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Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output/GDP and national income, unemployment, price indices and inflation, consumption, saving, investment, energy, international trade, and international finance.
Post-Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, with subsequent development influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor, Sidney Weintraub, Paul Davidson, Piero Sraffa and Jan Kregel. Historian Robert Skidelsky argues that the post-Keynesian school has remained closest to the spirit of Keynes' original work. It is a heterodox approach to economics.
Nicholas Kaldor, Baron Kaldor, born Káldor Miklós, was a Cambridge economist in the post-war period. He developed the "compensation" criteria called Kaldor–Hicks efficiency for welfare comparisons (1939), derived the cobweb model, and argued for certain regularities observable in economic growth, which are called Kaldor's growth laws. Kaldor worked alongside Gunnar Myrdal to develop the key concept Circular Cumulative Causation, a multicausal approach where the core variables and their linkages are delineated. Both Myrdal and Kaldor examine circular relationships, where the interdependencies between factors are relatively strong, and where variables interlink in the determination of major processes. Gunnar Myrdal got the concept from Knut Wicksell and developed it alongside Nicholas Kaldor when they worked together at the United Nations Economic Commission for Europe. Myrdal concentrated on the social provisioning aspect of development, while Kaldor concentrated on demand-supply relationships to the manufacturing sector. Kaldor also coined the term "convenience yield" related to commodity markets and the so-called theory of storage, which was initially developed by Holbrook Working.
Robert Merton Solow, GCIH is an American economist whose work on the theory of economic growth culminated in the exogenous growth model named after him. He is currently Emeritus Institute Professor of Economics at the Massachusetts Institute of Technology, where he has been a professor since 1949. He was awarded the John Bates Clark Medal in 1961, the Nobel Memorial Prize in Economic Sciences in 1987, and the Presidential Medal of Freedom in 2014. Four of his PhD students, George Akerlof, Joseph Stiglitz, Peter Diamond and William Nordhaus, later received Nobel Memorial Prizes in Economic Sciences in their own right.
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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.
Tobin's q, is the ratio between a physical asset's market value and its replacement value. It was first introduced by Nicholas Kaldor in 1966 in his paper: Marginal Productivity and the Macro-Economic Theories of Distribution: Comment on Samuelson and Modigliani. It was popularised a decade later by James Tobin, who in 1970, described its two quantities as:
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Giovanni Dosi is Professor of Economics and Director of the Institute of Economics at the Scuola Superiore Sant'Anna in Pisa. He is the Co-Director of the task forces “Industrial Policy” and “Intellectual Property” at the Initiative for Policy Dialogue at Columbia University. Dosi is Continental European Editor of Industrial and Corporate Change. Included in ISI Highly Cited Researchers.
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The neoclassical synthesis (NCS), neoclassical–Keynesian synthesis, or just neo-Keynesianism was a neoclassical economics academic movement and paradigm in economics that worked towards reconciling the macroeconomic thought of John Maynard Keynes in his book The General Theory of Employment, Interest and Money (1936). It was formulated most notably by John Hicks (1937), Franco Modigliani (1944), and Paul Samuelson (1948), who dominated economics in the post-war period and formed the mainstream of macroeconomic thought in the 1950s, 60s, and 70s.
Luigi L. Pasinetti was an Italian economist of the post-Keynesian school. Pasinetti was considered the heir of the "Cambridge Keynesians" and a student of Piero Sraffa and Richard Kahn. Along with them, as well as Joan Robinson, he was one of the prominent members on the "Cambridge, UK" side of the Cambridge capital controversy. His contributions to economics include developing the analytical foundations of neo-Ricardian economics, including the theory of value and distribution, as well as work in the line of Kaldorian theory of growth and income distribution. He also developed the theory of structural change and economic growth, structural economic dynamics and uneven sectoral development.
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.
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Bowley's law, also known as the law of the constant wage share, is a stylized fact of economics which states that the wage share of a country, i.e., the share of a country's economic output that is given to employees as compensation for their work, remains constant over time. It is named after the English economist Arthur Bowley. Research conducted near the start of the 21st century, however, found wage share to have declined since the 1980s in most major economies.
Nicholas Kaldor in his essay titled A Model of Economic Growth, originally published in Economic Journal in 1957, postulates a growth model, which follows the Harrodian dynamic approach and the Keynesian techniques of analysis. In his growth model, Kaldor attempts “to provide a framework for relating the genesis of technical progress to capital accumulation”, whereas the other neoclassical models treat the causation of technical progress as completely exogenous.
The Cambridge capital controversy, sometimes called "the capital controversy" or "the two Cambridges debate", was a dispute between proponents of two differing theoretical and mathematical positions in economics that started in the 1950s and lasted well into the 1960s. The debate concerned the nature and role of capital goods and a critique of the neoclassical vision of aggregate production and distribution. The name arises from the location of the principals involved in the controversy: the debate was largely between economists such as Joan Robinson and Piero Sraffa at the University of Cambridge in England and economists such as Paul Samuelson and Robert Solow at the Massachusetts Institute of Technology, in Cambridge, Massachusetts, United States.
References
- ↑ Cooley, Thomas, ed. (1995). Frontiers of Business Cycle Research. Princeton University Press. p. 3. ISBN 978-0-691-04323-4.
- ↑ The full text of Tinbergen's 1936 paper, originally written in Dutch, is available in English as 'An economic policy for 1936', in Klaassen et al., eds. (1959, pp. 37–84). There the quoted phrases are found on p. 41, in a somewhat different wording. This translation is taken from Don, H. and Verbruggen, J. 2006. Models and methods for economic policy;60 years of evolution at CPB Statistica Neerlandica 60)2.
- ↑ Kaldor, Nicholas (1961). "Capital Accumulation and Economic Growth". In Lutz; Hague (eds.). The Theory of Capital. London. pp. 177–222.
{{cite book}}: CS1 maint: location missing publisher (link) - ↑ Kaldor, Nicholas (1957). "A Model of Economic Growth". The Economic Journal. 67 (268): 591–624. doi: 10.2307/2227704 . JSTOR 2227704.
- 1 2 Kaldor 1961, p. 178
- ↑ Cont, Rama (2001). "Empirical properties of asset returns: stylized facts and statistical issues". Quantitative Finance . 1 (2): 223–236. doi:10.1080/713665670. S2CID 5625400.
- ↑ Kahn, James A. (1987). "Inventories and the Volatility of Production". American Economic Review . 77 (4): 667–679. JSTOR 1814538.
- ↑ Boland (1987). "Stylized Facts". In Eatwell, J.; Milgate, M.; Newman, P. (eds.). The New Palgrave Dictionary of Economics. Vol. 4. London: Macmillan Press. pp. 535–536. ISBN 978-0-333-37235-7.
- 1 2 Heine, Bernd-O.; Meyer, Matthias; Strangfeld, Oliver (2005). "Stylised Facts and the Contribution of Simulation to the Economic Analysis of Budgeting". Journal of Artificial Societies and Social Simulation. 8 (4): 4.
- ↑ Houy, Constantin; Fettke, Peter; Loos, Peter (2015). "Stylized Facts as an Instrument for Literature Review and Cumulative Information Systems Research". Communications of the AIS (CAIS). 37 (1): 225–256.
- ↑ Solow (1969). Growth Theory: an Exposition (Paperback ed.). New York, NY: Oxford Univ. Press. p. 2.
- ↑ Cont, R. (2001). "Empirical Properties of Asset Returns: Stylized Facts and Statistical Issues". Quantitative Finance. 1 (2): 223–236. doi:10.1080/713665670.