Economics 442 Section 1 History of Economic Thought Spring 2010


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Economics 442 Section 1

History of Economic Thought

Spring 2010

BEH – 224 TTh 4 - 5:15 pm

Instructor: Bernard Malamud

Office: BEH 502 Phone: 895 – 3294 Fax: 895 – 1354

Office Hours: TTh 12 – 1 pm; 2:30 – 3:30 pm; and by appointment

e-mail: Website:


General Nature of the Course

This course treats the ideas of the principal contributors to the development of economics. Prerequisites: Admission to a business major/junior standing, six credits of economics. 3 credits.

Course Objectives

This course will put you in touch with the roots of economic science and guide you along various branches of the discipline. At the end of the course, you will be conversant with the major ideas of Cantillon, Smith, Malthus, Ricardo, Mill, Marx, Menger, Walras, Jevons, Marshall, Wicksell, Fisher, Keynes, Hayek, Samuelson, Friedman, Lucas, and other influential classical, modern, and contemporary thinkers. You will learn how these ideas have evolved into Economics as it is studied and practiced today. At this time of economic distress, special attention will be paid to the history of macroeconomic thought. At the end of this course, you will have increased pride in your chosen discipline.


Required Texts and Supplementary Readings

  • Peter Clarke, Keynes: The Rise, Fall, and Return of the 20th Century’s Most Influential Economist. London: Bloomsbury Publishing, 2009.

  • Meghnad Desai, Marx’s Revenge: The Resurgence of Capitalism and the Death of Statist Socialism. London: Verso, 2002.

  • Robert Heilbroner, The Worldly Philosophers, any edition.

  • David Warsh, Knowledge and the Wealth of Nations: A Story of Economic Discovery. New York: W.W. Norton, 2006.

Supplementary Readings and Sources

  • History of Economic Thought Website:

  • Wikipedia: The Free Online Encyclopedia:

  • The Concise Encyclopedia of Economics:

  • J. Eatwell, M. Milgate, P. Newman, eds., The New Palgrave: A Dictionary of Economics. London: Macmillan, 1987.

  • William J. Barber, A History of Economic Thought. New York: Frederick A. Praeger, 1968.

  • Eduard Heimann, History of Economic Doctrines: An Introduction to Economic Theory. New York: Oxford University Press, 1945. (On reserve at Lied Library)
  • History of economic thought books in the UNLV library: HB 75…and HB 76

Check out one (and only one) of the many books treating the history of economic thought. Read sections relating to what we are currently covering. When you (and others) return the book after one or two weeks, check out another.

  • Economic classics: The works of Smith, Ricardo, Malthus, Mill, Marx… are on the shelves of the UNLV library. Paperbacks of the classics are available from at reasonable cost. Electronic versions of major works are at and Links to many are on the last page of this outline. Sample the great works and build your own library.

  • Additional supplementary readings are called out in the course outline. Many are journal articles you can access via the UNLV library website. Some will be provided as handouts. You can google for others.

  • Podcasts:

Examinations, Paper, and Grading

Your grade will be based on a 100 point midterm exam, a 100 point paper on the history of macroeconomic thought, and a 150 point final exam. You will be able to re-do one question on the midterm at home; your score for that question will be the average of your classroom and take home scores. In addition, there will be six 10-point quizzes on materials covered since the last quiz or midterm. Your top five scores will count toward your grade. You must meet with me to discuss your paper and you must submit it by the April 15 deadline so your abstract and references can be included in a handout to the class prior to scheduled presentations. Failure to meet the deadline will be penalized 25 points. Your term paper grade will reflect your oral discussion as well as the written paper itself.

Attendance and class participation
will very much affect your grade.

Mar 2 Midterm examination 100 points

Apr 15 Electronic version of your 2-page paper is due 100 Top 5 quizzes 50

May 4 Final Examination, 6—8pm 150

Maximum Total Points 400 points
Approximate Grade Distribution
Average Score (out of 400 points) Final Grade

90 percent Borderline A-

80 percent Borderline B-

70 percent Borderline C-

60 percent Borderline D-

Makeup Policy

A makeup may be arranged at mutual convenience if you have a compelling reason to miss the midterm exam. A makeup exam must be taken before the missed exam is returned to the class. There will be no makeup quizzes or final exam. However, a student missing a class because of observance of a religious holiday and students who represent UNLV at any official extracurricular activity shall also have the opportunity to make up assignments. Such students must provide official written notification no less than one week prior to the missed class(es).

