|Died||August 7, 1995 73) (aged|
|Institution||Hebrew University of Jerusalem|
|Alma mater||University of Chicago|
|Influences|| Oskar Lange |
John Maynard Keynes
Don Patinkin (Hebrew: דן פטינקין) (January 8, 1922 – August 7, 1995) was an American-born Israeli monetary economist, and the President of the Hebrew University of Jerusalem.
Don Patinkin was born January 8, 1922, in Chicago, to a family of Jewish emigrants from Poland.[ citation needed ] While doing his undergraduate studies at the University of Chicago, he also studied the Talmud at the Hebrew Theological College in Chicago. He continued at Chicago for his graduate studies, earning a Ph.D. in 1947 under the supervision of Oskar R. Lange. Patinkin was a strong Zionist and, while doing his graduate studies, planned to immigrate to Palestine; in his graduate research he studied Palestinian economics, although he did not complete his thesis in this subject.
After graduating he held lecturer positions at the University of Chicago and the University of Illinois until he succeeded in emigrating to Israel in 1949, where he was hired by the Hebrew University in Jerusalem. In 1956 he was appointed the research director of the Falk Institute for Economic Research, which was established by Simon Kuznetz with the support of the Falk Foundation.
He remained at the Hebrew University. becoming university president from 1982 to 1986, following Avraham Harman. He resigned due to the poor state of the university's finances and was succeeded by Amnon Pazy.He retired in 1989, and died August 7, 1995, in Jerusalem.
Patinkin's work explored some of the microfoundations of Keynesian macroeconomics, particularly the role of money demand. His monograph Money, Interest, and Prices (1956) was for many years one of the most widely used advanced references on monetary economics.
Huw Dixon believes that: "Money, Interest and Prices is perhaps as great in its vision as Keynes' General Theory. Whilst the latter has a greater abundance of originality, the former has a greater clarity of insight and formal expression. Don Patinkin states his theory of the labour market and corresponding notion of the full employment equilibrium in just three pages of Money, Interest and Prices (in the 1965 edn. pp. 127–30). These pages deserve great attention: they state the labour market model that became the standard foundation for the aggregate supply curve in the aggregate demand/aggregate supply (AD/AS) model. Although Patinkin himself did not formulate the AD/AS representation, it is implicit in his Money, Interest and Prices."
Patinkin was awarded the Israel Prize in 1970.In 1989, a conference was held in honor of Patinkin's retirement.
Keynesian economics are the various macroeconomic theories and models of how aggregate demand strongly influences economic output and inflation. In the Keynesian view, aggregate demand does not necessarily equal the productive capacity of the economy. Instead, it is influenced by a host of factors – sometimes behaving erratically – affecting production, employment, and inflation.
Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and government spending to regulate an economy’s growth and stability. This includes regional, national, and global economies. According to a 2018 assessment by economists Emi Nakamura and Jón Steinsson, economic "evidence regarding the consequences of different macroeconomic policies is still highly imperfect and open to serious criticism."
In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an overall general equilibrium. General equilibrium theory contrasts to the theory of partial equilibrium, which only analyzes single markets. In general equilibrium, constant influences are considered to be noneconomic, therefore, resulting beyond the natural scope of economic analysis.
The IS–LM model, or Hicks–Hansen model, is a two-dimensional macroeconomic tool that shows the relationship between interest rates and assets market. The intersection of the "investment–saving" (IS) and "liquidity preference–money supply" (LM) curves models "general equilibrium" where supposed simultaneous equilibria occur in both the goods and the asset markets. Yet two equivalent interpretations are possible: first, the IS–LM model explains changes in national income when the price level is fixed in the short-run; second, the IS–LM model shows why an aggregate demand curve can shift. Hence, this tool is sometimes used not only to analyse economic fluctuations but also to suggest potential levels for appropriate stabilisation policies.
Sir John Hicks was a British economist. He is considered one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economics were his statement of consumer demand theory in microeconomics, and the IS–LM model (1937), which summarised a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory. The compensated demand function is named the Hicksian demand function in memory of him.
The Stockholm School is a school of economic thought. It refers to a loosely organized group of Swedish economists that worked together, in Stockholm, Sweden primarily in the 1930s.
