Macroeconomics Theory and Economic Policy: Essays in Honour of Jean-Paul Fitoussi

Macroeconomics Theory and Economic Policy: Essays in Honour of Jean-Paul Fitoussi

Macroeconomics Theory and Economic Policy: Essays in Honour of Jean-Paul Fitoussi

Macroeconomics Theory and Economic Policy: Essays in Honour of Jean-Paul Fitoussi

Synopsis

Jean-Paul Fitoussi is one of the world's foremost macroeconomists. This celebration of his work includes contributions from Nobel Prize winning economists Kenneth Arrow & Robert Solow as well as Olivier Blanchard & sociologist Edmond Malinvaud.

Excerpt

The difficult dialogue between the development of macroeconomic theory and macroeconomic policy concerns

Edmond Malinvaud

1

Explaining macroeconomic phenomena, and the resulting macro performance of various economies, is a valuable objective for macroeconomic theory. Indeed, a very large part of macroeconomics has no other purpose. the intention of this contribution is not to downgrade in any way the explanatory objective which in all sciences naturally comes prior to concern about applications. But, in order to pay tribute to Jean-Paul Fitoussi, this book rightly stresses economic policy, which was and remains the dominant driving force in his life.

Moreover it makes sense to argue that, since the Great Depression, the main motivation inspiring development of macroeconomic theory was to guide policies. This was obviously true within the Keynesian movement, but also outside it whenever for instance alternative policy rules and their effectiveness were at stake.

Most economists of my generation, particularly among those working for policy advising, have painfully lived the two decades from 1975 to 1995. This was in part because the macroeconomic performance strongly deteriorated in our countries and the policy instruments at our disposal turned out to be much less powerful than we had thought. This was also because we disagreed with much of what was argued during the concomitant reconsideration of macroeconomic theory, as it was led by members of a younger generation, a reconsideration which made a definite impact in the academic world. We felt that these younger theorists were overly self-confident in their criticism, in special features of their scientific approach, and in the adequacy of our market institutions to spontaneously meet perceived macroeconomic challenges.

Now, as the multifarious progress realized by macroeconomic research during the two decades in question is assessed in retrospect, a better sense of realities again prevails. It may be the proper time now to coldly analyse the drama we have lived through. the analysis is a valuable objective not only for this article but also more generally. Indeed, the story is revealing of a permanent difficulty in the dialogue between

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.