http://wswanson.umwblogs.org Just another UMW Blogs.org weblog Sun, 27 Apr 2008 22:12:00 +0000 http://backend.userland.com/rss092 en In their article, After Keynesian Macroeconomics, Thomas Sargent and Robert Lucas inquire into and critique the fundamental limitations of the Keynesian approach to Macroeconomics.  The approach to economics that arose from Keynes, was one that necessarily relied on historical data, upon which regression equations could be tested and specified.  Any ... http://wswanson.umwblogs.org/2008/04/27/after-keynesian-macro-thank-you-sarcas-and-lugent/ In this very brief article, Blinder first argues for what should remain within the established tradition of teaching economics. The IS and LM curves should not be included, for several important reason. The IS curve may be fundamentally flawed because the negative relationship between interest rates and investment may only ... http://wswanson.umwblogs.org/2008/04/21/blinder-dont-keep-the-bath-water/ There are inherent limitations in the IS-LM framework because thinking in terms of aggregate non-dynamic relationships will always, at least implicitly, ignore the way individuals react in accordance with rational, inter-temporal expectations. When Keynes developed his general theory, it was never in anyway general because it failed to incorporate expectations, ... http://wswanson.umwblogs.org/2008/04/02/where-is-the-limit-of-is-lm/ By looking deeply into the differences that exist between Keynes and the New Classical, Shaw contends price flexibility is a major point of divergence.  The new classical assumed that markets would always clear and achieve a Walrasian equilibrium condition, in which there existed a single price vector for all markets ... http://wswanson.umwblogs.org/2008/04/02/a-sticky-situation-for-the-new-classicals/ New Classical Macroeconomics The classical foundations of the Monetarist school provide a first point of departure for the New Classical approach to macroeconomics. There are a few important characteristics of monetarism that should be clarified in order to show more clearly the unique qualities of the New Classical tradition. In general, ... http://wswanson.umwblogs.org/2008/04/02/new-classical-paper/ Methods and Problems in Business Cycle Theory Robert E. Lucas, Jr. Journal of Money, Credit and Banking, Vol. 12, No. 4, Part 2: Rational Expectations. (Nov.,1980), pp. 696-715. Robert Lucas begins his critique with an observation; the intention behind Business Cycle Theory is to create “models” of reality, rather than actually model reality ... http://wswanson.umwblogs.org/2008/03/21/lucas-economist-historian-critic/ Real business cycle theory developed out of the new classical tradition and attempts to explain economic activity fluctuations in a world without coordination failures, "price stickiness, waves of optimism or pessimism, monetary policy, or government policy in general." Therefore, in contrast to the Keynesian approach, RBC theory describes all fluctuations ... http://wswanson.umwblogs.org/2008/03/10/real-business-cycle-theory/ Billy Swanson I didn’t go hunting for an article, because honestly, I was a little afraid of getting something bad/irrelevant off the web. So instead, I read "the new classical contribution to macroeconomics" by David Laidler, pp 334-358. I tried reading the Lucas-Sergant article entitled "After Keynsian Economics," but couldn’t make ... http://wswanson.umwblogs.org/2008/02/19/new-classical-a-micro-mistake/ Unfortunately, I could not find the Klamer article in the library. “HB 172.5, yup. C66 nope. Guess I’ll have to go Google Scholar, hope the article isn’t crap…” No, it wasn’t bad at all, I just hope that I didn’t miss anything too fundamental. This weekend I’ll try to find ... http://wswanson.umwblogs.org/2008/02/14/reagonomics-laffable/ How have I not posted in 8 days? I'll just post on this topic again, becuase Im sure there is something I'm supposed to be doing.  In the article, Thomas Sargent proposes a method to empirically test Irving Fishers hypothesis about real and nominal interest rates in the face of inflation.  This ... http://wswanson.umwblogs.org/2008/02/12/just-a-little-about-the-fisher-hypothesis/