian setting into his neo-Walrasian dynamic stochastic general equilibrium framework. Extensive references to Lucas’s unpublished materials underpin the claims.
本文介绍了罗伯特·e·卢卡斯(Robert E. Lucas)的开创性论文《期望与货币中立性》(Expectations and neutral of money)，正是在这些知识和技术进步的推动下，卢卡斯才写出了这篇论文。本文将20世纪60年代中期卢卡斯企业微观经济学的资本理论方法应用于代表性代理人的劳动力供给决策。在强调这种相似性的同时，该研究概述了卢卡斯将调整价格变化的基本决策问题从静态马歇尔设定转变为新瓦尔拉斯动态随机一般均衡框架的步骤。大量引用卢卡斯未发表的材料支持了这一说法。
{"title":"Lucas’s way to his monetary theory of large-scale fluctuations","authors":"Peter Galbács","doi":"10.1080/1350178X.2021.1993306","DOIUrl":"https://doi.org/10.1080/1350178X.2021.1993306","url":null,"abstract":"ABSTRACT This introductory paper offers a look into the intellectual and technical progress that led Robert E. Lucas to his seminal paper entitled Expectations and the neutrality of money. It is argued that the neutrality paper applies the capital-theoretic approach of Lucas’s firm microeconomics of the mid-1960s to the representative agent’s labour supply decision. While emphasizing this similarity, the study gives an overview of the steps through which Lucas changed the basic decision problem of adjusting to price changes from a static Marshallian setting into his neo-Walrasian dynamic stochastic general equilibrium framework. Extensive references to Lucas’s unpublished materials underpin the claims.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2021-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73958543","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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