Class Conduct

Your instructor and classmates deserve courtesy. If you must arrive late or leave early, do so quietly. Inform me beforehand if you must leave a class early. Smoking and eating in class are prohibited. Talking to your neighbors in class, reading newspapers and magazines, and texting is rude, disruptive, and unacceptable. While this probably need not be said, anyone found engaging in any act of academic dishonesty will be punished in accordance with UNLV policies.

Other Information

The Disability Resource Center (DRC) coordinates all academic accommodations for students with documented disabilities. The DRC is the official office to review and house disability documentation for students, and to provide them with an official Academic Accommodation Plan to present to the faculty if an accommodation is warranted. Faculty should not provide students accommodations without being in receipt of this plan.

UNLV complies with the provisions set forth in Section 504 of the Rehabilitation Act of 1973 and the Americans with Disabilities Act of 1990, offering reasonable accommodations to qualified students with documented disabilities. If you have a documented disability that may require accommodations, you will need to contact the DRC for the coordination of services. The DRC is located in the Student Services Complex (SSC), Room 137, and the contact numbers are: VOICE (702) 895-0866, TTY (702) 895-0652, FAX (702) 895-0651. For additional information, please visit: .

Course Outline


Topics and Readings

Additional readings may be assigned as the course proceeds.

Jan 12

Jan 14

Jan 19

Jan 21

Jan 26

Jan 28

Feb 2

Feb 4

Feb 9

Feb 11

Feb 16

Feb 18

There is much material from diverse sources about ideas treated in this course that you should bring to class discussions. Read material and follow some links on the New School’s History of Economic Thought website, Wikipedia, and The Concise Encyclopedia of Economics for each topic covered. You should also read the relevant material in the book(s) you have borrowed from the library. These sources are not explicitly cited in the course outline.
Course organization and overview.

  • Heilbroner, Preface, Chapters 1 and 2/Warsh, Chapters 3, 27, and Conclusion.

First Principles / Mercantilists / Physiocrats

  • Law, Hume, Cantillon, Quesnay, Turgot

  • Heimann, Chapter 2; Chapter 3, pp. 48 – 63.


  • Desai, Ch.2/Heilbroner, Ch. 3/Heimann, Ch. 3, pp. 63 – 80/Warsh, Ch. 4

  • Barber, Part I: Introduction, Chapter 1

  • Robert Heilbroner, The Paradox of Progress: Decline and Decay in The Wealth of Nations, Journal of the History of Ideas, Apr-Jun 1973, pp. 243-262

  • Malthus – Ricardo

  • Say, Bentham

  • Heilbroner, Chapter 4/Heimann, Chapter 4/Warsh, Chapter 5/Barber, Chapters 2,3

  • JM Keynes, “Robert Malthus,” in Essays in Biography.


  • Heilbroner, pp. 127 – 135/Heimann, pp. 119 – 123/Warsh, Chapter 6.

  • Barber, Chapter 4, Postscript

Marx – Engels

  • Desai, Ch. 4,5; Heilbroner, Ch. 6/Heimann, Ch. 6, pp. 141 – 161/Warsh, Ch. 6.

  • Barber, Part II: Introduction, Chapter 5

  • Joan Robinson, An Essay on Marxian Economics Preface, Introduction

Marginalist Revolution: Gossens, Menger, Jevons, Walras

  • Cournot, Clark, Böhm-Bawerk, Wicksell

  • Desai, Chapter 12/ Heimann, Chapter 8/Barber, Chapter 7


  • Edgeworth, Pareto

  • Heilbroner, pp. 206 – 211/Warsh, Chapter 7/Barber, Chapter 6, Part III: Postscript

  • J. M. Keynes, Alfred Marshall, 1842-1924, Economic Journal, Sep., 1924, pp. 311-372.

