The Mathematization of Macroeconomics: A Recursive Revolution
K. Vela Velupillai ()
No 807, Department of Economics Working Papers from Department of Economics, University of Trento, Italia
Frank Ramsey's classic framing of the dynamics of optimal savings,  as one to be solved as a problem in the calculus of variations and Ragnar Frisch's imaginative invoking of a felicitous Wicksellian metaphor to provide the impulse-propagation dichotomy, in a stochastic dynamic framework, for the tackling the problem of business cycles , have come to be considered the twin fountainheads of the mathematization of macroeconomics in its dynamic modes - at least in one dominant tradition. The intertemporal optimization framework of a rational agent, viewed as a signal processor, facing the impulses that are propagated through the mechanisms of a real economy, provide the underpinnings of the stochastic dynamic general equilibrium (SDGE) model that has become the benchmark and frontier of current macroeconomics. In this paper, on the 80th anniversary of Ramsey's classic and the 75th anniversary of Frisch's Cassel Festschrift contribution, an attempt is made to characterize the mathematization of macroeconomics in terms of the frontier dominance of recursive methods. There are, of course, other - probably more enlightened - ways to tell this fascinating story. However, although my preferred method would have been to tell it as an evolutionary development, since I am not sure that where we are represents progress, from where we were, say 60 years ago, I have chosen refuge in some Whig fantasies.
Keywords: Macrodynamics; Mathematical Economics; Dynamic Economics; Computational Economics. (search for similar items in EconPapers)
JEL-codes: B16 B22 B23 C60 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-hpe and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.unitn.it/files/7_08_vela.pdf [301 Moved Permanently]--> https://www.unitn.it/files/7_08_vela.pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:trn:utwpde:0807
Access Statistics for this paper
More papers in Department of Economics Working Papers from Department of Economics, University of Trento, Italia Contact information at EDIRC.
Bibliographic data for series maintained by Luciano Andreozzi ().