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This paper examines the emergence of an economic discourse separated from ethics or political philosophy. It argues that the works of Locke are a decisive moment in this process, for disclosing the existence of a sphere of the economy distinct from the sphere of the politics. Furthermore, the article suggests, contrarily to other conventional interpretations, that Locke doesn't consummate the emancipation of the economic discourse, since he approaches the economic sphere on the basis of moral principles.

This paper studies life cycle creativity among Nobel laureate economists. We identify two distinct life cycles of scholarly creativity. Experimental innovators work inductively, accumulating knowledge from experience. Conceptual innovators work deductively, applying abstract principles. We find that conceptual innovators do their most important work earlier in their careers than experimental laureates. For instance, our estimates imply that the probability that the most conceptual laureate publishes his single best work peaks at age 25 compared to the mid-50s for the most experimental laureate. Thus while experience benefits experimental innovators, newness to a field benefits conceptual innovators.

Martin Stuart ("Marty") Feldstein, currently George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, Inc. (NBER), is an American economist who has made important contributions to public finance, macroeconomics, international economics, social insurance, health economics, the economics of national security, and many other fields of economics, trained a large number of prominent economists, served as President of the National Bureau of Economic Research for some thirty years, and served as President Ronald Reagan's chief economic advisor.

The 2014 John Bates Clark Medal of the American Economic Association was awarded to Matthew Gentzkow of the University of Chicago Booth School of Business. The citation recognized Matt's “fundamental contributions to our understanding of the economic forces driving the creation of media products, the changing nature and role of media in the digital environment, and the effect of media on education and civic engagement.” In addition to his work on the media, Matt has made a number of significant contributions to empirical industrial organization more broadly, as well as to applied economic theory. In this essay, I highlight some of these contributions.

This paper is a review about the book ‘Stress Test: Reflections on Financial Crises’ by Timothy Geithner. The book mainly discusses the policy decisions and implications of T. Geithner during his job as New York FED president and US-Treasury secretary under president Obama. The book reveals some hidden information about the decision-making process in both institutions. But it lacks a scientific foundation in order to explain the financial crisis in more detail. Hence, I think the book is less convincing than recognized in public. No doubt, Geithner crisis response deserves appreciation especially the ‘Stress Test’. However, the overall book does not demonstrate that the response is sustainable in the long run and scientifically sound. Consequently, it is more a book on public policy and governance than economics.Keywords. Financial Crisis, Regulation, Cause of Financial Bubbles.JEL.A30, B31, E58, E61, G18, G38.

From a very young age till the last days of his life, Stanislaw Staszic was occupied by the question of the relationship between God and Nature. In particular, the Polish thinker was interested in the vision of the world in which human life and Nature were seen in unison, in accordance with laws of reason and the outcomes of scientific investigations. His deliberations on Nature validated his monistic worldview, encompassed within a deistic general framework. Staszic pointed out many times that natural order is the creation of God, however, earthly issues are in the hands of humans. In the last years of his life he withdrew from God. He did not accept the Church’s hierarchy, while his approach to the Creator was ambivalent.

espanolF. A. Hayek visito Chile en dos ocasiones, en 1977 y 1981. Ambas visitas fueron polemicas. En su primer viaje se reunio con Pinochet. Esto dio pie para que se especulara en torno a su influencia en la Constitucion de 1980. Despues de cada visita Hayek se quejo porque la prensa extranjera no entregaba una imagen justa de la situacion economica. Este articulo, basado en archivos, periodicos, revistas, entrevistas y publicaciones recientes, da cuenta de las circunstancias y los detalles de ambas visitas de Hayek a Chile y su influencia. EnglishF. A. Hayek visited Chile twice, in 1977 and 1981. Both visits were polemical. On the first trip he met with Augusto Pinochet. This led to some speculations about his influence on the Constitution of 1980. After each visit, Hayek complained that the western press did not provide a fair picture of the economic situation. Drawing on archival material, newspapers, magazines, interviews, and recent research, this essay provides a full account of the circumstances and details of Hayek’s visits to Chile and his influence.

