Abstract
Considers the early history of macroeconomics, examining the macrodynamic models developed from the late 1920s to the late 1940s and their treatment of economic instability. Explores Jan Tinbergen's models of the economy's temporal processes and stability from his first papers in 1927 to the Lausanne meeting of the Econometric Society in 1931. Addresses the transfer between the natural sciences and economics, specifically focusing on the work of Balthasar van der Pol and Ludwig Hamburger. Discusses Ragnar Frisch's model of business cycles that built upon the linear differential-difference equations pioneered in the work of Tinbergen to show that fluctuations can occur even when the propagation mechanism is not oscillating. Describes how Michal Kalecki built a model for the whole economy around Tinbergen's linear differential-difference equations by using new economic ideas to account for the dynamics of aggregates. Focuses on Tinbergen's presentation of cases of multiple equilibria against the traditional macro-dynamic models that saw the economy as oscillating around a singular position of equilibrium. Chronicles how, in the context of the 1937-38 US economic crisis, debates surrounding the multiplier and the possibility of pump-priming the economy led to Paul Samuelson's multiplier-accelerator model. Summarizes James Meade's investment-saving-liquidity preference-money supply (IS-LM) two-dimensional macroeconomic model, Frisch's and Tinbergen's critiques of this model, and how Samuelson developed his analysis of stability by making it an integral part of comparative statics. Covers Alvin Hansen's, Arthur C. Pigou's, and Samuelson's discussions of full employment equilibrium, Oskar Lange's instability analysis and assertion that the capitalist system was unstable, and Lawrence Klein's empirical research on the American economy based on Lange's approach. Assous is Full Professor of Economics at the Universite Lumiere Lyon 2. Carret is a PhD student at the Universite Lumiere Lyon 2. Index.