Archive for the ‘Economist’ Category

Amartya Sen as a neoclassical economist

January 12, 2023

Antonis Ragkousis of Kings College in this paper argues that Sen is a neoclassical economist in Veblenian sense:

Amartya Sen is often described as an insightful critic of mainstream economics, and in particular, his work in development economics, alongside the construction of the capabilities approach, has been associated with endeavors to revisit both the theory and practice of the discipline.
Despite his in-depth criticisms of certain aspects of mainstream economics, Sen’s extensive use of formal methods is suggestive of an ontological tension, one identified by Thorstein Veblen when commenting on some of his contemporaries and originally introducing the term “neoclassical”.
Veblen coined the term to highlight the ontological inconsistencies in the work of a particular group of economists, including Alfred Marshall and John Neville Keynes. Veblen argued that their work involved both an implicit recognition of a causal processual social ontology he associated with modern, thoroughly evolutionary, approaches and a commitment to a taxonomic conception of science – the latter relying on a set of methods that presupposed an associationist ontology of event regularities. For Veblen, the adherence to taxonomic methods was the classical feature of the work of the relevant group, and the commitment to an evolutionary viewpoint was the neo aspect.
This paper argues that the same tension runs through Sen’s contributions and that he is neoclassical in this specifically Veblenian sense. The assessment of the ontological inconsistencies in Sen’s work is shown to shed light on its reception within the economics academy.

Dr C Rangarajan’s 91st birthday

January 9, 2023

Ahmedabad University recently celebrated and felicitated Dr C Rangarajan on his 91st birthday at its 4th annual economics conference.

What a career he has had and more importantly what a person he is despite all the achievements. Tremendous inspiration for generations. He shows why age is just a number.   He has just written an account of his policy days.

I wrote a few lines on his birthday.

Dr Rangarajan @91

As India reflects on its financial sector reforms of nineteen ninety one,
The captain who led the reforms has also turned  ninety one.
And when that captain writes a book on the reforms at that age,
We know he is a special person on the world stage.

He started career as a teacher of economics,
Appointed RBI Deputy Governor as one of the few  from academics.
He chaired many a committees at the Central Bank,
Gradually shaping himself as an economic think tank.

The 1991 crisis hit all of India’s economic targets,
Needing to change economic policy from planning to markets.
Just like Kapil Dev with whom he nearly shares his birthday,
He led the reforms which has shaped Indian economy as we see it today .

He has  served public for so long,
There is barely a policy position he has not  been on,
From being the RBI governor to holding finance commission chairmanship,
Is like running on the Friedman road and then taking a Keynesian trip.

Even Gods marvel at his work ethic,
All humans can do is to admire and applaud his magic.
We pray that Gods continue to bless him with happiness and health,
So that he can  keep writing books sharing his wealth.


On ‘Defunct Economists’ and the Use of Economic Ideas

January 9, 2023

Prof Steven Medema of Duke University in this paper:

One Friday afternoon a dozen or so years ago I sat in on a freshman honors seminar led by one of my colleagues. This weekly seminar featured guest speakers from various walks of life, and that week’s speaker was a state legislator who happened to be a member of the Republican party. At one point during his talk, the legislator emphasized that he was not a “Keynesian,” for he was opposed to expansive government expenditures, seeing tax cuts as the path to economic growth. During the Q&A period that wound up the session, I raised my hand and, when called upon, informed our speaker that Keynes (1936), too, saw tax cuts as a tool for economic stimulus, meaning that our speaker was, unknowingly, a Keynesian. His reaction was one of disbelief, that I could not possibly be correct. Of course, he had never read Keynes. He had simply been taught that Keynesian economics meant big government and so was bad, and he was only too happy to parrot that line.


Profile of Emi Nakamura: Questiong Assumptions

December 15, 2022

Peter Walker profiles Prof Emi Nakamura of Univ of Berkeley.

