Macroeconomics and the History of Economic Thought The essays in this Festschrift have been chosen to honour Harald Hagemann and his scientific work They reflect his main contributions to economic research and his major fields of interest The book is subdivided into three parts The essays in the first part deal with various aspects within the history of economic thought All reflect Hagemann’s interest in the question of how economic knowledge and ideas migrate between countries (mainly through émigrés) and in time (by studying the history of ideas) New aspects of the lives and works of well-known and lesser-known economists are presented by excellent historians of economic thought Some essays are related to economic debates of the inter-war period, reflecting Hagemann’s research focus on the years of high theory, especially in the field of business cycle theory The second part is about the current state of macroeconomics, which is critically examined in many of the essays Several of them relate to the global financial crisis, and discuss why the current consensus view in macroeconomics faces fundamental problems in understanding its causes and consequences, in contrast to earlier economists such as Irving Fisher and John Maynard Keynes Further essays set the focus on the problems of money illusion and understanding inflation The essays in the third part of the book cover topics on economic growth and structural dynamics Most of them look at the Schumpeterian triangle of innovation, competition and institutions from different perspectives, dealing with such topical issues as the emergence of new sectors, market definition in technologically dynamic systems, innovation strategies in global manufacturing, offshore outsourcing and the consequences of soft budget constraints Hagen M Krämer is Professor of Economics at the Karlsruhe University of Applied Sciences, Germany Heinz D Kurz is Professor of Economics at the University of Graz, Austria Hans-Michael Trautwein is Professor of International Economics at the Carl von Ossietzky University of Oldenburg, Germany Routledge studies in the history of economics Economics as Literature Willie Henderson Socialism and Marginalism in Economics 1870–1930 Edited by Ian Steedman Hayek’s Political Economy The socio-economics of order Steve Fleetwood On the Origins of Classical Economics Distribution and value from William Petty to Adam Smith Tony Aspromourgos The Economics of Joan Robinson Edited by Maria Cristina Marcuzzo, Luigi Pasinetti and Alesandro Roncaglia The Evolutionist Economics of Léon Walras Albert Jolink Keynes and the ‘Classics’ A study in language, epistemology and mistaken identities Michel Verdon The History of Game Theory, Volume From the beginnings to 1945 Robert W Dimand and Mary Ann Dimand The Economics of W S Jevons Sandra Peart 10 Gandhi’s Economic Thought Ajit K Dasgupta 11 Equilibrium and Economic Theory Edited by Giovanni Caravale 12 Austrian Economics in Debate Edited by Willem Keizer, Bert Tieben and Rudy van Zijp 13 Ancient Economic Thought Edited by B B Price 14 The Political Economy of Social Credit and Guild Socialism Frances Hutchinson and Brian Burkitt 15 Economic Careers Economics and economists in Britain 1930–1970 Keith Tribe 16 Understanding ‘Classical’ Economics Studies in the long-period theory Heinz Kurz and Neri Salvadori 17 History of Environmental Economic Thought E Kula 18 Economic Thought in Communist and Post-Communist Europe Edited by Hans-Jürgen Wagener 19 Studies in the History of French Political Economy From Bodin to Walras Edited by Gilbert Faccarello 20 The Economics of John Rae Edited by O F Hamouda, C Lee and D Mair 21 Keynes and the Neoclassical Synthesis Einsteinian versus Newtonian macroeconomics Teodoro Dario Togati 22 Historical Perspectives on Macroeconomics Sixty years after the ‘General Theory’ Edited by Philippe Fontaine and Albert Jolink 23 The Founding of Institutional Economics The leisure class and sovereignty Edited by Warren J Samuels 24 Evolution of Austrian Economics From Menger to Lachmann Sandye Gloria 25 Marx’s Concept of Money The God of Commodities Anitra Nelson 26 The Economics of James Steuart Edited by Ramón Tortajada 27 The Development of Economics in Europe since 1945 Edited by A W Bob Coats 28 The Canon in the History of Economics Critical essays Edited by Michalis Psalidopoulos 29 Money and Growth Selected papers of Allyn Abbott Young Edited by Perry G Mehrling and Roger J Sandilands 30 The Social Economics of Jean-Baptiste Say Markets and virtue Evelyn L Forget 31 