It is impossible in a few pages to even touch on the impact Gary Becker had on economics and public policy. Becker was a pioneer whose work spanned many fields, most of which he was responsible for creating. His imagination was limitless, and he applied economics to areas that few would have thought feasible, providing insight, innovation, and reason in every direction he went. Milton Friedman described him as the most important social scientist of the second half of the twentieth century, and the description is not an overstatement. Becker was more than an economist. He was a social thinker who could bring logic to any subject, no matter how unapproachable. It is for that reason that he had such an important impact on public policy. Becker’s seemingly heretical work often reversed stereotypic thoughts and provided approaches to public policy that were not only novel—they were correct. Based on economic theory and empirical analyses that backed it up, Becker provided prescriptions that were both practical and welfare enhancing. Above all, Becker was a scholar in the finest sense of the word, who believed in economics and its power to explain the world. The ultimate economic imperialist, Becker’s real-world orientation gave us new ways to think about economics and its application to policy. 1

This article traces the complex intellectual path of Olivier Blanchard, a personification of the controversial evolution of macroeconomic research over the last three decades. After contributing to consolidation of the core of mainstream macroeconomics, Blanchard recently suggested ‘rethinking’ some of its key aspects to take stock of the lessons of the 2008 Great Recession, which he witnessed as the International Monetary Fund’s Chief Economist. This welcome discussion, which according to Blanchard should open mainstream macroeconomics to heterodox thinking, has so far produced a certainly interesting albeit theoretically contradictory synthesis and limited policy consequences. The most paradigmatic aspect of this rethinking of macroeconomics is represented by the abandonment in teaching of aggregate supply and demand in favor of a revival of the IS–LM model complemented by the Phillips curve. While this change of perspective does allow for the instability of ‘natural’ equilibrium to be emphasized, a deeper reading may prove incompatible with the neoclassical foundations of the mainstream approach.

On the grounds of the libertarian ethics presented by Murray N. Rothbard, the state is an institution which acts against individuals and whole societies. The state steals money from its citizens (taxes), stands in the way of free market development and controls the economy, thus hindering entrepreneurship. Besides that, the state – through its rules and regulations – limits every man's right to make moral choices. The state is an immoral institution, therefore its citizens have the right to refuse to pay taxes, follow orders, and even – in some circumstances – corrupt civil servants. In this paper we analyse Rothbard’s ethics and look into the arguments of critics of libertarian thought. Practical social and economic solutions that emerge from Rothbard’s point of view are also considered.

Irma Adelman was born in Czernowitz, Romania, in March of 1930. Her father was a Jewish businessman with socialist leanings, and although her mother was educated to be a lawyer, she never practiced and thus concentrated her energies on her only daughter, Irma. Despite Irma’s Jewish background, she was educated by French Catholic nuns, and her family lived in affluence in her early life. It was not long before her family encountered anti-Semitism and discrimination in the late 1930s, her father foresaw the dark shadow of World War II, and the family immigrated to Palestine in 1939. Irma attended high school in Palestine and also fought in the Israeli war of independence. After the war, she immigrated to the United States, where she enrolled as an undergraduate at the University of California, Berkeley (UC Berkeley), as a business administration major. Soon after her arrival at Berkeley, she met and married her husband, an American physics PhD candidate. They decided to settle in the United States and had one son, Alex. After her undergraduate studies, Irma enrolled at UC Berkeley as a PhD student in economics. Given her strong quantitative skills, she benefited from training by Robert Dorfman in mathematical models in economics and from courses in econometrics and statistics offered by George Kuznets in the Department of Agricultural Economics. Her classmates in Kuznets's courses included Arnold Zellner, Zvi Griliches, and Yair Mundlak. After graduating at the top of her class in 1955, Irma faced considerable difficulties in landing a tenure-track academic position, which was typical of the discrimination against professional women at the time. She held various nontenure appointments at UC Berkeley, at Mills College, and at Stanford for several years. During this period, she published her first book ( Adelman & Morris 1973 ), the classic Klein-Goldberger paper ( Adelman & Adelman 1959 ), and the pathbreaking hedonic pricing paper ( Adelman & Griliches 1961 ), as well as many other publications in leading journals. Yet she was still unable to land a tenure-track position in the Bay Area. She and her husband decided to relocate due to her husband’s job offer, and thus she moved to Washington, DC, where she obtained a regular associate professorship at John Hopkins University. There she also met Cynthia Taft Morris, who would later become a lifelong friend and collaborator. While in Washington, DC, she became acquainted with agencies such as USAID and the World Bank. In 1966, she moved to Chicago for a position at Northwestern University, where she stayed until 1971. In 1973, she joined the World Bank along with having a professorship at the University of Maryland. From Maryland, in 1979 she returned to UC Berkeley’s Department of Agricultural Economics, where she stayed until her early retirement in 1995. She has been a professor emeritus of the Graduate School ever since.