  • Joseph Schumpeter, Alfred Marshall’s Principles: a semi-centennial appraisal, American Economic Review 1941, 236–48

Course Outline, continued


Topics and Readings

Additional readings may be assigned as the course proceeds.

Feb 23

Feb 25
Mar 2

Mar 4

Mar 9

Mar 11

Mar 16

Mar 18

Wicksell – Fisher

  • Carl Uhr, “Knut Wicksell—A Centennial Evaluation,” American Economic Review, Dec. 1951, pp. 851 ff.

  • Cumulative Process:

  • R. B. Westerfield; Paul H. Douglas, Memorials: Irving Fisher, American Economic Review, Sept. 1947. 656 – 663.

  • Fisher's Debt-Deflation Theory of Great Depressions and a possible revision
Catch-up and review
Mid-semester examination
Keynes/Post – Keynes

  • Kalecki

  • Keynes’ “Circus”—J. Robinson, Kahn, E.A.G. Robinson, Sraffa, Meade
  • Clarke, Keynes: The Rise, Fall and Return of the 20th Century’s Most Influential Economist

  • Desai, Chapter 11/ Heilbroner, Chapter 9/ Barber, Part IV

  • J.M. Keynes, The General Theory of Employment, Qtly Jrl of Econ, Feb. 1937

  • Joseph Schumpeter, John Maynard Keynes 1883 – 1946 American Economic Review, Sept. 1946, 495 – 518.

  • J. E. King, A History of Post Keynesian Economics Since 1936

  • Perry Mehrling, The Vision of Hyman Minsky, Jrl of Economic Behavior and Organization, 1999, 129 – 158.

Keynesian Economics

  • Samuelson

  • Hicks, Tobin, Modigliani

  • Desai, Chapter 14/ Warsh, Chapter 8.

  • Wm. Barnett, An Interview with Paul Samuelson, Macroeconomic Dynamics, 2004, 519 – 542.

  • Wm. Barnett and Robert Solow, An Interview with Franco Modigliani, Macroeconomic Dynamics, 2000, 222 – 256.

  • David Colander, Conversations with James Tobin and Robert Shiller, Macroeconomic Dynamics, 1999, 116 – 143.


  • Friedman

  • M. Friedman, The Methodology of Positive Economics

  • M. Friedman, The Role of Monetary Policy, American Economic Review, March 1968, pp. 1 – 17.
  • John Taylor, An Interview with Milton Friedman, Macroeconomic Dynamics, 2001, 101 – 131.

  • Milton Friedman on Money

  • Harry G. Johnson, The Keynesian Revolution and the Monetarist Counter-Revolution, American Economic Review, May 1971, pp. 1 – 14.

  • Bennett McCallum, An Interview with Alan Meltzer, Macroeconomic Dynamics, 1998, 238 - 283.

Course Outline, continued


Topics and Readings

Additional readings may be assigned as the course proceeds.

Mar 23

Mar 25

Apr 6

Apr 8

Apr 13

Apr 15
Apr 15

Apr 20

( # 1—8)
Apr 22

( # 9-16)
Apr 27

Apr 29

May 4

New Classical Economics – New Keynesian Economics

  • Lucas

  • Kydland – Prescott, Sargent

  • Stiglitz, Fischer
  • Warsh, Chapter 13.

  • Rodney Maddock and Michael Carter, A Child’s Guide to Rational Expectations, Journal of Economic Literature, March 1982, 39 – 51.

  • Robert Lucas and Thomas Sargent, After Keynesian Macroeconomics

  • Olivier Blanchard, An Interview with Stanley Fischer, Macroeconomic Dynamics, 2005. 244 – 262.

  • Alan Blinder, Keeping the Keynesian Faith, World Economics, 2001, 105-40
Austrian Economics: von-Mises – von Hayek

  • Desai, Chapter 12

  • Murray Rothbard, Mises in One Lesson

Spring Recess
Radical Microeconomics: Friedman, Becker, Lancaster, Levitt

  • Friedman on Capitalism and Freedom

  • Interview with Gary Becker

  • Stephen Levitt and Stephen Dubner, Freakonomics.

Schumpeter/Growth Theories

  • Solow, Lucas, Romer

  • Heilbroner, Chapter 10
  • Warsh, Knowledge and the Wealth of Nations, Part II, Chapters 14 – 26.