The Foundations of Laissez-Faire The economics of Pierre de Boisguilbert Gilbert Faccarello 32 John Ruskin’s Political Economy Willie Henderson 33 Contributions to the History of Economic Thought Essays in honour of R D C Black Edited by Antoin E Murphy and Renee Prendergast 34 Towards an Unknown Marx A commentary on the manuscripts of 1861–63 Enrique Dussel 35 Economics and Interdisciplinary Exchange Edited by Guido Erreygers 36 Economics as the Art of Thought Essays in memory of G L S Shackle Edited by Stephen F Frowen and Peter Earl 37 The Decline of Ricardian Economics Politics and economics in post-Ricardian theory Susan Pashkoff 38 Piero Sraffa His life, thought and cultural heritage Alessandro Roncaglia 39 Equilibrium and Disequilibrium in Economic Theory The Marshall–Walras divide Michel de Vroey 40 The German Historical School The historical and ethical approach to economics Edited by Yuichi Shionoya 41 Reflections on the Classical Canon in Economics Essays in honour of Samuel Hollander Edited by Sandra Peart and Evelyn Forget 42 Piero Sraffa’s Political Economy A centenary estimate Edited by Terenzio Cozzi and Roberto Marchionatti 43 The Contribution of Joseph Schumpeter to Economics Economic development and institutional change Richard Arena and Cecile Dangel 44 On the Development of Long-run Neo-classical Theory Tom Kompas 45 F A Hayek as a Political Economist Economic analysis and values Edited by Jack Birner, Pierre Garrouste and Thierry Aimar 46 Pareto, Economics and Society The mechanical analogy Michael McLure 47 The Cambridge Controversies in Capital Theory A study in the logic of theory development Jack Birner 48 Economics Broadly Considered Essays in honour of Warren J Samuels Edited by Steven G Medema, Jeff Biddle and John B Davis 49 Physicians and Political Economy Six studies of the work of doctor-economists Edited by Peter Groenewegen 50 The Spread of Political Economy and the Professionalisation of Economists Economic societies in Europe, America and Japan in the nineteenth century Massimo Augello and Marco Guidi 51 Historians of Economics and Economic Thought The construction of disciplinary memory Steven G Medema and Warren J Samuels 52 Competing Economic Theories Essays in memory of Giovanni Caravale Sergio Nisticò and Domenico Tosato 53 Economic Thought and Policy in Less Developed Europe The nineteenth century Edited by Michalis Psalidopoulos and Maria-Eugenia Almedia Mata 54 Family Fictions and Family Facts Harriet Martineau, Adolphe Quetelet and the population question in England 1798–1859 Brian Cooper 55 Eighteenth-Century Economics Peter Groenewegen 56 The Rise of Political Economy in the Scottish Enlightenment Edited by Tatsuya Sakamoto and Hideo Tanaka 57 Classics and Moderns in Economics, Volume I Essays on nineteenth and twentieth century economic thought Peter Groenewegen 58 Classics and Moderns in Economics, Volume II Essays on nineteenth and twentieth century economic thought Peter Groenewegen 59 Marshall’s Evolutionary Economics Tiziano Raffaelli 60 Money, Time and Rationality in Max Weber Austrian connections Stephen D Parsons 61 Classical Macroeconomics Some modern variations and distortions James C W Ahiakpor 62 The Historical School of Economics in England and Japan Tamotsu Nishizawa 63 Classical Economics and Modern Theory Studies in long-period analysis Heinz D Kurz and Neri Salvadori 64 A Bibliography of Female Economic Thought to 1940 Kirsten K Madden, Janet A Sietz and Michele Pujol 65 Economics, Economists and Expectations From microfoundations to macroeconomics Warren Young, Robert Leeson and William Darity Jnr 66 The Political Economy of Public Finance in Britain, 1767–1873 Takuo Dome 67 Essays in the History of Economics Warren J Samuels, Willie Henderson, Kirk D Johnson and Marianne Johnson 68 History and Political Economy Essays in honour of P D Groenewegen Edited by Tony Aspromourgos and John Lodewijks 69 The Tradition of Free Trade Lars Magnusson 70 Evolution of the Market Process Austrian and Swedish economics Edited by Michel Bellet, Sandye Gloria-Palermo and Abdallah Zouache 71 Consumption as an Investment The fear of goods from Hesiod to Adam Smith Cosimo Perrotta 72 Jean-Baptiste Say and the Classical Canon in Economics The British connection in French classicism Samuel Hollander 73 Knut Wicksell on Poverty No place is too exalted Knut Wicksell 74 Economists in Cambridge A study through their correspondence 1907–1946 Edited by M C Marcuzzo and A Rosselli 75 The Experiment in the History of Economics Edited by Philippe Fontaine