Re: The long and short of it

[Herbert Gintis <gintis@xxxxxxxxxxxxxxx>]

Alan Isaac writes:
>...Is it just that "Keynesian"
>theories are like all the other existing theories
>in that they do not and cannot
>address the full set of our policy interests?

	Macro theory should address a full set of policy interests. In
particular, it should thoroughly integrate long- and short-term
issues, as well as sustainability and equity issues. It is not
reasonable to teach undergrads and graduate students a macro theory
that stresses short term stabilization. It is also absurd to have a
division among economists about long- versus short-term issues
according as to whether they believe in market-clearing or not. Like
Keynesians and new-Keynesians and post-Keynesians, I believe that
market economies do not lead to market-clearing and may be excessively
volatile. But this is just a small subset of the macro issues that
should be dealt with.

>I'm guessing
>this is the claim, but it seems a weak criticism. On the other
>hand, if the idea is that there are no "Keynesian" style
>growth models, I would disagree strongly. Since you like
>IS-LM, Herb, you could look at some of Hugh Rose's work
>for example: as early as 1966 Rose included (non-micro based)
>concepts of endogenous growth, a crude Phillips curve, and
>distributional considerations (by functional class) in a
>growth model with money.

	My point is that Keynesians do not have a macro policy
framework that puts long term issues at the fore.

Herb gintis@xxxxxxxxxxxxxxx