One of Emi Nakamura’s favorite movies growing up in Alberta, Canada, was the 1987 docudrama The Race for the Double Helix. Fast-paced and infectious in its enthusiasm for the scientific method, it tells the story of how James Watson and Francis Crick discovered the structure of DNA. “There’s nothing worse than a wrong fact,” quips Crick in the movie, exasperated by all the incorrect theories clouding his thinking (before Rosalind Franklin’s X-ray images of DNA led him and Watson down the right path). It is a quote that Emi recalls her economist parents repeating to emphasize the importance of sound data.

Now a professor of economics at the University of California, Berkeley, the 42-year-old Nakamura is best known for investigating macroeconomic questions using micro data—data that provide information about characteristics of individual people, households, and businesses. She has long been seen as a rising star in economics. In 2018, The Economist listed her among the decade’s eight best young economists. A year later she won the John Bates Clark Medal—awarded to the most influential American economist under the age of 40—for her research on fiscal stimulus and price stickiness, a measure of how often prices change.


Understanding the bitterness of Wassily Leontief: Postwar success and failures of input-output techniques

October 18, 2022

Vincent Carret of University of Lyon in this paper:

Although Leontief was and still is one of the most recognized names in economics, inextricably linked to the development of input-output techniques, he remained fiercely critical of other economists’ works and of the state of economic science during his whole life. To understand his bitterness, we go back to the root of the split between Leontief and the rest of the economics profession, through an examination of the debates that took place in the late 1940s. From his input-output model, conceived as an operational theory of economic interdependencies, Leontief drew a specific approach to economic policy and planning which had a lot of success with government agencies, explaining how he could durably sustain his split from the profession.


A Life in Development Economics and Political Economy: An interview with Jayati Ghosh

October 13, 2022

Jamie Morgan of Leeds Beckett University Business School interviews Jayati Ghosh on her journey in economics and many more things.


Religion, the Scottish Enlightenment, and the Rise of Liberalism

October 3, 2022

Erik W. Matson and Jordan J. Ballor in this article

Does the liberal project presuppose, as some have claimed, an unrealistic and individualistic anthropology (Deneen 2018; Macpherson
1962)? Does modern economics share such presuppositions (see discussions in Bowles 1998; 2016)? Do our sensibilities about the individual and the ethics of pluralism derive from religious beliefs (Siedentop 2014)? Can those sensibilities be maintained if their motivating beliefs are no longer widely held? Were there, as Hayek also argued, different varieties of liberalism on offer from the eighteenth century and beyond? What might a liberal system of political economy look like when based on “speculative and rationalistic” perspectives as opposed to “empirical and unsystematic” approaches (Hayek 2011, 108; see also Freire 2021)?

It is with such questions in mind that we organized the present symposium, “Religion, the Scottish Enlightenment, and the Rise of Liberalism.” Building on recent literature (e.g. Oslington 2011; 2018; Ballor and van der Kooi 2022), we aimed to facilitate discussions on the
development of political economy and early liberal discourse in eighteenth-century Scotland by  considering the religious and cultural framework from which they emerged.

Axel Leijonhufvud: A life among the Econ, 1933 to 2022

October 3, 2022

Prof Roger Farmer pays tribute to Prof Axel Leijonhufvud

Axel Leijonhufvud, who passed away in May 2022, was one of the most creative macroeconomists of his generation. This column, written by a long-time friend and colleague, outlines the development of his thought, including his work on Keynes and Keynesian economics; his enthusiasm for agent-based modelling; his insistence that good macroeconomists need to understand the past before they can understand the present or the future; his view that modern macroeconomics is a degenerative research programme that took a wrong turn in the 1950s; and his many contributions to policy discussions on VoxEU during the Global Financial Crisis and the ensuing Great Recession.

Vanity and Luck in Adam Smith’s Economic Growth

September 15, 2022

Maria Pia Paganelli of Trinity University in this new paper:

What are the causes of prosperity? In addition to saving, capital accumulation, and good institutions, Adam Smith explains opulence through vanity and luck, two variables we tend to forget today. For Smith, wealth comes from our propensity to better our condition, combined with freedom and the security of the law. The propensity to better our condition is grounded in our vanity, and can take the form of both parsimony and prodigality. The laws that guarantee freedom and security seem to be more of an accident of history rather than deliberate attempts to create prosperity. For Smith, vanity and accidents play a relevant role in economic growth.