and Robert Leonard 76 At the Origins of Mathematical Economics The Economics of A N Isnard (1748–1803) Richard van den Berg 77 Money and Exchange Folktales and reality Sasan Fayazmanesh 78 Economic Development and Social Change Historical roots and modern perspectives George Stathakis and Gianni Vaggi 79 Ethical Codes and Income Distribution A study of John Bates Clark and Thorstein Veblen Guglielmo Forges Davanzati 80 Evaluating Adam Smith Creating the wealth of nations Willie Henderson 81 Civil Happiness Economics and human flourishing in historical perspective Luigino Bruni 82 New Voices on Adam Smith Edited by Leonidas Montes and Eric Schliesser 83 Making Chicago Price Theory Milton Friedman–George Stigler correspondence, 1945–1957 Edited by J Daniel Hammond and Claire H Hammond 84 William Stanley Jevons and the Cutting Edge of Economics Bert Mosselmans 85 A History of Econometrics in France From nature to models Philippe Le Gall 86 Money and Markets A doctrinal approach Edited by Alberto Giacomin and Maria Cristina Marcuzzo 87 Considerations on the Fundamental Principles of Pure Political Economy Vilfredo Pareto (Edited by Roberto Marchionatti and Fiorenzo Mornati) 88 The Years of High Econometrics A short history of the generation that reinvented economics Francisco Louỗó 89 David Humes Political Economy Edited by Carl Wennerlind and Margaret Schabas 90 Interpreting Classical Economics Studies in long-period analysis Heinz D Kurz and Neri Salvadori 91 Keynes’s Vision Why the great depression did not return John Philip Jones 92 Monetary Theory in Retrospect The selected essays of Filippo Cesarano Filippo Cesarano 93 Keynes’s Theoretical Development From the tract to the general theory Toshiaki Hirai 94 Leading Contemporary Economists Economics at the cutting edge Edited by Steven Pressman 95 The Science of Wealth Adam Smith and the framing of political economy Tony Aspromourgos 96 Capital, Time and Transitional Dynamics Edited by Harald Hagemann and Roberto Scazzieri 97 New Essays on Pareto’s Economic Theory Edited by Luigino Bruni and Aldo Montesano 98 Frank Knight & the Chicago School in American Economics Aldershot 1993: Edward Elgar, 89–107 ‘Hicks’ neo-wicksellianischer Ansatz in der Geldtheorie’ (Hicks’s neo-Wicksellian Approach in Monetary Theory), in: H.J Stadermann and O Steiger (eds), Der Stand und die nächste Zukunft der Geldforschung, Festschrift for Hajo Riese, Berlin 1993: Duncker and Humblot, 165–174 ‘Irving Fisher – Genialer Ökonom und “komischer Kauz” ’ (Irving Fisher: Genius and ‘Crank’), in: WISU, 22(5) (1993): 425–428 ‘Traverse Analysis in a Postclassical Model’, in: J Halevi, D Laibman and E.J Nell (eds),Beyond the Steady State: A Revival of Growth Theory, London 1992: Macmillan, 235–263 ‘Hicks on the European Monetary System, Kyklos, 44 (1991): 411–429 (with O.F Hamouda) ‘Learned Journals and the Professionalization of Economics: The German Language Area’,Economic Notes, Special Volume, ed Axel Leijonhufvud, 20 (1991): 33–57 ‘A Kaldorian Saving Function in a Twosectoral Linear Growth Model’, in: E.J Nell and W Semmler (eds),Nicholas Kaldor and Mainstream Economics Confrontation or Convergence?, London 1991: Macmillan, 449–468 ‘Schweden – Modell Paradox?’, in: P Spahn (ed.), Wirtschaftspolitische Strategien Probleme ökonomischer Stabilität und Entwicklung in Industrieländern und der Europäischen Gemeinschaft, Regensburg 1990: Transfer, 247–282 (with H.M Trautwein) ‘The Structural Theory of Economic Growth’, in: M Baranzini and R Scazzieri (eds),The Economic Theory of Structure and Change, Cambridge 1990: Cambridge University Press, 144–171 ‘Nicholas Johannsen and Keynes’ Finance Motive’,Journal of Institutional and Theoretical Economics, 146 (1990): 445–469 (with C Rühl) ‘Balancing Freedom and Order On Adolph Lowe’s Political Economics’, Social Research, 57 (1990): 733–753 (with H.D Kurz) ‘Akkumulation, neue Technologien und Beschäftigung: Zu den quantitativen und qualitativen Beschäftigungswirkungen des technischen Fortschritts bei Adam Smith’ (Accumulation, New Technologies and Employment: On the Quantitative and Qualitative Employment Effects of Technical Progress in Adam Smith), in: H.D Kurz (eds),Adam Smith (1723–1790) – Ein Werk und seine Wirkungsgeschichte, Marburg 1990: Metropolis, 153–174 Neisser’s ‘Wage Rate and Employment in Market Equilibrium: An Introduction’,Structural Change and Economic Dynamics, (1990): 133–139 ‘Schwedens wirtschaftliche Entwicklung seit den frühen siebziger Jahren’ (Sweden’s Economic Development since the Early 1970s), Institut