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(In)stability at the Cowles Commission (1939-1948)
Ist Teil von
The European journal of the history of economic thought, 2020-07, Vol.27 (4), p.582-605
Ort / Verlag
London: Routledge
Erscheinungsjahr
2020
Link zum Volltext
Quelle
Taylor & Francis
Beschreibungen/Notizen
Stability analysis touched off extensive discussions at the Cowles Commission between 1939 and 1948. Oskar Lange, later followed by Lawrence Klein and Don Patinkin, among others, advocated for a move from a static analysis aimed at proving the existence of a stationary equilibrium with unemployment towards a dynamic approach exploring stability properties of full employment equilibria. In presence of excess supply of goods and labour with flexible money wages and prices, the message was that macroeconomic pathologies are better regarded as disequilibrium dynamics when full employment equilibrium is unstable - Lange and Klein - or when it is stable - Patinkin. The objective of this paper is to examine this type of modelling and how it provided the basis of a specific political vision shared by most economists of the Cowles Commission in the 1940's.