Religion and the Rise of Capitalism

September 2, 2022

Interesting article by Prof Benjamin Friedman of Harvard university. The article is based on his book on role of religion in rise of capitalism.

Where do our ideas about how the economy works, and our views on economic policy, come from? Most people in the Western world, and especially in America, simply take for granted that we organize one of the most essential aspects of human activity—the economic
sphere—primarily around private initiative channeled through markets. But where did that presumption come from?And why do so many people, again especially Americans, often see any challenge to our market-centered conduct of economic affairs as a fundamental threat to our way of life?

Our ideas about economics and economic policy have long-standing roots in religious thinking. Most are unaware of  how religious ideas shape our economic thinking, and when such links are occasionally suggested they are mostly misunderstood. But religion—not just the daily or annual cycle of ritual observances, but the inner belief structure that forms an essential part of people’s view of the world in which they live—has shaped human thinking since before there were written words to record it. The influence of religious beliefs on modern Western economics has been profound, and it remains important today. Critics of today’s economics sometimes complain that belief in free markets, among economists and many ordinary citizens too, is itself a form of religion. It turns out that there is something to the idea: not in the way the critics mean, but in a deeper, more historically grounded sense.

Read the article for more insights.

Adam Smith and Pin-making: Some Inconvenient Truths

August 25, 2022

Prof Timothy Taylor on his fab blog conversable economist says smith’s pin factory example is not a great example of gains of division of labour:

One of the famous anecdotes in economics is about division of labor in a pin factory, as told by Adam Smith starting in the third paragraph of The Wealth of Nations. (One suspects the fame of the story is partly related to the fact anyone who cracks open the book will find it at the very beginning.) Smith notes in the text that his example was already common at the time he used it. But those who specialize in this area have pointed that Smith’s example was based on second- and third-hand reporting, while actual studies of pin-making in the 18th century suggest that it may not be a great example of the gains from division of labor.

Read the post for more details.

Profile and contribution of Richard Posner: transformed law and economics to economic analysis of law

August 1, 2022

Jean-Baptiste Fleury and Alain Marciano profile works of Richard Posner:

Richard A. Posner was the most important actor in the transformation from “law and economics” to an “economic analysis of law”. Posner applied Chicago price theory to the analysis of law and legal rules. He not only contributed to the field but also structured it. This is what this chapters shows. We also show that Posner’s work illustrates the Chicagoan dimension of his economic analysis of law. That Posner, especially later in his career, introduced some elements that might seem to be at odds with Chicago economics – pragmatism, notably – or that he claimed having become a Keynesian does not change much to the claim that it was Posner who crafted Chicago’s economic analysis of law.


The rise of the ‘Invisible Hand’ metaphor

July 20, 2022

Kwok Ping Tsang of Virginia Polytechnic Institute & State University in this SSRN paper:

This article explains the rise of Smith’s metaphor near the end of the nineteenth century. I provide evidence that the reappearance was partly triggered by the rise of the Moral Sciences Tripos at Cambridge, as exemplified by a publication by Maitland. Against the backdrop of liberal trade policies and wealth inequality, most references to the “invisible hand” metaphor at the turn of the twentieth century are against the idea of laissez faire and unregulated pursuit of interests, and the metaphor was invoked to argue that Smith does not treat economy harmonies as an a priori truth that always and everywhere applies.


The glories of Irish economics and economists

June 29, 2022

We often talk about Scottish enlightenment where a bunch of Scottish thinkers thought and worked on many ideas which laid the foundations of modern economic growth and industrial revolution.

Tyler Cowen blogs about the highly underrated Irish enlightenment and its famous economists:

Yesterday I mentioned the underrated Irish Enlightenment (don’t forget Toland!), today I will briefly lay out how many top early economists came from Ireland.  Here is a partial list of those economists and their contributions:

1. Richard Cantillon, 1680s-1734.  Perhaps the second greatest economist of his century after Adam Smith, he developed the ideas of entrepreneurship and opportunity cost and in general embraced common sense.  Jevons called his Essay on the Nature of Commerce in General the “cradle of political economy.”  He was a major influence on Smith.

