Search

This paper explores the implications for modern economic thought of the debate on Theodicy, i.e., the coexistence of a good, almighty God and worldly evils. In the 17th century, this problem was raised by Pierre Bayle. The analysis focuses on the 18th century Italian school of Civil economy represented by Antonio Genovesi. Our argument is that Genovesi, and Giambattista Vico before him, reacted to Bayle's Manichaean and Atheistic view on theodicy, and that Genovesi's reaction influenced his view of the market as a place of mutual assistance where the invisible hand holds a secondary and subsidiary role compared to virtues in promoting the common good.

The paper presents the professor-student network of Nobel laureates in economics. 82 of the 87 Nobelists belong to one family tree. The remaining five belong to three separate trees. There are 376 men in the graph, and five women. Karl Knies is the central-most professor, followed by Wassily Leontief. No classical and few neo-classical economists have left notable descendants. Harvard is the centralmost university, followed by Chicago and Berlin. Most candidates for the Nobel Prize belong to the main family tree, but new trees may arise for the students of Terence Gorman and Denis Sargan.

This paper discusses the transition from a perspective in which the determination of income, output, and unemployment was seen as a part of the theory of the business cycle to one in which they are determined independently of the cycle, a transition that meant that the theory of output came to be more sharply separated from the theory of growth. In place of theories of the business cycle, which were rooted in structural changes associated with growth, business cycle theory came to be more of an adjunct to short-run theories. Whereas Arthur Cecil Pigou and John Maynard Keynes were already arguing in terms of the short run by the early 1930s, some American economists continued to think in terms of the business cycle until the very end of the 1930s. This paper shows that for Alvin Hansen and Paul Samuelson, both highly influential figures in postwar economics, the shift came about only because of the need to adduce structural factors to explain the recession of 1937–38 and wartime experience. The focus on income determination as the central macroeconomic problem in Samuelson’s textbook reflected the change in thinking that had happened during the 1940s.

Axel Leijonhufvud’s On Keynesian Economics and the Economics of Keynes (1968) definitely belongs to the category of “classic” books. Its message—decentralised economies are prone to large increases in unemployment since communication failures prevent the optimal coordination of private decisions—is by now well understood. In this paper, we argue that even though most commentators correctly identify this message, they overlook two crucial aspects of Leijonhufvud’s demonstration. These aspects relate to what the author calls the “aggregative structure” and the “transaction structure” of macro-models. We show that the former type of structure plays a central role in the emergence of unemployment in the “Economics of Keynes”, while the latter type of structure explains why unemployment is “involuntary”.

The purpose of this paper is to provide an analysis of the impact the Unemployment–Vacancy (UV) curve (or Beveridge curve) had on economic theory and to provide an account of the subsequent radical changes in its place and role over the decades since its first appearance in 1958. The paper traces the historical development of the UV curve and argues that the role of the UV curve has changed from that of a measuring device, to a graphical representation of full employment, to an axiom necessary for matching models of unemployment to a diagnostic tool. This changing role is best understood in the light of the paradigmatic change from Keynesianism to neoclassical search theory.