All-Time 100 Novels

Let’s talk about literature this morning. There is a list on the most important novels made up by Time Magazine a couple of years ago. This is a famous and often-cited compilation which is usually mentioned on the back covers in order that a warm recommendation could be given to the readers. You can be sure the book you are holding in your hands at the book shop is worth reading if this is one of the BOOKS.

Finally, here is the list itself. Feel free to start looking through it and to find your favourite titles. The ones you have already read and the ones you would like to read once. What is the title you love the most?

Call for Papers: “The Methodology of Contemporary Macroeconomics”

Editors of Economics and Business Review of Poznań University of Economics are hereby inviting the authors to contribute to the special issue on “Methodology of Contemporary Macroeconomics”.

Editor in Chief:

  • Tadeusz Kowalski, Poznan University of Economics and Business,

Special Edition Editors:

  • Peter Galbács, Budapest Business School
  • Izabela Bludnik, Poznan University of Economics and Business

Abstracts due: January 31, 2017

Papers due: March 31, 2017

Suggested Topics:

  • The relationship of modern macroeconomics with some prior schools of economic thought in methodological terms: continuity and discontinuity.
  • Breaks in the methodology of contemporary macroeconomics: we are asking the authors to identify how realism and instrumentalism have occurred and overlapped each other during the evolution of modern macroeconomics. Arguments for and against the existence of such methodological breaks.
  • The role and types of underlying assumptions in modern macroeconomics: studying their functions in establishing any particular theory in contemporary macroeconomics with a special emphasis on the ontological implications.
  • Clarifying the importance of as-if-assumptions: studying the commitments to realism or instrumentalism through such assumptions.
  • Empirical methods of modern macroeconomics: the mutual relationship between theory and practice and the possible mechanisms through which the one has influenced the other.
  • Placing modern macroeconomics in a broader context: how has the methodology of social sciences (especially sociology and the methodology of Max Weber) influenced the way modern macroeconomics has turned to socio-economic reality? Are there any arguments for a reverse connection?
  • The effects of the methodology of contemporary macroeconomics on the public and professional views on theoretical macroeconomics: considering the way how modern macroeconomics should and should not use in providing the theoretical foundations for practical economic policy.
  • The relationship of mainstream economics and heterodox theories in methodological terms.

NOTE that papers are not limited to the above topics. Papers will be selected on the basis of both their contribution to the advancement of knowledge of the methodology of contemporary macroeconomics.

Call for Papers of Economics and Business review is available here.

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History of Economics or the History of Economic Methodology?

Every single economic theory implies a completely unique relationship to reality. A theory itself, its theoretical message or economic policy consequences can only be understood or properly judged by one taking this relationship into account. Doing so, however, requires a methodological analysis in the lack of which there is no chance of providing a careful interpretation of any theories. This is the reason why the history of economic thought can be described as the history of methodologies. This narrative should be a vital constituent of the commentaries elaborated in the history of economics.

The history of economics or physics have been the history of methodologies as well. In other words, the evolution of methodology has been a part of the evolution of theories, even if in economics theoretical and methodological interests have often been separated from one another. Even though the authors miss reflecting to methodology time and again, it remains true that every model or theory in economics implies a particular epistemological standpoint. Revealing such implications, checking the explicitly emphasized relationships to reality can provide new insights even for the history of economic thought. Michel De Vroey’s “A History of Macroeconomics from Keynes to Lucas and beyond” is one of the manifestations of the efforts that are directed towards making methodological interests an integrant part of economic historiography. Recent results have drawn our attention to the fact that methodological studies can contribute to historiography. As a reaction to new methodological insights the way the history of economic thought is reconstructed may also change. Even in the history of physics some refined changes were triggered by the methodological application of some modern statistical methods. In Spanos and Mayo’s “Error Statistical Modeling and Inference – Where Methodology Meets Ontology” some interesting points are made on the possibility of discovering the subtle interplay between instrumentalism and realism by approaching from such a modern aspect.

Such a methodologically bolstered narrative in the history of economics suggests a particular model of evolution in which the history and pre-history of contemporary macroeconomics can be described in the framework of a prolonged battle between realism and instrumentalism. The early, neoclassical phase was dominated by a pure theory deprived of any direct empirical relevance. This theory was amended by Keynes with a much more de-idealized model. The next significant stage of this path was made up of the empirical verification of this de-idealized model. Soon afterwards new classical macroeconomics that can be described as a model with neoclassical purity was also started due to the advancement of modern econometric techniques.

In this methodologically underpinned narrative new classical macroeconomics can be referred to as the culmination of realist efforts. The evolution has not been straight, of course. Klein–Goldberger model or F53 can be regarded as intermittent boosts of instrumentalism. This evolution was closed by new classical macroeconomics which is somehow the “end” of realist macroeconomics. By consummating the victory of instrumentalism, RBC-theorists succeeding new classicals brought the known history of contemporary macroeconomics to an end.

The methodological description of the Friedman–Lucas–RBC line of evolution involves further issues as well. Among them it is why instrumentalism can at all be an alternative of realism that seems to be the most interesting. If instrumentalism is inferior in epistemological terms, that is, in terms of providing access to the underlying causal structure, how can it be an appealing option? Referring to pragmatism is not a real explanation, since it is only a designation or a manifestation of an underlying epistemological cause, that is, scepticism.

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On the “Lucasian” Production Function

On the basis of Lucas’ 1973 paper, Sargent and Wallace intruduced their ’surprise’ supply function in which there was a white noise error term introduced that cannot be predicted in any way. Lucas introduced the effects of nominal and real shocks affecting a macro-economy into his system through price expectations: if expectations are true, output in any given period is at its natural level. However, the well-known and widely accepted aggregate production function described by Sargent and Wallace also provides leeway for the white-noise shocks independent of price expectations—resulting in the accidental nature of equilibrium and in the inefficacy of countercyclical efforts of monetary policy.

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Friedman and Lucas

The relationship between Friedman and Lucas, or new classical macroeconomics as a whole, was highly complex. The Friedmanian Phillips curve was an interesting starting point for Lucas, but he soon realized that the solution provided by Friedman was not quite satisfactory. Lucas elaborated a new approach in which rational expectations were presumed instead of the Friedmanian adaptive expectations. Due to this reformulation, the story in which the theory of the new classical Phillips curve was embedded radically changed. This modification, however, had a significant effect on Friedman’s own approach, so, as a result, the theory of the Friedmanian Phillips curve also changed. Moreover, new classical Neil Wallace, who was a graduate student at the University of Chicago between 1960 and 1963, regarded Friedman’s theoretical courses as a mess. This evaluation clearly indicates the broken relationship between Friedmanian monetarism and new classical macroeconomics.

However, it must be emphasized that in spite of this broken relationship between Lucas and Friedman, Lucas has remained a monetarist all along. He has been engaged in solving “Friedmanian” theoretical questions in a “non-Friedmanian” way.