ECON 442 History of Economic Thought Professor Malamud, BEH 502 course outline: the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty- five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil. JMK, General Theory of Employment, Interest, and Money.

Today’s Headlines Timely Targeted Temporary Is John Maynard Keynes “defunct”? Is Knut Wicksell “defunct”? Journal of Economic Perspectives, Fall 2007

Today’s Headlines IMF: Global Stimulus Package Timely (as there is an urgent need for action) · Large (because the drop in demand is large) · Lasting (as the recession will likely last for some time) · Diversified (as there is uncertainty regarding which measures will be most effective) · Contingent (to indicate that further action can be taken) · Collective (all countries that can should expand G-T given the severity and global nature of the downturn)· Sustainable (to avoid debt explosion in the long run and adverse effects in the short run). Is John Maynard Keynes defunct?

James B. Clark Medalists (subsequent Nobel Awards) 1947 Paul A. Samuelson (1970)Paul A. Samuelson 1949 Kenneth E. BouldingKenneth E. Boulding 1951 Milton Friedman (1976)Milton Friedman 1953 No Award 1955 James Tobin (1981)James Tobin 1957 Kenneth J. ArrowKenneth J. Arrow – (1972, with John R. Hicks)John R. Hicks 1959 Lawrence R. Klein (1980)Lawrence R. Klein 1961 Robert M. Solow (1987)Robert M. Solow 1963 Hendrik S. HouthakkerHendrik S. Houthakker 1965 Zvi GrilichesZvi Griliches 1967 Gary S. Becker (1992)Gary S. Becker 1969 Marc Leon NerloveMarc Leon Nerlove 1971 Dale W. JorgensonDale W. Jorgenson 1973 Franklin M. FisherFranklin M. Fisher 1975 Daniel McFaddenDaniel McFadden – (2000, with James J. Heckman)James J. Heckman 1977 Martin S. FeldsteinMartin S. Feldstein 1979 Joseph E. StiglitzJoseph E. Stiglitz – (2001, with George A. Akerlof and A. Michael Spence)George A. AkerlofA. Michael Spence 1981 A. Michael SpenceA. Michael Spence –(2001, with George A. Akerlof and Joseph E. Stiglitz)George A. AkerlofJoseph E. Stiglitz 1983 James J. HeckmanJames J. Heckman – (2000, with Daniel McFadden)Daniel McFadden 1985 Jerry A. HausmanJerry A. Hausman 1987 Sanford J. GrossmanSanford J. Grossman 1989 David M. KrepsDavid M. Kreps 1991 (Paul R. Krugman)Paul R. Krugman 1993 Lawrence H. SummersLawrence H. Summers 1995 David CardDavid Card 1997 Kevin M. MurphyKevin M. Murphy 1999 Andrei ShleiferAndrei Shleifer 2001 Matthew RabinMatthew Rabin 2003 Steven LevittSteven Levitt 2005 Daron AcemogluDaron Acemoglu 2007 Susan AtheySusan Athey

Nobel Laureates in Economics: ces_in_Memory_of_Alfred_Nobel ces_in_Memory_of_Alfred_Nobel Nobel laureates in our course Paul Samuelson John Hicks Milton Friedman James Tobin Franco Modigliani Robert Solow Gary Becker Robert Lucas Finn Kydland/Edward Prescott Joseph Stiglitz

Dominant Thoughts and Thinkers Time Span Individual Emphasis Laissez - faire Community Emphasis Social Role 1775 – 1800Adam Smith 1800 – 1825Ricardo - Malthus 1825 – 1850John Stuart Mill 1850 – 1875Karl Marx 1875 – 1900 Jevons / Walras /Marshall 1900 – 1925Wicksell – Fisher 1925 – 1950John Maynard Keynes 1950 – 1975Milton FriedmanPaul Samuelson 1975 – 2000Robert E. Lucas