The letter, dated 14 September 1956, starts a decade long correspondence between Franco Modigliani and Paolo Sylos Labini. Here Modigliani discusses at length a first draft of Sylos Labini’s book on oligopoly theory. Differently from Modigliani’s well known 1958 review of the book, Modigliani focuses here not mainly on the structure of oligopoly industries, but especially on the macroeconomic implications of Sylos Labini’s model. The letter is reproduced with Sylos Labini’s annotated comments on Modigliani’s remarks. Keywords: Macroeconomic theory, Oligopoly, Neoclassical synthesis, Modigliani, Sylos Labini JEL codes: B31, D43, E13, PSL Quarterly Review, V. 67, N. 270 (2014)

The Lewis (1954) model of economic development is one of the rare 60 year-old papers still featured on many graduate economics reading lists. However, like many classics, the original paper, “Economic Development with Unlimited Supplies of Labor,” is probably read less frequently than it is cited. There are numerous commentaries and glosses available that save readers the trouble of wrestling with the original—even though Lewis’s writing was lucid and engaging. In particular, many development textbooks offer verbal or graphic summaries of the Lewis model, but the summaries often lose the richness of the original. Lewis’s (1954) paper bundles together theories of growth, structural transformation, inequality and distribution, wage determination, and population. The proliferation of ideas in the Lewis paper was not an accident. Lewis (p. 139) telegraphed his intention in the first paragraph of the paper, where he wrote: “This essay is written in the classical tradition, making the classical assumption, and asking the classical question. The classics, from Smith to Marx, all assumed, or argued, that an unlimited supply of labour was available at subsistence wages. They then inquired how production grows through time. They found the answer in capital accumulation, which they explained in terms of their analysis of the distribution of income. Classical systems thus determined simultaneously income distribution and income growth, with the relative prices of commodities as a minor by-product.” This paper was not a modest undertaking, and Lewis himself clearly viewed it as a major contribution.

La question de la population dans l’œuvre de Jean-Baptiste Say est un theme tres peu aborde par la litterature secondaire. Les quelques travaux existants se limitent a mentionner certains elements theoriques de l’auteur dans des etudes globales de la question. Ce faisant, aucune approche n’etudie reellement la maniere dont la theorie de la population de Say est liee aux principaux elements de sa theorie economique. Pourtant, cette etude s’avere fondamentale pour comprendre les differences de sa theorie de la population de celle de Thomas Robert Malthus qui fait reference en la matiere.

Raj Chetty is eminently deserving of being awarded the John Bates Clark Medal at the age of 33. His research has transformed the field of public economics. His work is motivated by important public policy issues in the fields of taxation, social insurance, and public spending for education. He approaches his subjects with a creative redefinition of the problems that he studies, and his empirical methods often draw on experimental evidence or unprecedentedly large sets of integrated data. While his work is founded on basic microeconomics, he modifies this framework to take into account behavioral and institutional considerations. Chetty is a prolific scholar. It is difficult to summarize all of Chetty's research or even to capture the details of his most significant papers. I have therefore chosen a selection of Chetty's important papers dealing with taxation, social insurance, and education that contributed to his selection as the winner of the John Bates Clark Medal.

This article analyses Adam Smith's views on monopoly by focusing on Book IV and V of The Wealth of Nations. It argues that the majority of scholars have assessed Smith's analysis of monopoly starting from premises different from those, actually though implicitly, used by Smith. We show that Smith makes use of the word 'monopoly' to refer to a heterogeneous collection of market outcomes, besides that of a single seller market, and that Smith's account of monopolists' behaviour is richer than that provided by later theorists. We also show that Smith was aware of the growth-retarding effect of monopoly and urged State regulation. © 2014 Scottish Economic Society.

Stanislaw Glabinski (1862-1941), professor of Lviv University and the author of the two-volume ‘National Economics (‘Ekonomika narodowa’), was one of the main representatives of the historical-national approach in Polish economics. The study of national economics which he created was divided into general economics, i.e. economic theory, and practical economics, referred to as economic and social policies. Glabinski emphasizes that there is a close relationship between the latter and ethics. Before the development of economic theory, economic thought was normative, because of its close relationship to ethics. However, it was not the history of economic theory, but the history of the notion of economic politics and of its practical application. Due to the social nature of ethics, there are also specific relations between it and theoretical economics. In modern countries finding a solution to the so-called social question has become a common task of economics and ethics. Ethical topics are also contained in the content of the category ‘social resources’, in which the social determinants of human economic activity find their fullest reflection. This applies in particular to the category of moral resources, which illustrates the functioning of state bodies and public institutions, the state of education, the prevailing habits and the customs and the character of the nation.