für Volkswirtschaftslehre der Universität Hohenheim, Discussion Paper No 51, Stuttgart 1989 ‘Lohnhöhe und Beschäftigung in Keynesscher Sicht’ (Wages and Employment in Keynes), in: H Hagemann and O Steiger (eds), Keynes’ General Theory nach fünfzig Jahren, Berlin 1988: Duncker & Humblot, 183–213 ‘Nicholas Johannsen’s Early Analysis of the Saving–Investment Process and the Multiplier’,Studi Economici, 42 (1987): 99–143 (with C Rühl) ‘Internal Rate of Return’, in: J Eatwellet al., The New Palgrave, Vol 2, London 1987; reprinted in: J Eatwell et al (eds), Capital Theory, London 1990: 195–199 and in: J Eatwell, M Milgate and P Newman (eds),The New Palgrave Dictionary of Money and Finance, Vol 2, London 1992: Macmillan, 446–448 ‘Capital Goods’, in: J Eatwell, M Milgate and P Newman (eds),The New Palgrave A Dictionary of Economics, Vol 1, London 1987: Macmillan; reprinted in: J Eatwell et al (eds), Capital Theory, London 1990, 123–127 ‘Lord Keynes, waren Sie ein Neuklassiker?’ in: E Hödl and G Müller (eds),Die Neoklassik und ihre Kritik, Frankfurt am Main and New York, NY 1986, 210–243 ‘Technological Change and Employment in Advanced Industrial Countries The Case of the Federal Republic of Germany Some Preliminary Considerations on a Dynamic Input–Output Study of Displacement and Reabsorption Effects’, Paper prepared for the International Colloquium on Structural Change and New Technology, University of Manchester, September 1985 (with D Kattermann and H.D Kurz) ‘Freisetzungs- und Kompensationseffekte neuer Technologien: Zur Gefahr einer technologischen Arbeitslosigkeit’ (Displacement and Compensation Effects of New Technologies: the Danger of Technological Unemployment), in: F Buttler, J Kühl and B.Rahmann (eds), Staat und Beschäftigung Angebots- und Nachfragepolitik in Theorie und Praxis, Beiträge zur Arbeitsmarkt- und Berufsforschung, Vol 88, Nuremberg 1985, 291–335 ‘Neue Technologien, Beschäftigung und Arbeitsmarkt’ (New Technologies, Employment and the Labour Market),Diskurs, Vol 10: Arbeit und Technik, 1985: 69–109 (with P Kalmbach) ‘Lohnsenkungen als Mittel der Krisenbekämpfung? Überlegungen zum Beitrag der “Kieler Schule” in der beschäftigungspolitischen Diskussion am Ende der Weimarer Republik’, in: H Hagemann and H.D Kurz (eds),Beschäftigung, Verteilung und Konjunktur, Bremen 1984: 97–129 ‘Lowe and the Marx-Feldman-Dobb-Model: Structural Analysis of a Growing Economy’,Eastern Economic Journal, 10 (1984): 169– 186 (with A Jeck) ‘Wachstumsgleichgewicht, Traverse und technologische Unterbeschäftigung’ (Growth Equilibrium, Traverse and Technological Unemployment), in: H Hagemann and P Kalmbach (eds), Technischer Fortschritt und Arbeitslosigkeit, 1983, 246–295 ‘Technologischer Wandel und Beschäftigung’ (Technological Change and Employment), in: Symposium Arbeit und Technik, Bremen 1983, 341–360 (with P Kalmbach) ‘Keynesianische Politik in der Wachstumskrise: Das Beispiel Schweden’ (Keynesian Policy in the Growth Crisis: The Case of Sweden) Konjunkturpolitik, 28 (1982): 1–35 (with T Schewe) ‘Zu Malinvauds Neufundierung der Unterbeschäftigungstheorie’ (On Malinvaud’s Refoundation of the Theory of Unemployment), in: H Hagemann, H.D Kurz and W Schäfer (eds), Die Neue Makroökonomik, 1981, 163–203 ‘Wachstum und Einkommensverteilung Strukturanalyse auf der Basis eines dreisektoralen Modells vom Lowe-Feldman-Dobb-Typ’ (Growth and Income Distribution Structural Analysis in a Three-Sectoral Model of the Lowe-Feldman-Dobb type), in: W.J Mück and A.E Ott (eds), Wirtschaftstheorie und Wirtschaftspolitik, Gedenkschrift für Erich Preiser, Passau 1981, 99–124 (with A Jeck) ‘Die keynesianische Ökonomie Schwedens: Erfolge und gegenwärtige Probleme’, Institut für Theoretische Volkswirtschaftslehre der Universität Kiel, Discussion Paper, No 29, 45 pp., 1980 (with T Schewe) ‘Adolph Lowes Wachstumstheorie und die Theorie des Technischen Fortschritts’, Institut für Theoretische Volkswirtschaftslehre der Universität Kiel, Discussion Paper, No 18, 32 pp., 1978 ‘Zur Relevanz des Truncation-Theorems in partialanalytischer und totalanalytischer Sicht’ (On the Relevance of the Truncation Theorem in a Partial and a Total Framework), Jahrbücher für Nationalökonomie und Statistik, 193 (1978): 359–379 (with J Pfister) ‘The Return of the Same Truncation Period and Reswitching of Techniques in Neo-Austrian and More General Models’,Kyklos, 29 (1976): 678–708 (with H.D Kurz); reprinted in: I Steedman (ed.),Sraffian Economics, Vol I, Aldershot 1988, 187–217; Russian translation, Moscow 1998 ‘Zum Verhältnis der Marxschen