2. Edmund Burke, 1729-1797.  Burke has been underrated as an economist, see the recent book by Greg Collins on Burke’s economic thought.  Here is a short essay on Burke’s conservative case for markets.

3. Robert Torrens, 1780-1864.  A major thinker on international trade, he developed the theory of comparative advantage before Ricardo did, and was a sophisticated analyst on a broad range of questions, including terms of trade and currency policy.  He also promoted a version of the charter city idea for southern Australia, and to this day some things in Adelaide bear his name.

4. Richard Whately, 1787-1863.  Mostly an archbishop, theologian, and philosopher, his writings on economics developed the notion of “catallactics,” namely economics as the science of exchange.

3. Mountifort Longfield, 1802-1884.  A first-rate common sense economist, and arguably the first writer to clearly state the laws of supply and demand.  He also developed a marginal productivity theory for the value of labor and capital.  The first professor of political economy at Trinity College.

5. John Elliott Cairnes, 1823-1875.  An important thinker on the methodology of the social sciences, an all-around excellent economist, and his diagnosis of the economics and sociology of slavery (it ruined and infected all parts of Southern society) was spot on.  He is sometimes considered “the last of the classical economists.”

6. Isaac Butt, 1813-1879.  Best-known for his role in Irish political history and the Home Rule movement, he produced what is arguably the first coherent account of the marginal product theory of distribution and factor prices.  He also analyzed the Irish system in terms of the economics of misallocated land, and he promoted welfare state ideas.

7. Francis Ysidro Edgeworth, 1845-1926.  One of the founders and leading lights of mathematical economics, he produced an early version of the Coase Theorem, the notion that market price converges on a competitive equilibrium as the number of buyers and sellers grows, explained the importance of tangency conditions for economic equilibrium, developed the economics of progressive taxation, fleshed out the economics of monopoly pricing, and he initiated the use of offer curves for international trade theory.

And please, none of your b.s. about Anglo-Irish, Norman, Spanish, etc. — they were Irish!  I think of these individuals as continuing the earlier Irish Enlightenment of the eighteenth century.

Nobel endevours with Nobel laureates

June 15, 2022

Superb set of questions to Nobel laureates and enriching answers from including two from economics David Card and Angus Deaton (HT: Ashish Kulkarni of Everydayecon blog).  There are lessons in humility too.

This one by Angus Deaton is gold:

Q: Nobel Prize-winning physicist Richard Feynman once said ‘If you think you understand quantum mechanics, you don’t understand quantum mechanics.’ As people who’ve never professed to understand quantum mechanics, The Fence find this statement quite presumptuous, but decided we’d ask some of the world’s biggest boffins how much they do or don’t know about their jobs, life and everything else besides.

profangus deaton (economics, 2015)

For me, macroeconomics is like quantum mechanics. Though it is not just me. It changes shape all of the time, and I have done economics long enough to see what is true – and what is not true – change places over and over again. Slightly differently, there is an idea in statistics, used also in economics, called ‘regression to the mean’. Ask any economist or statistician if they understand it, and they will all say yes, of course. But the great statistician David Freedman used to say of testifying in court that whoever has to explain ‘regression to the mean’ to the judge has thereby lost the case. As an example, suppose poorer countries always grow faster than richer countries. So their income must get closer together over time? No, not necessarily. That is an example of ‘regression to the mean’  sowing confusion.



Joan Robinson on Karl Marx: “His Sense of Reality Is Far Stronger”

May 16, 2022

Carolina Alves in the recent issue Journal of Economic Perspectives on Joan Robinson’s turn to Marxism:

Robinson’s essay on Marxism here


Hayekian Economic Policy

May 3, 2022

Lars P. Feld and Daniel Nientiedt of Walter Eucken Institute in this paper:

What is the appropriate role of the state in economic policy-making? This paper shows that Friedrich Hayek, who is often considered a proponent of laissez-faire liberalism, offers three different answers to this problem.

First, Hayek argues that the state should provide a legal framework for competitive markets.

