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How Macroeconomists Lost Control of Stabilization Policy: Towards Dark Ages
- Source :
- European Journal of the History of Economic Thought, European Journal of the History of Economic Thought, Taylor & Francis (Routledge), 2020, 27 (6), pp.938-982. ⟨10.1080/09672567.2020.1817119⟩
- Publication Year :
- 2020
- Publisher :
- Elsevier BV, 2020.
-
Abstract
- International audience; This paper is a study of the history of the transplant of mathematical tools using negative feedback for macroeconomic stabilisation policy from 1948 to 1975 and the subsequent break of the use of control for stabilisation policy which occurred from 1975 to 1993. New-classical macroeconomists selected a subset of the tools of control that favoured their support of rules against discretionary stabilisation policy. The Lucas critique and Kydland and Prescott’s time-inconsistency were over-statements that led to the “dark ages” of the prevalence of the stabilisation-policy-ineffectiveness idea. These over-statements were later revised following the success of the Taylor rule.
- Subjects :
- FOS: Computer and information sciences
Stabilization Policy Ineffectiveness
Stabilisation policy ineffectiveness
060106 history of social sciences
History and Overview (math.HO)
JEL: E - Macroeconomics and Monetary Economics/E.E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit/E.E5.E58 - Central Banks and Their Policies
Economics, Econometrics and Finance (miscellaneous)
Control (management)
Statistics - Applications
JEL: B - History of Economic Thought, Methodology, and Heterodox Approaches/B.B2 - History of Economic Thought since 1925/B.B2.B22 - Macroeconomics
JEL: C - Mathematical and Quantitative Methods/C.C6 - Mathematical Methods • Programming Models • Mathematical and Simulation Modeling/C.C6.C62 - Existence and Stability Conditions of Equilibrium
FOS: Economics and business
JEL: E - Macroeconomics and Monetary Economics/E.E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit/E.E5.E52 - Monetary Policy
JEL: C - Mathematical and Quantitative Methods/C.C6 - Mathematical Methods • Programming Models • Mathematical and Simulation Modeling/C.C6.C61 - Optimization Techniques • Programming Models • Dynamic Analysis
History and Philosophy of Science
Negative feedback
Control
0502 economics and business
FOS: Mathematics
Economics
Applications (stat.AP)
0601 history and archaeology
050207 economics
Mathematics - Optimization and Control
Stabilization policy
JEL: C - Mathematical and Quantitative Methods/C.C7 - Game Theory and Bargaining Theory/C.C7.C73 - Stochastic and Dynamic Games • Evolutionary Games • Repeated Games
Dynamic Games
JEL: E - Macroeconomics and Monetary Economics/E.E4 - Money and Interest Rates/E.E4.E44 - Financial Markets and the Macroeconomy
050208 finance
Mathematics - History and Overview
01A60, 91.02, 91.03, 93-02, 93-03
General Arts and Humanities
Keynesian economics
05 social sciences
Monetary policy
06 humanities and the arts
[SHS.ECO]Humanities and Social Sciences/Economics and Finance
16. Peace & justice
Lucas critique
Taylor rule
Fiscal policy
JEL: E - Macroeconomics and Monetary Economics/E.E4 - Money and Interest Rates/E.E4.E47 - Forecasting and Simulation: Models and Applications
Optimization and Control (math.OC)
Repeated game
Dark Ages
JEL: E - Macroeconomics and Monetary Economics/E.E4 - Money and Interest Rates/E.E4.E43 - Interest Rates: Determination, Term Structure, and Effects
Quantitative Finance - General Finance
General Finance (q-fin.GN)
Subjects
Details
- ISSN :
- 15565068, 09672567, and 14695936
- Database :
- OpenAIRE
- Journal :
- SSRN Electronic Journal
- Accession number :
- edsair.doi.dedup.....e0c1b1e62edfa5333fb68c0e331dd87c