Re: Say's Law and Operationalism

["Gunnar Tomasson" <tomasson@xxxxxxxx>]

Alan:

You write:

> The idea that Samuelson got the Nobel prize
> for his Correspondence Principle is prima
> facie ludicrous, so until you cite supporting
> text it cannot be taken seriously."

The statement "that Samuelson got the Nobel prize for his Correspondence
Principle" is YOUR paraphrase of MY reference to "Samuelson's Nobel
Prize-winning "hypothesis" that MAN-MADE market economies are "system[s] in
stable equilibrium or motion.""

At issue is the question whether Samuelson's "correspondence principle" is
or is not properly described as a "Nobel-Prize winning hypothesis"?

In his speech at the link which you provided, Assar Lindbeck "divide[d
Samuelson's] contributions into four main areas" - call them A, B, C, and
D - the "first [of which] is dynamic theory and stability analysis."  After
summarizing Samuelson's work in the field, Lindbeck concluded:

"This is, in fact, an application of Samuelson's famous "correspondence
principle", whereby a bridge was built between static and dynamic analysis,
which earlier had usually been regarded as two completely different methods
of analysis."

In other words, Area A is predicated on Samuelson's Nobel-Prize winning
"correspondence principle".

You also write:

> I must add that you appear to misunderstand the
> Correspondence Principle.  The idea is very simple.
> Suppose you write down a dynamic model and then wish
> to compare static equilibrium.  Samuelson simply observes that this
> makes no sense unless one can actually expect movement
> from one equilibrium to the other.  Samuelson therefore
> suggests doing the comparative statics of the dynamic
> model only for the cases that  ``make sense'', which he
> argued were the stable cases.  At the level of modeling,
> it is offered as an internal consistency criterion.

I have addressed my concerns about the Correspondence Principle and related
issues to Samuelson, beginning in the late 1970s.

On October 2, 1989, Samuelson advised me in this respect as follows:

"As I reach the three-quarter-century mark, my research program constrains
preoccupation with the merits of criticisms of my past work.  I can
therefore only acknowledge the three items that you sent in your September
letter."

Gunnar