One of the main concerns of Tony Blair’s policy and his New Labour Party agenda was focused on the values which always played a fundamental role within the British labour tradition. According to Blair, the policy is a matter of values, among which he points to social justice, international solidarity, democracy and freedom. All of them have always sketched the moral stricture of the traditional program of social democracy. The list of those values he completes with the following new ones: a civil society, equal value of all people, equal chances, patriotism and well-being. Blair’s political project, called the third way, was planned to bring about the country’s modernization in the face of rapid global changes. The basic purpose of the article is to present the place of the value system within the program of the British New Labour Party. New Labour axiology was supposed to play a fundamental role not only within the concept of society, but also infiltrate all spheres of political and economical life.

The article introduces the special issue on Paolo Sylos Labini's contributions published in "Astrolabio", the Italian review founded and edited by Ferruccio Parri in 1963. The editor, guest editor of the current issue, explains the rationale of his selection of articles and discusses the different papers both in a historial perspective and in comparison to the contemporary Italian context.

Introducing the publication of a long 1956 letter by Franco Modigliani (FM) to Paolo Sylos Labini (PSL) on the draft of PSL's book, Oligopoly and Technical Progress, the paper critically reviews the theoretical background of FM's comments, showing how the pre-Keynesian roots dominate the so-called neoclassical synthesis as well as its shaky foundations. The paper also discusses FM's interpretation of PSL's oligopoly theory, as well as their collaboration (and differences) on policy issues, such as their opposition to the 100% money wage indexation adopted in Italy from the mid-1970s to the mid-1980s.

A láthatatlan kéz Adam Smith nyomán a közgazdaságtan legismertebb metaforája lett, de jelentősége és értelmezése máig megosztja a közgazdászokat és eszmetörténészeket. Az interpretációk skálája rendkívül széles: mértékadó közgazdászok szerint ez a közgazdaságtan alapeszméje, míg mások Smith ironikus tréfájának vélik. A tanulmány áttekinti a láthatatlan kéz Smith előtti használatát teológiai, politikai és irodalmi szövegekben és a hozzájuk kapcsolódó interpretációkat. Ezt követően bemutatja, hogyan alkalmazta Smith a nevezetes kifejezést a merkantilista politika ironikus és paradox kritikájaként, és miként került a 19. század végétől e metafora a Smith-olvasatokban központi helyre, majd miként vált kérdésessé ez a felfogás a 2008-as válság nyomán. Journal of Economic Literature (JEL) kód: B10, B11, B12, B15, B19, B20, B31., Adam Smiths phrase the invisible hand has become the best-known metaphor in economics, yet both its interpretation and its relevance are hotly debated by economists and intellectual historians. The range of opinions is wide: several leading economists view it as the founding idea in economics and social studies, some historians see it as an ironic jest by Smith. The study surveys the different uses of the metaphor in theological, political and literary texts before Smith and reconstructs the invisible hand" passage in The Wealth of Nations as an ironic and paradoxical critique of mercantilist policy. A vast literature has emerged since the late 19th century treating the metaphor in various way, ranging from the description and justification of free markets to the claim that it is a purely fictitious mechanism. The critical approach to it has become stronger since the great recession of 2008.

The letter, dated 14 September 1956, starts a decade long correspondence between Franco Modigliani and Paolo Sylos Labini. Here Modigliani discusses at length a first draft of Sylos Labini’s book on oligopoly theory. Differently from Modigliani’s well known 1958 review of the book, Modigliani focuses here not mainly on the structure of oligopoly industries, but especially on the macroeconomic implications of Sylos Labini’s model. The letter is reproduced with Sylos Labini’s annotated comments on Modigliani’s remarks.

