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  • Cited by 5
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    This chapter has been cited by the following publications. This list is generated based on data provided by CrossRef.

    Demiralp, Selva Hoover, Kevin D. and Perez, Stephen J. 2008. A Bootstrap Method for Identifying and Evaluating a Structural Vector Autoregression*. Oxford Bulletin of Economics and Statistics, Vol. 70, Issue. 4, p. 509.

    Hoover, Kevin D Johansen, Søren and Juselius, Katarina 2008. Allowing the Data to Speak Freely: The Macroeconometrics of the Cointegrated Vector Autoregression. American Economic Review, Vol. 98, Issue. 2, p. 251.

    Vroey, Michel De 2010. Keynes’s General Theory After Seventy Years. p. 157.

    Herfeld, Catherine 2017. Between mathematical formalism, normative choice rules, and the behavioural sciences: The emergence of rational choice theories in the late 1940s and early 1950s. The European Journal of the History of Economic Thought, Vol. 24, Issue. 6, p. 1277.

    Herfeld, Catherine 2018. From Theories of Human Behavior to Rules of Rational Choice. History of Political Economy, Vol. 50, Issue. 1, p. 1.

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  • Print publication year: 2006
  • Online publication date: December 2009

12 - The Past as the Future: The Marshallian Approach to Post Walrasian Econometrics

Summary

The popular image of the scientific revolution usually pits young revolutionaries against old conservatives. Freeman Dyson (2004, p. 16) observes that, in particle physics in the mid twentieth century, something had to change. But in the revolution of quantum electrodynamics, Einstein, Dirac, Heisenberg, Born, and Schödinger were old revolutionaries, while the winners, Feynman, Schwinger, and Tomonaga, were young conservatives. Post Walrasian economics is not a doctrine, but a slogan announcing that something has to change. Most of the self-conscious efforts to forge a Post Walrasian economics are due to old radicals. Here I want to explore the space of the young conservative: the future is past, particularly in the methodology of Alfred Marshall's essay, “The Present Position of Economics” (1885). The radical approach identifies the problem as Walrasian theory and seeks to replace it with something better and altogether different. The conservative approach says that theory is not the problem. The problem is rather to establish an empirical discipline that connects theory to the world.

Marshall's methodology places the relationship between theory and empirical tools on center stage. In North America, if not in Europe, the dominant tools of macroeconometrics are the vector autoregression (VAR) and calibration techniques. These techniques reached their current status as the result of two nearly simultaneous reactions to the Cowles Commission program, which dominated macroeconometrics during the two decades 1950–70. These are the famous Lucas critique, and the practically influential, if less storied, Sims critique.

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Post Walrasian Macroeconomics
  • Online ISBN: 9780511617751
  • Book DOI: https://doi.org/10.1017/CBO9780511617751
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