 Paul Samuelson’s ways to macroeconomic dynamicsThe European Journal of the History of Economic Thought, 2020, vol. 27, issue 4, 606-634 Abstract: Samuelson kept optimisation-based problems separated from macroeconomic dynamics in his Foundations, where dynamics was defined in terms of difference and differential equations. Despite some criticism of his “correspondence principle” of stability analysis by D.F. Gordon, D. Patinkin and others, it was only in the 1970s that Samuelson’s separation was effectively challenged, particularly by R. E. Lucas. After the Foundations, Samuelson developed dynamic optimisation models, sometimes featuring representative agents, but he did not extend that to the study of macroeconomic fluctuations. Neither did he accept market clearing inter-temporal maximisation as a solution to the micro-foundations problem that beset his models of macroeconomic dynamics. His 1988 nonlinear non-optimising business cycle model was his last contribution to dynamics. Eventually, Samuelson disentangled his 1965 “efficient market hypothesis” of financial economics from rational expectations and claimed that the former should form one of the pillars of macroeconomic dynamics, together with imperfectly competitive markets for goods and labour. Date: 2020 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:eujhet:v:27:y:2020:i:4:p:606-634 Ordering information: This journal article can be ordered from DOI: 10.1080/09672567.2020.1767670 Access Statistics for this article The European Journal of the History of Economic Thought is currently edited by José Luís Cardoso More articles in The European Journal of the History of Economic Thought from Taylor & Francis Journals |
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