Few problems in decision theory have raised more persisting interest than the Allais paradox. It appears that sufficiently many brilliant works have addressed it from within decision theory proper for history and philosophy of science now to enter the stage. In its historical side, the paper recounts the paradox as it arose, i.e., in 1952, at a Paris conference attended by the main decision theorists of the time. They had drawn renewed confidence in expected utility theory (eut) from the way von Neumann and Morgenstern had axiomatized it in 1947, and Allais devised his puzzle precisely to shaken their confidence. The issues between the two camps were normative, but they became lost in the developments of the 1980s that belatedly brought fame to the « Allais paradox ». These works restricted the paradox to be a straightforward empirical refutation, turning it into a stake of also exclusively empirically oriented non-eu theories. In its philosophical vein, the paper tries to evaluate this shift of interpretation. To an extent, decision theorists were right because their experimental work was thus freed from a major complication and amenable to illuminating results: eut was empirically refuted, the independence axiom of von Neumann and Morgenstern was the main culprit, and the next theoretical stage was to modify this axiom appropriately. However, they were also wrong in not addressing an essential feature of their field: i.e., that observed behaviour is informative only if agents are prepared to endorse it reflectingly, i.e., to endow it with some normative value. As reconstructed here, Allais meant to reserve choice experiments to rational subjects, who were either selected at the outset, or identified as such by the experimental results. The paper tries to flesh out Allais’s intuitions by turning to by now little known works of the 1970s, which under his influence provided experimental renderings of rationality, and it eventually suggests that decision theory might diversify its methods by taking inspiration from these original attempts. Classification JEL : B21, B31, B41, C91, D81

This paper provides a short history of family allowances and documents the fact that Keynes supported family allowances as early as the 1920s, continuing through the 1930s and early 1940s. Keynes saw this policy as a way to help households raise their children and also as a way to increase consumption without reducing business investment. The paper goes on to argue that a policy of family allowances is consistent with Keynesian economics. Finally, the paper uses the Luxembourg Income Study to estimate the impact of family allowances on child poverty in several developed nations and estimates the poverty-reducing impact of several possible family allowance programs for the US.

Published version of an article in the journal: Econ Journal Watch. Also available from the publisher at: http://econjwatch.org/articles/ragnar-frisch-and-the-norwegian-postwar-economy. Open Access In the story of Norwegian economics, and of Norwegian economic policy and performance during the postwar years, a central place must be given to Ragnar Frisch (1895-1973). In 1969 he was awarded the first Nobel Prize in economics, together with Jan Tinbergen (1903-1994). In our view, the brighter parts of the story come only in the later years, and they involve the overcoming of Frisch's influence and legacy. As professor, Frisch started a grand project to establish economics as a science based on mathematical models and quantitative analysis, creating what became known as the "Oslo School." This school contributed to the development of a system of economic planning that became close to the centrally planned economies of Eastern Europe. The Norwegian postwar planned economy managed in the first three decades to achieve growth rates on par with the other countries in Western Europe. Growth was achieved, however, partly through investment ratios that were significantly higher than that of other countries; as a consequence, both private and public consumption rates were substantially lower. At the end of the 1970s the inefficiency of the planned economy impelled a change. Reform moved Norway toward a more decentralized market economy, where markets would be governed through a framework of general laws, taxes, and levies. The grand vision of Ragnar Frisch had dissolved.

The paper deals with the discussion on the alternative ideas on money, created by Silvio Gesell, Frederic Soddy and Karl Ballod. Particularly, the ideas of full-reserve banking, privilege of seigniorage and the principle of demurrage are discussed in the context of possible implementation of these ideas in a future economy. Large part of the paper is library-based, considering and briefly explaining the previously mentioned ideas, and supplementing them with the opinions of the modern economists. The discussion of the possible evolutionary way to implement those ideas is based on the logical analysis and conclusions, derived from the discussions of the author with academicians and financiers. The results lead to the conclusion that these ideas, which may seem unrealistic according the existing paradigm of growth, may turn out to be useful to form the basis of a new monetary and financial system within the new economic paradigm. The paper is an insight into unorthodox proposals on money, which may be useful to specialists and students, investigating monetary and financial systems.

The article reviews "The Collected Writings of John Maynard Keynes", on occasion of the recently published paperback edition of the photostatic reprint. The original edition made available to scholars most of Keynes’s writings and important parts of his correspondence, together with scholarly introductions and editorial notes. The availability of this material favoured the development of an important body of studies on Keynes and the economists who were at Cambridge in the interwar period. Biographical research shows that the development of Keynes’s theoretical views was far from linear. Therefore, any interpretation of Keynes’s thought cannot focus exclusively on his main writings and in particular on The General Theory. For this reason, the author proposes here a number of reading paths along the thirty-volumes strong collection, highlighting the development of Keynes' ideas and activities. JEL codes: E12, B22, B31 Keywords: Keynes, uncertainty, money, Collected Works, PSL Quarterly Review, V. 67, N. 268 (2014)

Character is commonly recognised as a crucial notion in Alfred Marshall’s thought, and more broadly in Victorian thought. However, this concept is never intrinsically defined. This paper offers an intellectual reconstruction of the notion of character in Marshall’s thought. While not denying that Marshall’s ideas evolve between his early writings and his later writings, this reconstruction focuses on the unchanged elements of his thought. This reconstruction is also an opportunity to re-examine Marshall’s conception of social ideal, on the basis of archives documents: Marshall conceives character as a complex of psychological, moral and cognitive faculties that – in a somewhat circular way – both makes sense in the light of his social ideal and serves his social ideal.