  • Lucas on Growth, Poverty, and Business Cycles

Romer on Growth
Semester Paper Due

Send electronic copies to Name your files

Presentation Number.Your Last Name.Your Topic.Draft Number

and Presentation Number.Your Last Name.Your Topic.Abstract

Presentation/discussion of term papers on History of Macroeconomic Thought

Anticipations of the General Theory: The Stockholm School/Michal Kalecki

Internal-External Balance (Nat’l Self-Suffi’cy)/Public Expenditure: Treasury View-Multiplier
Interest Rates: Nominal and Real—Investment and Saving

The General Theory and Its Offsprings/The General Theory and Its Critics

The Phillips Curve: Keynesian Totem/The Phillips Curve: Monetarist Target

Post-Keynesian (Kaleckian) Economics/Inflation: Post-Keynesian—Monetarist

Monetarist Core—Real Balance Effect/Monetarism: Critique and Defense

Rational Expectations/Supply-Side Economics

Final Examination, 6 – 8 pm.

Classic works
Richard Cantillon, Essay on the Nature of Commerce.
Adam Smith, The Theory of Moral Sentiments
__________, An Inquiry into the Nature and Causes of the Wealth of Nations
__________, Lectures on Jurisprudence.

Thomas Robert Malthus, An Essay on the Principle of Population: A View of its Past and Present Effects on Human Happiness; with an Inquiry into Our Prospects Respecting the Future Removal or Mitigation of the Evils which It Occasions

___________, Principles of Political Economy,M1
David Ricardo, On the Principles of Political Economy and Taxation
John Stuart Mill, Principles of Political Economy
Karl Marx, Capital: A Critique of Political Economy, three volumes, edited by Fredrick Engels
____________ and Fredrick Engels, Manifesto of the Communist Party
Alfred Marshall, Principles of Economics
Knut Wicksell, Interest and Prices
John Maynard Keynes, The Economic Consequences of the Peace
____________, The General Theory of Employment, Interest, and Money
Paul A. Samuelson, Foundations of Economic Analysis
Milton Friedman and Anna Schwartz, A Monetary History of the United States, 1867 – 1960.
Milton Friedman, Capitalism and Freedom.
Joseph Schumpeter, Capitalism, Socialism and, Democracy
ECON 442 Spring 2010

Term Paper

You will prepare a term paper on a randomly assigned topic in the history of macroeconomics. The paper can be any length—whatever it takes…five double-spaced pages might be sufficient—but it must be accompanied by an abstract and list of references that fit on a single page. An example of such a page is attached. Your abstract, of course, will also be at the beginning of your paper and your references, of course, will also be at the end. You will use your abstract/reference page to lead a class discussion of your topic toward the end of the semester. A packet containing all abstract/reference pages will be emailed to you before the class discussions begin.

Your paper should1 touch on the following points, not necessarily in this order: i) a statement of your topic; ii) a summary of the career(s) of the economist(s) involved; iii) a discussion of their positions and/or findings and any controversies surrounding these positions—the meat of your paper; iv) the relation of this particular work to the development of macroeconomics—what came before and what followed; v) how, if at all, the work you covered is treated in macroeconomics courses you have taken and vi) how, if at all, it affects past and/or present macroeconomic policies.
Your topic assignment sheet lists references you must consult and address in your paper. You are not, however, limited to these. Indeed, you should go beyond these references and explore other material relevant to your topic. Use The New Palgrave: A Dictionary of Economics in the Lied Library’s reference section (HB61.N49 1987) as a guide. Journal articles that are listed in your assignment sheet can be downloaded from the UNLV library website. Books can be checked out of the Lied Library. Some books serve as references for a number of students and are held in reserve at the library. You should note the material relevant to your topic and return these books promptly.

A WORD version of your paper and of the abstract/reference page are due by email ( no later than April 15—if you can make that deadline for the IRS, you can make it for this course. Send your paper and abstract/reference page separately. Name your WORD files as follows:

Presentation Number.Your Last Name.Your Topic.Draft Number

and Presentation Number.Your Last Name.Your Topic.Abstract

for example, 0.Malamud.Keynes.1 and 0.Malamud.Keynes.Abstract.