Second, he proposes to employ the rule of law criteria – generality, equality, and certainty – to distinguish permissible from non-permissible state interventions.

Third, he rejects deliberate legislation and moves closer to the Misean idea of a minimal state.

The paper considers these answers in light of Hayek’s analysis of the knowledge problem. We suggest that a Hayekian approach to economic policy-making should focus on improving the framework of general rules that guide individual behavior, thereby enabling spontaneous ordering processes and reducing the epistemological burden placed on policy-makers.


Remembering 1966 B.R. Shenoy Report on Sri Lanka : An instance of missed opportunity for Sri Lanka?

April 5, 2022

Each time Sri Lanka goes into a crisis, we need to remember the profound insights of Indian economist BR Shenoy. Perhaps if his policy suggestions were accepted by the Sri Lankan government in 1966, Sri Lanka could have avoided future crisis. But this is a big if and perhaps.

Sri Lanka was going through a crisis in the 1960s. The Government of Sri Lanka appointed Shenoy to study and suggest economic policy going forward.  Shenoy submitted a report outlining many suggestions which were quite amazing and futuristic.

In this article, W.A Wijewardena, a former Deputy governor of the Central Bank of Sri Lanka takes us through the background of SL crisis in 1960s and what led the Government to appoint Shenoy:


The Ukrainian economist who is fighting the Russians with logistics

March 22, 2022

Tyler Cowen on Marginal Revolution blog profiles Tymofiy Mylovanov, a Ukrainian economist fighting the Russians with logistics.

This Bloomberg piece by Scott Duke Kominers is an interview with the heroic Tymofiy Mylovanov.  He is an economist, also of the University of Pittsburgh, who is organizing many of the logistics in Ukraine and also running the Kyiv School of Economics.  I am honored to know Tymofiy, here is one bit of a much broader story:

Mylovanov: Within the first couple of days, you see how people respond differently. Some people get traumatized; some become dysfunctional; others become almost super-efficient, like me and my team. But you have to figure out how to function in war or you die. Your loved ones will die. And we had a plan — war-time protocols at the university. We even had a war committee, and everyone was responsible for specific tasks, and they have to start executing them. Otherwise we collapse.

If someone doesn’t show up to a meeting, that doesn’t matter. Decisions are made without them. No wavering, no trembling hand. You either do it or you don’t do it and you accept the consequences. So we managed to shut down our facilities and put security in our buildings and the people there had food and water, and they’ve been staying there for two weeks.

There is much more detail in the article, which is interesting throughout.  And:

Mylovanov: One specific thing: We need 307,000 medical kits. I have the specification. Let’s say Israel can only supply 30,000 and Canada probably can supply 20 or 30,000. But we have suppliers who can provide the medical kits. We give this specification to [Ukraine’s] Ministry of Health, and our charitable foundation will pay. So tag me or email me or ping me on Twitter — and then donate, please donate.

All the fundraising goes directly to logistics. I have a website at the university of the charitable foundation [Kyiv School of Economics Humanitarian Relief Fund], and there is a Twitter post at my account. If I get a hundred dollars on that charitable foundation, it goes towards medical kits and it’s likely going to save a life.

By the way, Tymofiy Mylovanov is widely published in economics journals, including Econometrica and JET.  Here is Tymofiy on Twitter.

Discussion with Lant Pritchett: Where did development economics go wrong?

March 22, 2022

Shruti Rajgopalan has a conversation with Prof Lant Pritchett on the IdeasofIndia podcast.

In this episode, Shruti speaks with Lant Pritchett about economic convergence, academic skepticism about growth, flawed methodologies in development economics, the shortcomings of India’s educational system and much more. Pritchett is a development economist from Idaho. He is currently affiliated with Oxford’s Blavatnik School of Government as the research director of the RISE Programme, is the Research Director at LaMP (Labor Mobility Partnerships) and is a fellow at the London School of Economics. He previously worked with the World Bank from 1988 to 2007, living in Indonesia 1998-2000 and India 2004-2007. His publications span a wide range of development topics including economic growth, state capability, education, labor mobility and development assistance.

The earlier problem was how much to read. Now it is how much to hear!

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