This article is a critical review of the picture drawn by Arild Sæther and Ib Eriksen (2014) of the economic policy and development of postwar Norway and of the influence exerted by Ragnar Frisch. Regarding the postwar economy the present article draws on a number of comprehensive studies by American and other scholars, and finds that the presentation in Sæther and Eriksen (2014) is seriously flawed. Also flawed is Sæther and Eriksen’s discussion related to Ragnar Frisch’s teaching and general influence. In the characterization of Frisch and to some extent of the Norwegian economists as a group the problem is not so much ignorance as ideological and moralistic bias, leading Sæther and Eriksen astray and relieved from the obligation of providing evidence for assertions, not least for defamatory ones.

Cet article a pour objet de mettre en evidence la dimension morale du marche dans l’œuvre d’Adam Smith. La premiere partie reinterprete le prix naturel comme un prix juste. La deuxieme partie montre que la concurrence libre est pour Smith un cadre institutionnel incitant les agents economiques a cultiver les vertus de prudence, d’equite, de probite, de frugalite et d’industrie. La derniere partie vise a justifier la proposition par Smith d’un taux d’usure legerement superieur au taux courant le plus bas du marche par sa philosophie morale et ses analyses du desir de reconnaissance, de l’estime de soi excessive et du mensonge a soi-meme. La conclusion souligne le lien etroit entre politique, ethique et economie chez Smith, tel qu’il ressort de cette analyse.

This paper looks at the work of Gary S. Becker, American economist, professor of sociology, friend, and colleague of Kevin M. Murphy. Murphy discusses the traditional approach of Becker's teaching and ideas as they were expressed through his wealth of content and style in course design; his discussions on the role of preferences, technology, and constraints as they influence household production; and his emphasis on the importance of markets and desire for more. Murphy recognizes Becker's teaching style as groundbreaking, unapologetic, and pure economics.

This paper is a contribution to a symposium mutually reviewing papers on Keynes's principle of effective demand as set out in The General Theory, by Allain (2009. Effective demand and short-term adjustments in the General Theory, Review of Political Economy, vol. 21, 1–22), Hartwig (2007. Keynes vs. the Post Keynesians on the principle of effective demand, European Journal of the History of Economic Thought, vol. 14, 725–39), and Hayes (2007. The point of effective demand, Review of Political Economy, 19 (1), 55–80). The purpose of the symposium was to address some key differences of interpretation that continue to undermine the reception of Keynes's central idea.

Based on the new way of studying the work of Adam Smith in greater depth, with greater attention being paid to the use and context of his language, this investigation examines the theory of competitive exchange described in The Wealth of Nations, with the aim of bringing new contributions to the field of decision-making beyond the utilitarian theoretical framework. We have found an exchange process with principles of behaviour that are very different to those described in the traditional literature, principally through the leading role of both the cognitive process of decision-making, and of institutions. This work concludes that natural price is a rule of equivalence that guarantees market consistency and that the cognitive process of its participants is described as a mechanism for forming expectations based on institutions outside the market. These conclusions allow us to redefine the hypotheses of Adam Smith’s system of price determination.

Article originally published in Banca Nazionale del Lavoro Quarterly Review, vol. 19 n. 77, June 1966, pp. 99-120. The work provides a first appraisal of the contribution that econometric models can make to long-run economic policy. Rather than a detailed exposition or critique of the individual models, a more general analysis is provided. The author first outlines the econometric models considered, all of which provide a more or less accurate description of the state of the economic system in some future moment of time. In order to appraise the reliability of the information provided by the models their main relationships are examined from the point of view of their simultaneous working in the context of the whole model. Finally, the author examines what utility the more or less reliable information provided by formal models purporting to represent the hypothetical or desired situation of the economy at a certain date can have for economic policy decisions. The author concludes that there is no available econometric model from which reliable and useful information can be obtained for planning and for economic policy. Moreover, no reliable and useful indication is ever likely to be obtained from so-called consistency models. JEL Codes: C52, C01, B31, PSL Quarterly Review, V. 66, N. 266 (2013)

There are four main approaches to bilateral index number theory: the fixed basket, stochastic, test, and economic approaches. The paper reviews the contributions of Irving Fisher to these approaches to index number theory, which are still in use today. The paper also reviews Fisher’s contributions to multilateral index number theory. The main themes of the paper are developed in the context of a review of the early history of index number theory: a history that conveys a wealth of information and insight into the making and use of index numbers today.