Werttheorie zu den Wert- und Preistheorien der Klassiker’ (On the Relationship of Marx’s Value Theory to the Theories of Value and Price in Classical Economics),Jahrbücher für Nationalökonomie und Statistik, 189 (1975): 531–543 (with H.D Kurz and G Magoulas) Book reviews A Schäfer, ‘Die Kraft der schöpferischen Zerstörung Joseph A Schumpeter, Die Biografie’, Frankfurt am Main und New York, NY, 2008, Bankhistorisches Archiv, Vol 35, (2009): 66–69 B Kulla, ‘Die Anfänge der empirischen Konjunkturforschung in Deutschland 1925–1933’ (The 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Gleichgewichtstheorie’, Munich 1979, Kyklos, 33 (1980): 742–744 D.J Harris, ‘Capital Accumulation and Income Distribution’, Stanford 1978, Kyklos, 32 (1979): 841–843 L.L Pasinetti, ‘Lectures on the Theory of Production’, London 1977, Weltwirtschaftliches Archiv, 115 (1979): 592–595 A Lowe, ‘The Path of Economic Growth’, Cambridge 1976, Kyklos, 31 (1978): 529–651 Name index Acemoglou, D 152, 154n14, 279n6, 352 Adler, M 120 Aghion, P 2, 306, 308, 347n2–3, 352 Akerlof, G.A 96, 252, 257, 289 Arrow, K.J 80, 83, 131, 134, 140, 184, 306, 323, 338 Baccini, A 178 Bagehot, W 98–9 Becattini, G 153 Beccaria, C 151 Bellanca, N 149, 154n4 Bernanke, B 202, 216n6, 219 Bielfeld, J.F von 21, 37 Blanchard, O 15, 191, 198, 206n2–3, 209–17, 236, 293 Blanqui, J.A 22 Blaug, M 81, 153 Böhm-Bawerk, E von 21–2, 231–47 Borio, C.V 111–12n1, 247 Braun (Browne), M.S 124, 127n23 Brown, V 173 Bruni, L 151–2 Cannan, E 171 Carl, E.L 21 Cassel, G 2, 134 Clarke, P 174 Coats, R 173 Cook, S 172 Currie, L.C 101, 111 Degenfeld-Schonburg, F 120 Diener, K 118, 126n2 Dobretsberger, J 121–5 Domar, E 139, 148, 312n1 Emmett, R 172 Engel-Janosi, F 119 Engels, F 14, 64–75 Eucken, W 24, 41 Faust, M 31, 36 Fetter, F.W 98 Fisher, I 7, 15, 92, 99, 113n5, n10, 184, 191, 216, 219–29 Friedman, M 101–2, 111, 167, 183–4, 191, 216n17, 252, 268, 285, 291 Frisch, R 2, 89, 418 Fronsperger, L 28, 35 Galiani, F 24, 42n4 Garegnani, P 146, 279n5 Garrison, R.W 107–8, 112n1, 115n22 Genovesi, A 150–1 Gerrard, B 173 Goethe, J.W von 35–6 Goldmann, E 122 Goodhart, C.A.E 198, 201, 275, 279n9, 67n24 Goodwin, C 89, 177–8 Gordon, R.J 213, 216n15, 289, 292 Gossen, H.H.24, 27 Granovetter, M 161–2 Graziadei, A 147, 154n4 Groenewegen, P.D 153 Grossman, G.M 306, 400, 404–6 Grünberg, C 120, 126 Gülich, G von 33 Haavelmo, T 137 Haberler, G 14, 121–2, 125, 127n11–13, n21 Hagemann, H 1–17, 78, 96, 105, 131–4, 139, 158, 163, 188n1, 196, 205, 219, 232, 267, 303–9, 312, 317, 320, 338, 351, 382, 400, 426 Hahn, F.H 80, 83, 185–6, 188n6 Harrod, R.F 89, 139, 148, 173, 305–7, 310 Hawtrey, R.G 14, 99–102, 111, 113n6, 214–15 Hayek, F.A von 12–14, 29, 78, 81, 92, 104–6, 109, 113n14, 114n15, 121–7, 154n1, 160, 163, 173, 184–6, 262, 320 Heckscher, E 14, 132, 134, 141, 401 Hegel, G.W.F 39, 66–7, 69–70 Heinrich, W 9, 119, 121–2, 125 Hicks, J.R 2–3, 115n21, 183, 188n2, 212–13, 216n9, 217n21, 272, 319–21, 325n4–5 Hildebrand, B 37, 39 Hollander, S 62n10, 64, 154n6 Howitt, P 306, 308, 352 Huang, H 343–8 Jeck, A 2, 56 Jevons, W.S 82, 93n8, 102, 113n5 Kahn, R.F 160, 173, 188n2 Kaldor, N 14, 131–41, 148–9, 153, 185–8, 217n21, 270, 306, 310, 322 Kaufmann, F 120, 162 Kelsen, H 120, 123, 125, 127n15 Kerschagl, R 123, 127n19 Keynes, J.M 2–3, 7, 15, 32, 43n11, 96, 104–5, 108, 111, 113n10, 114n20, 145–50, 154n2, 159–60, 167–70, 173–5, 185–8, 191–5, 202–3, 209–17, 224, 231–3, 241–7, 252, 306–7 Kienböck, V 123 Klock, K 30–6, 42n8 Knight, F.H 258 Koo, R.C 15, 219, 222–8 Kornai, J 338–42, 346–7, 348n10 Köster, R 37 Krugman, P 96, 216n2, n7; n17, 236, 283–4 Lagler, E 126–7 Laidler, D 14, 96, 114 Leijonhufvud, A 2, 15, 111, 115n22, 165–70, 192, 305 Levy, D 175, 273 Lindahl, E 34, 114n18, 135, 139 List, F 21–2, 36–7, 38n1, 43n11 Löwe, A (also Lowe, A.) 2–5, 7, 78, 81, 92, 105 Lucas, R.E 78, 86, 93, 183–4, 186–7 Lundberg, E 132, 140–2 Machlup, F 124, 127n27, 162 Mahr, A 126, 127n22 Maloney, J 171 Malthus, T.R 52–3, 62n10 Maneschi, A 407–8 Mann, F.K 30, 409 Marshall, A 24–6, 84, 97–100, 102, 113n5, 135, 146–8, 153, 173, 185, 256, 325n4 Marshall, M.P 97, 99, 102 Marx, K.H 3, 21–2, 24, 32, 35, 37–8, 41, 50, 60–2, 64–75, 103–4, 108, 113n12, 145–8, 148, 153–4, 171, 278, 407 Matthäus von Krakau 14, 22, 25–6 Matthew of Cracow see Matthäus von Krakau Mayer, H 66, 75, 120–6, 127n12 Menger, C 24, 27, 158 Mill, J.S 47, 61n2, 97, 112n2, 408 Minsky, H.P 7, 174, 195, 206, 220–1, 255–6 Mirowski, P 174, 178 Mises, L von 104–5, 109, 119–27, 161–2, 232 Morgenstern, O 14, 121–7 Möser, J 37 Müller-Armack, A 42 Myrdal, G 132, 137, 140 Neill, R 