Monday, February 28, 2011
The Residual and Its Critics p.153-157
There were a few interesting topics mentioned in this section. The first would be the movement of new economists to MIT and the arrival of Karl Shell who desired to include technology into the growth problem instead of avoiding the issue. The next point of note would be the "maximum principle" which originated in Moscow and was a way to connect calculus/algebra to topology. Next there was a move from MIT and the economic thought there to Chicago. If I'm not mistaken, Chicago is still the Mecca of economic thought. From Chicago a few of the new growth economists attended a conference in Stanford which brought up an interesting question: "could economic growth be speeded up through policy?" Also mentioned were "turnpikes" which were avenues through which economics could move to higher levels of development by forced investment. However in the summer of 1965 all these new thoughts were squashed and ended up being published with little fanfare as "Essays on the Theory of Optimal Economic Growth" edited by Shell in 1967.
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Sorry this is late, I didn't realize I had a post on Saturday and when I realized it (Sunday) I found that I left my book at work.
ReplyDeleteBasil
This is a test - Blogger/Google just lost a comment I wrote.
ReplyDeleteA for Basil.
ReplyDeleteKarl Shell passed away about 2 years ago. He was on my medium list for a Nobel Prize (but they don't award them posthumously). I spent a lot of time working through his stuff in 1987-8.
MIT is still a top 5 economics Ph.D. school. It's worth going to their Wikipedia page to get a sense of all the big name people from the text who have run through there through the years.
Chicago is also a top 5 school. I would not call it a mecca (except to those attracted to the politics and worldview of its business and economics programs).
Economists are still trying to answer the question of whether policy can promote growth. Certainly some countries do seem to have gotten on turnpikes while others have not. We're not sure why. A lot of research over the last 20 years has focused on "institutions". These are long-lived cultural or social constructs that are correlated with growth (e.g., freedom of association). If policy could promote these, then policy might be able to promote growth.
Interest in the Solow model peaked in the mid-60s. Part of the reason was practical: developed economies performed terribly from the mid 1960's through the mid 1980's (1969-82 for the U.S.). What's the use of studying growth if no one is growing fast?