This paper presents some points of view concerning the impact of economic activity on the environment, society’s behaviour connected to resources and its correction, the preservation of life support systems, durable development policies in Nicholas Georgescu-Roegen’s theory. The great economist had tried to convince us that the problems we face are complex and serious - and we can't address them in the same way we created them. But the question is "Who wants to solve them and how?" A possible solution is the sustainable development model, which is an attempt to combine growing concerns about a range of environmental issues with socio-economic issues. In the present context we believe that the sustainable development model is one capable to improve things and, therefore, we are convinced that by applying the principle of sustainability we will be able to pass on to human society a new mobilising paradigm dedicated to those who are willing to continue in this spirit.

John Maynard Keynes made a major contribution to the development of professional investment management. Based on detailed archival research at King's College, Cambridge, we describe Keynes' investment philosophy, his investment performance, and the evolution of his investment approach as the manager of a large educational endowment. His portfolios were actively managed and unconventional. He was an investment innovator both in making a substantial allocation to the then new institutional asset class of common stocks as well as in championing value investing.

Contribution to a series of recollections and reflections on professional experiences of distinguished economists. Article originally published in vol. 39 n. 159 (1986) of Banca Nazionale del Lavoro Quarterly Review. The author, who shortly after writing this autobiographical note went on to win the Nobel Memorial Prize in Economic Sciences in 1986, draws for the title of the article from Frank Knight, to whom he declares intellectual indebtedness. He describes his academic career from the personal origins in the poor agricultural region of Tennessse, to the creation of the Thomas Jefferson Center for Studies in Political Economy. JEL Codes: B31, D71, D72, PSL Quarterly Review, V. 66, N. 264 (2013)

The whole social and economic life is based on some form of association. People live in societies, so the idea association appeared in the most natural way, at first in an unconscious form, moving later towards the conscious and organized association. Seeing that through the association they were able to defend their professional interests, fulfil their economic goals and meet their common needs, peasants adopted its formula with confidence. The ways in which the association spread were diverse. Depending on the economic, social and moral circumstances and on the habits and goals of the various masses of peasants, there have been developed mainly one of the three forms: trade unions, cooperatives, and mutuality. The peasant associations helped the rural communities everywhere and were the object of interest of many theoreticians, who sought their roots, their forms, presented their principles and analyzed their results. One of them was Professor Nicolae Ghiulea, a Romanian economist and sociologist, fervent supporter of the association idea. Nicolae Ghiulea was among the most important representatives of the cooperative doctrine of the interwar period and was well-known for his prestigious academic career. He filled several administrative and social leading functions and had a rich publishing activity in the areas of statistical theory, social economy, cooperatives and sociology. This article sets out to present his view upon the history of the peasant association, as exposed in one of his books entitled „The peasant associations”. The author focuses on the various forms of peasant associations, their history and their practical results in interwar Romania, explaining why they were beneficial. At a closer look, peasant associations are still a viable solution to many current social issues, especially those concerning agriculture.

Article originally published in Banca Nazionale del Lavoro Quarterly Review, vol. 16 n. 67, December 1963, pp. 411-420. In the ten years 1953-62, the average price level in Italy rose every year, with the exception of 1959. The present article examines the effects of this inflationary process on income distribution. To do so the author first determines the extent to which each productive sector contributed to the creation of the total surplus of money product over real product, and how such excess was distributed amongst the various income categories in each sector. Then, the losses in real purchasing power these categories suffered are examined. Finally, the net outcome between gains in money product and losses for each category is found. According to the author, the data suggests peculiarly Ricardian features: the increase in prices was largely due to a rise in rents and of sectoral incomes in which are hidden some forms of rent, in the twofold aspect of privileged positions and inefficiency. JEL Codes: P24, E25, B31, PSL Quarterly Review, V. 66, N. 266 (2013)

A Monetary History of the United States 1867 to 1960 published in 1963 was written as part of an extensive NBER research project on Money and Business Cycles started in the 1950s. The project resulted in three more books and many important articles. A Monetary History was designed to provide historical evidence for the modern quantity theory of money. The principal lessons of the modern quantity theory of the long-run neutrality of money, the transitory effects of monetary policy on real economic activity, and the importance of stable money and of monetary rules have all been absorbed in modern macro models. A Monetary History , unlike the other books, has endured the test of time and has become a classic whose reputation has grown with age. It succeeded because it was based on narrative and not an explicit model. The narrative methodology pioneered by Friedman and Schwartz and the beautifully written story still captures the imaginations of new generations of economists.