173, 175 Neisser, H.P 308 Neumann, J von 3, 125, 320 Ohlin, B 233, 401, 410 Okun, A.M 309 Overstone, Lord 97–8, 113n3 Palma, N 135 Pareto, V 4, 78–93, 133, 140, 149–50, 153, 403, 432 Pasinetti, L.L 14, 16, 145–6, 148–55, 161, 279, 314, 322, 325, 351 Pearson, H 22 Peart, S 175 Peutinger, K 27–8, 35 Phelps, E.S 2, 268, 273 Philippovich, E 120, 126, 160 Pigou, A.C 214–15 Polanyi, M 36, 165–7 Pütz, T 126 Quadrio Curzio, A 152–3, 154n8, 155n15, 321, 323–5 Quesnay, F 147 Ramsey, F.P 185, 194 Rau, K.H 37 Redlich, F 162–3, 165 Reinert, E.S 35 Reisch, R 123–4 Ricardo, D 12, 14, 43n11, 47–62, 72–3, 80, 146, 148, 153, 154n6, 160, 183, 320–2, 400–1, 407–8 Robbins, L.C 104, 109 Robertson, D.H 14, 89, 104, 108–10, 113n12, 114n17–20, 212, 214–15, 217n21 Robinson, J 160, 173, 184–6, 188, 217n21, 255, 269, 276, 410 Röpke, W 29 Roscher, W 22, 24, 33, 36 Rosenberg, N 322 Rosenstein-Rodan, P 124, 127n12 Rossi-Hansberg, E 400, 404–6 Rowthorn, R.E 134, 183, 186 Salin, E 32 Salvadori, N 147, 278 Samuelson, P.A 159–60, 188n6, 401–3, 405 Sandilands, R 112n1 Say, J.B 56, 61, 193–4, 354 Schabas, M 177 Schmitz, R 123–4, 236 Schmoller, G von 14, 22, 37–43, 158 Schreier, F 120 Schumpeter, J.A 16, 35, 104, 113n12, 121, 137, 142n9, 154n8, 160–1, 168, 259, 305–7, 330–47, 351–2, 354, 427 Schwartz A.J 101–2, 111, 252 Sen, A.K 42, 153, 155n16, 429, 439 Shiller, R.J 96, 252, 260 Simons, H 99, 113n8 Sinn, H.-W 15, 231–48 Skinner, Q 172 Smith, A 14, 27, 30–2, 36–7, 47–62, 79–81, 151–5, 176, 263, 320–3 Solow, R.M 3, 141n6, 160, 185, 219, 279n7, 304, 429–32, 437 Sombart, W 31, 37, 41 Soros, G 178 Spann, O 120–4, 126–7 Spiethoff, A 2, 31–3 Sprague, O.E 113n4 Sraffa, P 3, 14, 113n11, 61n2, 62n4, 145–55, 160–1, 171–3, 320, 323 Srbik, H 119, 122, 126n4 Stein, L von 30, 39, 122 Stigler, G 171–2 Stiglitz, J 2, 183, 185, 188n6, 426, 429–30, 432–7 Storch, H.F von 37 Streißler, E.W 24 Svennilson, I 14, 131–42 Sylos Labini, P 149, 154n8 Thiede, K 121–5 Thomas, B 25, 39, 114n6 Thornton, H 114n15 Thünen, J.H 24, 32 Tobin, J 251, 428 Tugan-Baranowski, M 113n12 Turner, J 158–9, 163n3–4 Vecchiato, F 42n6 Verdoorn, P.J 14, 131–42, 306, 309–10 Verri, P 151–2 Walsh, V 153, 155n16 Waterman, A 172 Weber, M 23, 26, 37, 41, 71, 126n3, 149, 203 Weintraub, R 177 Weiss, Franz X 120 White W.R 111, 112n1 Wicksell, K 100–8, 113–14, 137, 154n1, 191–2, 195, 204, 214, 247, 278, 305–7 Wieser, F 120, 122, 126, 333 Winch, D 172 Winter, E.K 120, 329, 346 Woodford, M 2, 97, 184, 186, 196–9, 206n1 Xu, C 342–9 Young, A 100, 113n6, 132, 134–6, 141n5, 322 Zamagni, S 151–2 Subject Index accelerator 102, 305, 307 animal spirits 174, 202–4, 260 asset markets 100, 111, 251, 258–9 Austrian economics 3, 14, 118, 121 balance of payments 112n2, 138, 140, 198, 228, 231–2, 240, 245 balance-sheet recession 219–20, 222, 224, 226–8 Bank Charter Act 98 Bank of England 98, 100, 201, 275 Banking School 98–9 bankruptcy 263, 346, 356 Baring Brothers 98 behavioural finance 252 business cycle see cycle Cambridge School of Economics 145 Cameralism 21, 24, 29, 33, 35 capacity effect (s) 307–8 capital: accumulation 49, 105, 139, 233; constant capital rule 431; exports 231, 234–5, 238–9, 241, 243, 246–7; flows 15, 231–2, 234, 243–7; marginal product of 103, 113n11, 274; mobility 17, 400–1, 408–9, 412, 419; stock 430–1 central banking 21, 99–101, 123–4, 184, 192, 198–200, 202, 246–7 cheating 253–6, 261 circles: interlocking 14, 161, 169, 178 civil economy 150–3 Classical economics 3, 103, 108, 153, 232, 320–1, 407–9, 411 Classical Political Economy 3, 172 Classics 2–3, 121, 172, 212 co-evolution 354, 357–8, 365 comparative advantage 2, 401–2, 406, 409–12 competition 16–17, 24–9, 34, 42, 72, 81–3, 114n17, 135, 138, 184, 192–4, 255, 410; imperfect 81, 160, 401; perfect 26, 81, 160, 184, 192, 194, 255, 410; see also innovation coordination: failures 15, 112, 115; coordination mechanisms 348n10 creative destruction 259, 305–6, 329, 338, 346, 351, 365–6 credit: control 99–100; creation 108–9, 233; crunch 201, 206, 227; cycles 86; deadlock 101 crisis: debt 231, 214, 245, 247; EMU 238, 247; financial 96, 100–10, 195, 206n3, 209, 213, 219–28, 245–7, 255, 272, 282, 303, 416–19, 426; macroeconomics 15, 36, 84–91, 96–8, 107, 122, 149, 183–8, 254, 261, 411, 417 currency 198, 416, 420–2; currency board 98; European 237; foreign 198, 421; hard 236; see also euro cycle: boom 102, 107–8, 220, 234–6, 241–4, 256, 268, 275; depression 101, 107, 110, 220–5, 303, 321; downswing 98, 100, 107, 225; upswing 98, 100, 107, 114n17, 303–7, 309–10 debt deflation 15, 219–20, 222, 224–5, 228 decision making 252, 259, 