Readings in the History of Modern Macroeconomics

Readings in the History of Modern Macroeconomics This reading list is to provide additional resources to anyone interested in the history of modern macroeconomics. Key: * = in readings for the course (sometimes only excerpts were included, but generally the complete work is listed here). A Note on Online Resources The Center for the History of Political Economy s website (econ.duke.edu/hope/) contains a valuable bank of links entitled Resources for Historians of Economics. Especially useful with respect to the current course are: The New School for Social Research s History of Economic Thought and Critical Perspectives on Economics website: www.newschool.edu/nssr/het/ Among other things it has an extensive set of capsule biography of important economists from the past to the present day Many of the older books in the history of economics can be downloaded from: Google Books: books.google.com/ McMaster University Archive for the History of Economic Thought: socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/index.html Library of Economics and Liberty: www.econlib.org/library/classics.html General Readings Robert Heilbroner, The Worldly Philosophers, 7 th edition. Touchstone, 1999. (Easily the bestselling introduction to the history of economics of all time.) Roger Backhouse, The Ordinary Business of Life: A History of Economics from the Ancient World to the Twenty-First Century. Princeton: Princeton University Press, 2002. Also published as Penguin History of Economics. London: Penguin Books, 2002. (Readable, if highly compressed, history of economics from the beginning to the present.) Sylvia Nasar, Grand Pursuit: The Story of Economic Genius. New York, 2011. (Sometimes inaccurate in its particular facts, but nonetheless an extremely engaging popular account of the ideas of economists in relation to society from Marx through Sen, including the macroeconomic ideas of Fisher, Schumpeter, Robinson, and Keynes.) Joseph Schumpeter, History of Economic Analysis. Oxford: Oxford University Press, 1954. (Bible of history of economics; massive volume that touches on virtually every contributor to economics up to the author s death in 1950. Schumpeter was himself an important contributor to the theory of business cycles.) Mark Blaug, Economic Theory in Retrospect, 5 th ed. Cambridge: Cambridge University 1

Press, 1997. (History of economics reexamined from the point of view of modern economics; frequently translates older writings into the modern language of mathematical models.) Warren Samuels, Jeff Biddle, and John Davis, A Companion to the History of Economic Thought. Oxford: Blackwell. Brian Snowdon and Howard Vane, Modern Macroeconomics: Its Origins, Development And Current State. Cheltenham: Edward Elgar, 2005. (Expansive history of modern macroeconomics; an inside history focusing on the succession of and relations between the books and journal articles that shape and document the rise of macroeconomics.) Steven Durlauf and Lawrence Blume, The New Palgrave Dictionary of Economics. London: Macmillan, 2009. (Despite its name, it is a massive eight-volume encyclopedia with many entries on the history of economics. An earlier edition of the New Palgrave as well as the original 19 th century edition, The Palgrave Dictionary of Economics remain valuable.) 1. The Background to Modern Macroeconomics (before the 1930s) Hume, David, Essays: Moral, Political, and Literary, particularly (a) "Of Money," (b) Of Interest, (c) "Of the Balance of Trade." (Classic book available in various editions. A fine one edited by Eugene F. Miller. Indianapolis: LibertyClassics and reprints an 1885 edition. *Irving Fisher, The Purchasing Power of Money (1911). A. C. Pigou, The Value of Money, Quarterly Journal of Economics 32(1), November 1917, 38-65. John Maynard Keynes, A Tract on Monetary Reform. London: Macmillan, 1923. John Maynard Keynes, A Treatise on Money. London: Macmillan, 1930. Knut Wicksell, Interest and Prices, 1898. Knut Wicksell, Lectures on Political Economy, vol. 1, 1901; vol. 2, 1906. Antoin Murphy, The Genesis of Macroeconomics: New Ideas from Sir William Petty to Henry Thornton. Oxford: Oxford University Press, 2009. Arie Arnon, Monetary Theory and Policy from Hume and Smith to Wicksell: Money, Credit, and the Economy. Cambridge: Cambridge University Press. *Don Patinkin, Money, Interest, and Prices. Cambridge, MA: MIT Press, 1956, notes E-G. *David Laidler, Fabricating the Keynesian Revolution, Cambridge: Cambridge University Press, 1999. Mary Morgan, The History of Econometric Ideas, Cambridge: Cambridge University Press, 1990., Causality in Macroeconomics, ch. 1. (Presents Hume s monetary 2