The General Theory of Employment, Interest and Money of 1936 is a book by English economist John Maynard Keynes. It caused a profound shift in economic thought, giving macroeconomics a central place in economic theory and contributing much of its terminology – the "Keynesian Revolution". It had equally powerful consequences in economic policy, being interpreted as providing theoretical support for government spending in general, and for budgetary deficits, monetary intervention and counter-cyclical policies in particular. It is pervaded with an air of mistrust for the rationality of free-market decision making.
A liquidity trap is a situation, described in Keynesian economics, in which, "after the rate of interest has fallen to a certain level, liquidity preference may become virtually absolute in the sense that almost everyone prefers holding cash rather than holding a debt which yields so low a rate of interest."
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
Neutrality of money is the idea that a change in the stock of money affects only nominal variables in the economy such as prices, wages, and exchange rates, with no effect on real variables, like employment, real GDP, and real consumption. Neutrality of money is an important idea in classical economics and is related to the classical dichotomy. It implies that the central bank does not affect the real economy by creating money. Instead, any increase in the supply of money would be offset by a proportional rise in prices and wages. This assumption underlies some mainstream macroeconomic models. Others like monetarism view money as being neutral only in the long-run.
In macroeconomics, the classical dichotomy is the idea, attributed to classical and pre-Keynesian economics, that real and nominal variables can be analyzed separately. To be precise, an economy exhibits the classical dichotomy if real variables such as output and real interest rates can be completely analyzed without considering what is happening to their nominal counterparts, the money value of output and the interest rate. In particular, this means that real GDP and other real variables can be determined without knowing the level of the nominal money supply or the rate of inflation. An economy exhibits the classical dichotomy if money is neutral, affecting only the price level, not real variables. As such, if the classical dichotomy holds, money only affects absolute rather than the relative prices between goods.
Michael Dean Woodford is an American macroeconomist and monetary theorist who currently teaches at Columbia University.
The neoclassical synthesis (NCS), neoclassical–Keynesian synthesis, or just neo-Keynesianism was a post-World War II academic movement and paradigm in economics that worked towards reconciling the macroeconomic thought of John Maynard Keynes with neoclassical economics. Being Keynesian in the short run and neoclassical in the long run, neoclassical synthesis allowed the economy to adjust via fiscal and monetary policies in the short run whilst predicting that equilibrium in the long run will be reached without state intervention. The synthesis, formulated by a group of economists, dominated economics in the post-war period and formed the mainstream of macroeconomic thought in the 1950s, 1960s and 1970s.
New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework. Specifically, it emphasizes the importance of rigorous foundations based on microeconomics, especially rational expectations.
Paul Davidson is an American macroeconomist who has been one of the leading spokesmen of the American branch of the post-Keynesian school in economics. He is a prolific writer and has actively intervened in important debates on economic policy from a position that is very critical of mainstream economics.
In economics, the loanable funds doctrine is a theory of the market interest rate. According to this approach, the interest rate is determined by the demand for and supply of loanable funds. The term loanable funds includes all forms of credit, such as loans, bonds, or savings deposits.
Frank Horace Hahn FBA was a British economist whose work focused on general equilibrium theory, monetary theory, Keynesian economics and monetarism. A famous problem of economic theory, the conditions under which money can have a positive value in a general equilibrium, is called "Hahn's problem" after him.
Macroeconomic theory has its origins in the study of business cycles and monetary theory. In general, early theorists believed monetary factors could not affect real factors such as real output. John Maynard Keynes attacked some of these "classical" theories and produced a general theory that described the whole economy in terms of aggregates rather than individual, microeconomic parts. Attempting to explain unemployment and recessions, he noticed the tendency for people and businesses to hoard cash and avoid investment during a recession. He argued that this invalidated the assumptions of classical economists who thought that markets always clear, leaving no surplus of goods and no willing labor left idle.
Robert Wayne Clower was an American economist. He is credited with having largely created the field of stock-flow analysis in economics and with seminal works on the microfoundations of monetary theory and macroeconomics.
Disequilibrium macroeconomics is a tradition of research centered on the role of disequilibrium in economics. This approach is also known as non-Walrasian theory, equilibrium with rationing, the non-market clearing approach, and non-tâtonnement theory. Early work in the area was done by Don Patinkin, Robert W. Clower, and Axel Leijonhufvud. Their work was formalized into general disequilibrium models, which were very influential in the 1970s. American economists had mostly abandoned these models by the late 1970s, but French economists continued work in the tradition and developed fixprice models.