As co-blogger Scott Sumner famous a short time in the past, financial economist Ben McCallum has died. He was 87.
Ben wrote the article on Monetarism for the second version of The Concise Encyclopedia of Financial system. I selected him due to his large data and readability of expression. I used to be not disillusioned on both.
Right here’s his opening paragraph:
Monetarism is a macroeconomic college of thought that emphasizes (1) long-run financial neutrality, (2) short-run financial nonneutrality, (3) the excellence between actual and nominal rates of interest, and (4) the position of financial aggregates in coverage evaluation. It’s significantly related to the writings of Milton Friedman, Anna Schwartz, Karl Brunner, and Allan Meltzer, with early contributors outdoors the USA together with David Laidler, Michael Parkin, and Alan Walters. Some journalists—particularly in the UK—have used the time period to confer with doctrinal help of free-market positions extra typically, however that utilization is inappropriate; many free-market advocates wouldn’t dream of describing themselves as monetarists.
And certainly one of his concluding paragraphs:
What’s left at the moment of monetarism? Whereas some disagreement stays, sure issues are clear. Curiously, most of the modifications to Keynesian pondering that early monetarists proposed are accepted at the moment as a part of commonplace macro/financial evaluation. In spite of everything, the principle proposed modifications have been to differentiate fastidiously between actual and nominal variables, to differentiate between actual and nominal rates of interest, and to disclaim the existence of a long-run trade-off between inflation and unemployment. Additionally, most analysis economists at the moment settle for, at the very least tacitly, the proposition that financial coverage is stronger and helpful than fiscal coverage for stabilizing the economic system. There’s some tutorial help, and a bit in central financial institution circles, for the real-business-cycle suggestion that financial coverage has no vital impact on actual variables, however this concept most likely has marginal significance. It’s arduous to consider that the key recession of 1981–1983 in the USA was not triggered largely by the Fed’s deliberate tightening of 1981—a tightening that reveals up in ex-post actual rates of interest and in M1B progress charges as adjusted by the Fed on the time (Desk 1, column 6) to take account of main institutional modifications.
However don’t miss his dialogue of the so-called “monetarist experiment” beneath Fed Chair Paul Volcker.
As Scott identified, he was very form and beneficiant. I first met him, I consider, on the fall 1975 Carnegie-Rochester convention at Carnegie Mellon College in Pittsburgh, throughout my first yr as an assistant professor of economics on the College of Rochester’s Graduate College of Administration. What stands out in my thoughts is that he raised his tall body to make a crucial touch upon a paper that has simply been offered after which ended with, “I appreciated the paper.” Folks responded by smiling and/or laughing appreciatively at his clear skill to differentiate a criticism from an assault.