314–15, 319, 324–5n7 demand: curve (s) 184, 269–72, 354, 360; law of supply and demand 80, 82 deposits 98, 105, 221, 242, 318, 346, 421–2 Deutsche Gemeinschaft 120 development economics 21, 34–5, 37, 385 Dutch disease 17, 416 dynamics: economic 16, 78, 149, 314–18, 324–5n4, 335; evolutionary 16–17, 382; structural 13, 16, 149, 153, 301, 314–20, 324 ecological economics 429, 433 Econometric Society 43 efficient market hypothesis 174, 252 emigration 4, 10–11, 14, 125–6; emigrés 10–11, 165; exile 4, 10–11, 163, 178; see also migration employment: effects 1, 4, 14, 56–60, 309; full 106, 108, 114n16, 166, 205, 212, 233, 247, 253, 322, 403–6, 418–21; of capital 47–8, 53–5 Engel Curves 133, 354 entrepreneurs 27, 33, 88, 305–8, 329, 333–6, 340; entrepreneurship 330, 334–6, 340, 342; Schumpeterian 137, 355 equilibrium 78–85, 88–9, 105–7, 153, 251, 257, 293, 343, 404, 410, 435; disequilibrium 78–9, 83, 85–6, 88, 105–6, 114n17, n18, 134, 141, 192, 194 general 14, 78–86; gravitation 78; growth 133, 304; partial 258; see also stability euro 195, 232, 235, 237, 237–8, 284, 303, 371 European Monetary Union (EMU) 15, 231, 303 European Society for the History of Economic Thought (ESHET) 6, 13, 175, 178 expectations 3, 26, 120, 198–201, 204, 215, 237, 258–60, 296, 305–7, 355; adaptive 11, 292; inflationary 270–1, 284, 297; mathematical 202; rational 174, 184–5, 196, 199, 256; ‘State of Long-Term Expectation’ 193 Federal Reserve system 98–100, 110–11, 202, 226 financial instability 195, 220 financial system 32, 104, 195, 340, 342, 344–6 financialization 17, 232, 401, 408, 411 forced saving 104–10, 114n15, n17, n19–20 foreign trade 47–8, 53–4, 56–9, 61–2n12, 407 fragmentation 402, 404, 411 Great Contraction 101, 113n8 Great Depression 9, 100, 107, 174, 220, 225, 227, 228, 229n3, 282 growth 303–6, 318, 344–6, 351–4, 394–6, 406–9, 426–30; output 14, 131–9, 140, 309, 361, 426–9; policy 311, 437; productivity 5, 107–10, 114n18, 131–9, 141, 248n5, 289–94, 306–10, 408, 418; trend 16, 204, 304, 310; theory 13, 16, 153, 304, 306, 351–2, 430 habilitation 10, 118–22, 124–7n16 high-tech industries 382–4, 384, 385–6, 386, 390, 393, 395–7, 397 Historical School: Older German 22–5, 30, 33, 36–7; Younger German 35, 37, 41, 158 history: economic thought 3, 9, 13–15, 19, 159, 171–5, 176, 178, 232, 304, 338, 351, 381; historiography 172; rational reconstruction 175 human capital 151, 308, 308–11, 382, 394; formation 382, 390; quality 362, 364; quantity 360, 362 ideal types 41 imbalances, current account 15, 198, 231, 234; trade 236, 245, 247 income distribution 15, 133, 140, 231, 236, 239, 351, 364, 401, 416 income effect (s) 308–10, 358 increasing returns 132, 134–5, 139, 272, 321–4, 356, 401 inflation targeting 15, 97, 196–206, 282–97, 422 inflation tax 109, 114n16, n20 innovation 1, 16–17, 21, 42, 103–4, 108–9, 136–7, 227; innovation-based 344, 382; financial 227, 259, 345; general purpose 259, 263; product 310, 370, 374; Schumpeterian 16, 139, 259, 329–37; see also competition institutional economics 25, 33–5, 152 institutions 1, 98, 111–12, 150–2, 251–3, 336, 420; financial 221, 223, 227, 251–3, 338–9, 344, 347, 357; funding 4; perfect 38 interest-rate targeting see inflation targeting intermediate goods 324, 247n2, 322, 410 investment: capital 56–7; ‘investment trap’ 101; rate of return 3, 259, 306, 409–10; and savings 193–4, 241; see also savings and investment just price 25–6 Keynesian economics 115n21, 115n22, 131, 145, 148, 150, 174, 183, 195, 304, 311, 418 labour: division of 12, 28, 38, 133–4, 234, 321; market 186, 192, 194, 201, 204, 247, 252–3, 268–71, 276, 286, 296, 309, 418; productivity 10, 14, 52–3, 131–6, 141n7, 248n5, 268, 294, 295, 303–5, 321; unproductive 48–51 learning by doing 134, 140, 308–11, 323 lender of last resort 98, 101, 348n24; see also central banking liquidity trap 15, 101, 209–15, 217n21, 224 London School of Economics (LSE) 125 luxury goods 28, 30, 41 microeconomics 357, 340; foundations 344–7; neoclassical 192; traditional 191 macroeconomics 10, 13–14, 96–105, 114n16, 115n22, 181, 355, 363; growth 351; instability 96, 109–12; modern 17, 115n22, 183–4, 191–5; policies 17, 138, 415–23 market: definition 16, 368–9, 376–9n15; dynamics 377; economy 42, 103, 108, 112, 174, 256, 329, 335; financial 6–7, 15, 107, 109, 174, 178, 185–7, 202, 236, 247, 251–78; stock 6, 102, 263n4, 268 Marshallian (s) 26, 104, 172, 193, 195, 256 Marxism 14, 64–5, 67, 69–70, 75–6 Mercantilism 23, 41, 151, 244 migration: ideas 14, 158, 163, 165; knowledge 14, 163, 165; people 4, 166, 169 monetarism 97; monetarist 99, 