theory and outlines its causal structure.) 2. The Great Depression: Keynes and His Critics (the 1930s) *J.M. Keynes, The General Theory of Employment Interest and Money (1936). *John R. Hicks, Mr. Keynes and the Classics: A Suggested Interpretation, Econometrica 5(2), 147-159. John R. Hicks, Value and Capital, 2 nd edition. Oxford: Clarendon Press, 1946. Friedrich A. Hayek, Monetary Theory and the Trade Cycle, 1929. Friedrich A. Hayek, Price and Production, 1931. *David Laidler, Fabricating the Keynesian Revolution (1999). Peter Clarke, The Keynesian Revolution in the Making, 1924-1936. Oxford: Oxford University Press. Alan Coddington, Keynesian Economics: The Search for First Principles. London: Unwin Hyman, 1984. Alvin Hansen, A Guide to Keynes. New York: McGraw-Hill, 1953., Relative Wages, Rationality and Involuntary Unemployment in Keynes's Labor Market, History of Political Economy 27(4), 1995, 653-85., Is There a Place for Rational Expectations in Keynes's General Theory? in G.C. Harcourt and P.A. Riach, editors.keynes's General Theory: A Second Edition. London: Routledge, 1997. (Useful for discussion of the relationship of Keynes s notion of uncertainty to his macroeconomics.) Bradley Bateman, Keynes Uncertain Revolution. Ann Arbor: University of Michigan Press, 1996. 3. Macroeconometrics and the New Economics (1930-1950) *Frisch, Ragnar, Propagation Problems and Impulse Problems in Dynamic Economics, in Economic Essays in Honor of Gustav Cassel. London: Routledge, 1933. Gottfried Habeler, Prosperity and Depression. Geneva: League of Nations, 1937. Jan Tinbergen, Business Cycles in the United States, 1919-1932. Geneva: League of Nations, 1939. John Hicks, Value and Capital, 2 nd edition. Oxford: Clarendon Press, 1946. *Lerner, Abba, Functional Finance and the Federal Debt, Social Research, vol. 10, 1943, pp. 38-51 (1943). *Lawrence Klein, The Keynesian Revolution. New York: Macmillan, 1947. 3

*Mary Morgan, The History of Econometric Ideas. Cambridge: Cambridge University Press, 1990. Seymour Harris, editor. The New Economics: Keynes s Influence on Theory and Public Policy. New York: Knopf, 1947. 4. The Empirical Microfoundations of Macroeconomics (1945-1970) *Friedman, Milton. A Theory of the Consumption Function. Princeton: Princeton University Press, 1957. *Paul Samuelson, Economics (particularly 1 st edition, 1948; and 3 rd edition, 1955). New York: McGraw-Hill. John Kendrick, The Historical Development of the National Income Accounts, History of Political Economy 2(2), 1970, 285-315. Carol Carson, The History of the United States National Income and Product Accounts: The Development of an Analytical Tool, Review of Income and Wealth 21(2), June 1975, 153-181. *David Laidler, The Demand for Money (1977), chapter 6. *Ronald Bodkin and Lawrence Klein, A History of Econometric Model Building (1991). 5. The Problem of Inflation (1950-1970) *A.W.H. Phillips, The Relation Between Unemployment and the Rate of Change of Money Wages in the United Kingdom 1961-1957, Economica (1958). *Paul A. Samuelson, and Robert M. Solow, Analytical Aspects of Anti-inflation Policy, American Economic Review (1960). *Milton Friedman, The Role of Monetary Policy, American Economic Review (1967). Edmund Phelps, Phillips Curves, Expectations of Inflation and Optimal Unemployment Over Time, Economica N.S. vol. 34, August 1967, 254-81. Meghnad Desai, The Phillips Curve: A Revisionist Interpretation, Economica 42(165), 1975, 1-19. Meghnad Desai, Wages, Prices, and Unemployment a Quarter Century After the Phillips Curve, in David F. Hendry and Kenneth F. Wallis, editors. Econometrics and Quantitative Economics. Oxford: Blackwell, 1984, pp. 253-73. 4