You are encouraged to submit drafts of your paper before the deadline for feedback. You can revise and resubmit your paper as needed. Only your final submission will be graded. If you do not quite understand what is expected of you, see me! If you do not seek guidance early in the semester, I assume you fully understand what is required.

Topics will be discussed in class in the following order:
Anticipations of the General Theory: The Stockholm School

Anticipations of the General Theory: Michal Kalecki

Internal-External Balance (National Self-Sufficiency)

Public Expenditure: The Treasury View—The Multiplier

Interest Rates: Nominal and Real—Investment and Saving

The General Theory and Its Offsprings

The General Theory and Its Critics

The Phillips Curve: Keynesian Totem

The Phillips Curve: Monetarist Target

Post-Keynesian (Kaleckian) Economics

Inflation: Post-Keynesian Inflation—Monetarist Inflation

Monetarist Core—Real Balance Effect

Monetarism: Critique and Defense

Rational Expectations

Supply-Side Economics.

Your Presentation #/Your Name Here!

John Maynard Keynes: The General Theory


John Maynard Keynes (1883-1946) was a leading British economist of the twentieth century. Born to an academic family in Cambridge, England, he was at one and the same time a scholar and teacher at Kings College, Cambridge; the editor of the Cambridge-based Economic Journal; a businessman and investor in London where he built a substantial fortune; a patron of the arts; a public intellectual, frequently writing in British and American newspapers and journals of opinion; an advisor to Liberal Party politicians and prime ministers of all parties; and an active participant in the Bloomsbury group of writers and artists. He served in the British Treasury during both world wars and was particularly influential during World War II, negotiating loans and lend lease terms with the United States and leading the British delegation to the Bretton Woods Conference. The Bretton Woods regime of pegged exchange rates that lasted for decades after his death was largely his creation. Keynes’ major work, The General Theory of Employment, Interest and Money (1936), was written against the background of the worldwide depression of the 1930s. Keynes’ insight that what works for the individual need not work for the community as a whole2—the “fallacy of composition”—established macroeconomics as a distinct field of study. Keynes’ “general theory” is that macroeconomic equilibrium—the equality of output and expenditures, the equality of saving and investment—is achieved by changes in output and income, not by changes in prices. Furthermore, this equilibrium need not correspond to the full employment of an economy’s resources. The primacy of effective demand in the determination of macro-equilibrium has been transmitted to generations of students by the “45-degree line diagram” or “Keynesian cross” of introductory textbooks. Within this framework, Keynes pointed to public spending, “the socialization of investment,” as an offset to deficient private demand. This logic underlies today’s ambitious stimulus programs of Brazil, China and elsewhere and the more modest stimulus programs of the United States and Europe.

Peter Clarke, Keynes: The Rise, Fall, and Return of the 20th Century's Most Influential Economist. London: Bloomsbury Publishing, 2009.
Economy Watch, Brazil’s Economic Stimulus Package,
R. Glenn Hubbard and Patrick O’Brien, Macroeconomics, 2nd Edition. Upper Saddle River, NJ: Prentice Hall, 2008.
John Maynard Keynes, The General Theory of Employment, Interest and Money. New York: Classic Books America, 2009.
Nicholas Kulish, Aided by Safety Nets, Europe Resists Stimulus Push, NewYork Times, March 26, 2009.
Richard McGregor, China's Larger Stimulus Program Appears to Be Working, Financial Times, July 16, 2009.
Paul Samuelson, A Synthesis of the Principle of Acceleration and the Multiplier.

Journal of Political Economy 47 (December 1939): 786-97.
____________, Economics 1st Edition. New York: McGraw-Hill, 1948.
Robert Skidelsky, John Maynard Keynes: 1883-1946: Economist, Philosopher, Statesman. New York: Penguin, 2003
______________, Keynes: Return of the Master. London: Allen Lane, 2009.

Wikipedia, American Recovery and Reinvestment Act of 2009.

1 Should, not must. If any of the following points are irrelevant to your topic you of course need not include them.

2 A single unemployed worker, for example, can get a job by accepting a lower wage. If all wages and prices are reduced, however, unemployment is largely unchanged.


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