Contribution to a series of recollections and reflections on professional experiences of distinguished economists. Article originally published in vol. 39 n. 159 of Banca Nazionale del Lavoro Quarterly Review.

The paper focuses on Manoilescu’s nomination as a Professor of Economics, Organization and Rationalization at the Polytechnic School of Bucharest in 1931 and his dismissal in 1944. The biographical sources include the archives of the institution.

A tanulmány a demokrácia két közgazdaságtani elméletét mutatja be. A demokrácia klasszikus elmélete a közjó fogalmára épült: a klasszikus politikai filozófia érvelése szerint a demokrácia intézménye a közjó megvalósulásának eszköze. Schumpeter bírálta a klasszikus elméletet: a közgazdasági szemléletet alkalmazva a közjó értelmezésére leválasztotta a demokráciáról a közjó fogalmát. Schumpeter szerint a demokrácia szubsztantív felfogása nem tartható, ezért ehelyett a demok rácia procedurális értelmezését kínálta fel. Az alkotmányos közgazdaságtan nem fogadja el sem a közjó és demokrácia fogalmainak elválasztását, sem a közjó szubsz tan tív értelmezését, ehelyett a közjónak és a demokráciának egyaránt pro ce du rális értelmezését javasolja. Journal of Economic Literature (JEL) kód: B31, B41., This essay deals with two economic theories of democracy. The classical doctrine of democracy was built on the concept of the common good, classical political philosophy arguing that the institution of democracy was the instrument for realizing the common good. This theory was criticized by Schumpeter, who applied the method of modern economics to analysis of the concept, which he separated from democracy, arguing that the substantive concept of democracy was untenable, and proposing to replace it with the procedural concept of democracy. Constitutional economics does not accept such separation of the concepts of democracy and the common good, but it does not accept the substantive interpretation of the common good either. Rather, it proposes a procedural concept of both the common good and of democracy.

The paper is a to date unpublished contribution by Minsky prepared for a conference at the University of Perugia held in 1986. Minsky intended to revise it subsequently, but the paper was never published. Marcella Corsi, who had attended the 1986 conference, brought a copy to a roundtable held in Rome in September 2012. The paper attracted attention, was subsequently read by some of the roundtable participants, and it was decided to publish it. It contains Minsky's assessment of Kalecki's contribution. According to Minsky, the question of Kalecki’s priority over Keynes with respect to the construction of useable macroeconomics is of secondary importance. What is important is that both Kalecki and Keynes provide elements that are essential components for understanding the behavior of economies with complex financial structures. This is the measure of Kalecki’s greatness. In the context of the present-day debate, the paper is important for its contribution towards establishing a link between the financial and the real sides of the economy. However, it is also a useful reminder to those who, in the present-day debate, reduce Minsky’s contribution to one solely related to a theory of financial fragility providing a financial-only explanation of the recent world crisis: in Minsky’s theory as well as in recent events, financial fragility interacts with increasing inequalities in income distribution. JEL Codes: B22, E12, B31, PSL Quarterly Review, V. 66, N. 265 (2013)

Martin Feldstein interviewed Paul Volcker in Cambridge, Massachusetts, on July 10, 2013, as part of a conference at the National Bureau of Economic Research on “The First 100 Years of the Federal Reserve: The Policy Record, Lessons Learned, and Prospects for the Future.” Volcker was Chairman of the Board of Governors of the Federal Reserve System from 1979 through 1987. Before that, he served stints as President of the Federal Reserve Bank of New York from 1975 to 1979, as Deputy Undersecretary for International Affairs in the US Department of the Treasury from 1969 to 1974, as Deputy Undersecretary for Monetary Affairs in the Treasury from 1963 to 1965, and as an economist at the Federal Reserve Bank of New York from 1952 to 1957. He has led and served on a wide array of commissions, including chairing the President's Economic Recovery Advisory Board from its inception in 2009 through 2011.

Destutt de Tracy’s value theory is examined here in its relations to labor. This theory is original in that it has two concepts of value, one being natural, the other, conventional. Both are linked to labor, deemed to be any productive activity and the sole origin of any production, but in two quite different ways. This twovalue theory leads to contradictions, is but one example of a general proposition of ideology, that social conventions have their origin in the inner constitution of man.