Nancy Wulwick, The Phillips Curve: Which? Whose? To Do What? How? Southern Economic Journal 53(4), April 1987, 834-57. Richard Lipsey, The Famous Phillips Curve Article, in Robert Leeson, editor. A. W. H. Phillips: Collected Works in Contemporary Perspective. Cambridge: Cambridge University Press, 2000, pp. 232-42. James Forder, The Historical Place of the Friedman-Phelps Expectations Critique, European Journal of the History of Economic Thought 17(3), August 2010, 493-511. 6. The Monetarist Counter-Revolution (1955-1975) Milton Friedman, Studies in the Quantity Theory of Money. Chicago: Chicago University Press, 1956 (contains Friedman s important essay The Quantity Theory of Money: A Restatement, as well as various empirical studies on the quantity theory by his various colleagues and students at Chicago.) *Milton Friedman and Anna J. Schwartz, A Monetary History of the United States (1963), chapter 13. Milton Friedman and Anna J. Schwartz, Money and Business Cycles, Review of Economics and Statistics 45(1, Part 2), February 1963, 32-78. (An examination of he evidence for the role of money in business cycles that draws on material in the authors Monetary History of the United States.) *Nicholas Kaldor, The New Monetarism, Lloyd s Bank Review (1970). Peter Temin, Did Monetary Forces Cause the Great Depression? New York: Norton, 1975. *James Tobin, The Monetarist Counter-Revolution Today an Appraisal, Economic Journal (1981). *J. Daniel Hammond, Theory and Measurement: Causality Issues in Milton Friedman's Monetary Economics. Cambridge: Cambridge University Press, 1996. Thomas Mayer, editor. The Structure of Monetarism. New York: Norton, 1978. (Mayer s own essay The Structure of Monetarism, is especially valuable.) Michael D. Bordo and Anna J. Schwartz, IS-LM and Monetarism, in Michel De Vroey and Kevin Hoover, The IS-LM Model: Its Rise, Fall, and Strange Persistence. Duke University Press, 2004, pp. 217-39 (supplement to History of Political Economy 36(5).) Thomas Mayer, David Hume and Monetarism, in Mark Blaug, editor. The History of Economic Thought. Aldershot: Elgar, 1990, pp. 372-384. 7. New Classicals and New Keynesians (1970-1985) Robert E. Lucas, Jr. and Thomas J. Sargent, editors. Rational Expectations and 5

Econometric Practice. Cambridge, MA: MIT Press, 1981. (Essential anthology of new classical macroeconomics, includes reprints of John Muth s seminal Rational Expectations and the Theory of Price Movements (1961) and Lucas and Sargent s new classical programmatic statement, After Keynesian Macroeconomics, as well as a large number of foundational papers for the new classical school.) Robert E. Lucas, Jr., Studies in Business Cycle Theory. Oxford: Blackwell, 1981. (A collection of Lucas s essential writings, including his Expectations and the Neutrality of Money (1972), Some International Evidence on Output-Inflation Tradeoffs (1973), Econometric Testing of the Natural Rate Hypothesis (1972), Understanding Business Cycles (1977), Methods and Problems in Business Cycle Theory, and Econometric Policy Evaluation: A Critique. ) James Hartley, Kevin Hoover, and Kevin Salyer, editors. Real Business-Cycles Models: A Reader. London: Routledge, 1998. (Contains the classic articles of the real-business-cycle school and its critics, including Kydland and Prescott s seminal Time to Build and Aggregate Fluctuations (1982) and their programmatic statement, The Econometrics of the General Equilibrium Approach to Business Cycles (1991).) *Robert J. Gordon, What Is New-Keynesian Economics? Journal of Economic Literature (1990). N. Gregory Mankiw and David Romer, editors. New Keynesian Economics, vols. 1 and 2. Cambridge, MA.: MIT Press, 1991. *, The New Classical Macroeconomics. Oxford: Blackwell, 1989. *James Hartley, Kevin Hoover, and Kevin Salyer, The Limits of Business Cycle Research: Assessing the Real Business Cycle Model, Oxford Review of Economic Policy 13(3), 1997, pp. 34-54. N. Gregory Mankiw, Real Business Cycles: A New Keynesian Perspective Journal of Economic Perspectives 3(3), Summer 1989, 79-90. David Romer, The New Keynesian Synthesis, Journal of Economic Perspectives 7(1), Winter 1993, pp. 5-22. Esther-Mirjam Sent, The Evolving Rationality of Rational Expectations: An Assessment of Thomas Sargent's Achievements. Cambridge: Cambridge University Press, 2006. 6