174, 269–70, 275–8 monetary policy 96–9, 107, 110–11, 194, 196–205, 209–15, 224–5, 242, 261, 175, 283–6, 296, 418–23; expansionary 210–11, 283; rule (s) 99, 199 money illusion 15, 251–4, 268 money supply 100, 197, 215, 225, 268–9, 275–6 monopoly 27–9, 98, 255, 338, 343, 355 multiplier 183, 268, 271, 277–9n10, 305, 307–9 NAIRU 201, 204, 268–70, 289, 297n4 Neoclassical economics 22, 103, 172, 232, 430, 432 Neo-Ricardian economics 172 networks 1, 7, 10–13, 161, 186, 252, 368, 370–9, 396, 400 New Classical economics 93, 183–4 New Consensus Macroeconomics (NCM) 15, 196–7 New Keynesian economics 15, 191, 196–7 New Neoclassical Synthesis (NNS) 191 Nordic model 416–17 OECD 138–9, 286–8, 292, 295, 387, 415–16, 416, 428 offshore outsourcing 17, 400 offshoring 391, 400–7, 409, 411–12 oil economy 416 Okun’s law 133, 142, 309 open market operations 101 Ordoliberalism 24 output level 134, 320, 405; see also growth Pareto’s law 133, 140 path dependency 81, 304 Phillips curve 16, 196, 198, 201, 268–71, 282, 289–96, 295 policy rule (s) 99, 199 Pre-Classical economics 176 price level 99, 197, 200–1, 204–6n3; see also price level stability product differentiation 353, 359–62 production functions 271–3, 279n5 productivity 13, 38, 79, 104, 109; marginal 236, 237, 267, 271–4, 279n5, 307; theory 236, 274; see also growth, productivity; labour, productivity profit rate 401, 407–8, 408 profit share 400–1, 406, 411–12 quantitative easing 111, 203, 282 Quantity theory of money 96–7, 103–4, 192, 232 R & D (research and development) 308, 344–5, 352, 356, 382, 387, 391–7 rate of interest: equilibrium rate 197, 203–5; long-term rate 183, 209, 212–13; market rate 103, 106–7, 212; natural rate 104–5, 108, 199, 203–5, 214, 306; short-term rate 209, 215; zero bound 15, 209–15 rationality 16, 41, 174, 252, 329–37 Real Business Cycles (RBC) 78 Reichskammergericht 31 rent (s) 49–50, 52, 61, 342 resilience 316–18, 318, 325n4 revenue: gross and net 14, 47–8, 61 saturation 354–5, 357 saving(s) 187, 235, 242–3, 260, 346, 377, 403–4, 407; domestic 236, 242; Genuine Savings (GS) 428, 432; and investment 104, 108, 113n1, 114n17, 203, 193, 199, 220, 232, 236, 246; see also forced saving School of Salamanca 30 seigniorage 106, 109, 114n18, n20 Socialism 36, 41, 69–71, 85, 120, 125, 334–5, 416 soft budget constraint 16, 236, 338–43, 345–6 stability: financial 112n1, 206n3; macroeconomic 14, 98–9, 201; price level 16, 99, 104, 111, 113n11, 284–5, 296; price level 16, 99, 104, 111, 113n11; see also equilibrium structural change see dynamics subjective theory 24 substitution 28, 234, 242, 272, 276, 278, 318, 321, 351–3, 365; demand-side 376; elasticity of 405, 431, 435; intertemporal 191; marginal rate of 198; supply-side 377 sustainability 17, 107, 209, 236, 258–63, 427, 430–7 TARGET2, 245–6 tâtonnement 81–5, 88–9, 93n2, 251 trade cycle see cycle trade in tasks 404, 406 trade theory 28, 33–7, 165–6; classical 17, 47–8, 53–61, 400–12; neoclassical 232–3, 400–12 Treasury view 242 trend 13, 15–16, 39–40, 138, 171, 175, 177, 186, 198; and cycle 303–11; see also growth, trend uncertainty 110, 174, 186, 198, 204, 212, 214, 256, 262, 329–30, 341–4; financial 5, 258–62; information 256; intrinsic 260; Knight 258 unemployment 99, 107, 110, 114n16, 192, 201, 205, 228, 258, 268; NAIRU 268–71, 291–2; rate of 268, 285, 286–8, 289, 291–4, 415, 419; unemployment and inflation 282–9 use value 72, 147 Verdoorn’s law 132, 306, 309–10 vertical specialization 410, 412 wage: bill 272, 276–7, 407; capital 48–52, 56–61, 407; money 99, 183, 186, 194, 212, 267–70, 274, 277; policy 194, 418; share 239; stagnation 408–9; sticky 99–100, 194, 198, 200, 252; wageprice spiral 267, 269–71, 275; wage-profit relation 274, 402; wage-setting 252, 285, 291, 418, 421 welfare 28, 231, 236–8, 247, 255, 332, 351, 364, 382, 417, 436; effects 231, 244, 400, 412; social 253, 255, 341, 402; welfare economics 109, 231–2, 428, 436; welfare state 415–18 Whig history 171–2 Wirtschaftsstil 32 ... 144 Macroeconomics and the History of Economic Thought Festschrift in honour of Harald Hagemann Edited by Hagen M Krämer, Heinz D Kurz and Hans-Michael Trautwein Macroeconomics and the History of. .. A History of Homo Economicus The nature of the moral in economic theory William Dixon and David Wilson 142 The Division of Labour in Economics A history Guang-Zhen Sun 143 Keynes and Modern Economics... fields of interest are: history of economic thought, particularly of macroeconomics, monetary theory and development economics Pascal Bridel is professor of political economy at the University of