This section starts out listing the winners of the Nobel Prize in economics. For a complete list of winners check out this link. A lot of economists mentioned in this book are on the list. Looking at the the economists and their theories it's apparent that the moderns had won in Stockholm.
The rest of the section has to do with how growth theory had been brushed aside. The author finds this odd because so much of the problems in the economy had to do with growth. Examples include, productivity slowdown, high inflation, the rise of Asian "tigers" the return to prominence in Europe, and so on. Economists however, had their minds on business cycles and policy effectiveness, "besides, the main issues in growth theory were considered to have been largely settles."
Of course the model made by Solow consisted of bold outlines with little interior detail. (like a map) This leaves lots of areas that needed to be mapped, and young economist could be sure to venture into these unknown areas soon enough.
C for Will. I see a spelling and a grammatical error.
ReplyDeleteThe map Warsh refers to is the metaphorical map of Africa mentioned earlier in the book. Prior to European exploration of interior Africa, maps contained details about the interior that were hearsay, but which later turned out to be correct. But, when Europeans advanced in cartography and science they erased all that stuff because it hadn't been proved. So, the map went from fanciful but largely correct, to empty, because people got better informed — but also more distrustful of sources that were less well-informed.
This is where growth theory was from 1967 to 1984. Solow was so influential that all the contributions of other approaches had been deprecated, but all that was left was an outline of what the growth framework was capable of.
FWIW: This is the hollowed-out environment in which I became a macroeconomist. I took principles in Fall '81 - and did no growth. I took intermediate in Spring '82 - and did no growth. I did a senior level macro in Spring '83 - and did no growth. I took a growth class in Fall '83 in England - and only did Marxian growth theory from prior to Solow. I sat in a Ph.D. Macro I class in Spring '85, took it for real that Fall, and took Macro II in Spring '86 - and got no growth. Finally, in Spring 1987 a growth theory elective was offered - by a young assistant professor fresh out of one of the better Freshwater programs (Minnesota). Even so, I didn't incorporate much growth into my graduate classes through the 90's until retooling them in 1997. And I didn't put any growth into undergraduate courses until coming to SUU in 2001 and being given this course to develop. Even so, I was ahead of most macroeconomists.