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Tuesday, December 30, 2008

Economist of the Year: John Maynard Keynes?

With all the end-of-the-year/best of 2008 lists coming out this week, and with an economic crisis upon us, the question naturally arises: who is the economist of the year?  

It seems like a lot of our most prominent economists think it's John Maybard Keynes.  Which may seem at first somewhat surprising, given that Keynes did his work in the 1920s, '30s, and '40s; but when you think about the global economic situation in those decades, which is precisely what Keynes concerned himself with, it starts to make more sense..

(Here is one line from the wikipedia bio that jumped out at me, given that I used to be something of a logician:
Bertrand Russell named Keynes the most intelligent person he had ever known, commenting, "Every time I argued with Keynes, I felt that I took my life in my hands and I seldom emerged without feeling something of a fool."
For more on biographical details, see this 1985 NYT review of a biography of Keynes.)

Below are some things to read by and about Keynes, if you're so inclined:
  • A short piece that ran in the Financial Times in October: "Man in the News: John Maynard Keynes"
  • A blog post from last week by Princeton economist, NYT columnist, and 2008 Nobel Prize winner Paul Krugman, titled "Keynes's Difficult Idea", which is about a essay by FT columnist Martin Wolf: "Keynes offers us the best way to think about the financial crisis"
  • This post was largely inspired by a blog post by Berkeley economist Brad DeLong, titled "Things to Read by Keynes", which consists of an extensive and partially hyperlinked reading list of, well, things to read by Keynes.  Included are two letters Keynes wrote to FDR, in 1932 and 1938 (the latter DeLong discusses briefly here).  DeLong's post was in turn inspired by the following:
  • George Mason economist Tyler Cowen's "New MR book club - Keynes's General Theory", which he initiated about a month ago; Cowen has already posted on chapters one and two, three, five, and six (didn't see one for ch four).  Cowen is taking a break between semesters, but will start back up again in January.  I just ordered a copy of the book off Amazon, and hope to catch up to him!  (For a taste of the General Theory, DeLong posts an excerpt here)
  • Cowen mentions that the book club selection was inspired by this column by Harvard economist Greg Mankiw: "What Would Keynes Have Done?"  Krugman blogs Mankiw's column, under the title "The Keynsian Moment?" (That Mankiw and Cowen are both looking to Keynes is telling, since both fall to the right of the ideological spectrum, whereas Keynes is considered to fall on the left--as are Krugman and DeLong.)
  • Bruce Bartlett (as a member of the Reagan Adminstration, an architect of supply-side "Reaganomics") also published an essay (in Forbes) titled "What Would Keynes Do?" (which DeLong posts and discusses here)

That is more than enough to get us started.  I haven't read through most of the links above in detail--one motivation for this post was simply to collect them all in one place.

One last Keynsian quote.  Yale economist Robert Shiller's latest book "The Subprime Solution" opens with a timely passage from the Keynes's 1919 account of the Versailles Peace Treaty, "The Economic Consequence of the Peace":
A general bonfire is so great a necessity that unless we can make of it an orderly and good-tempered affair in which no serious injustice is done to anyone, it will, when it comes at last, grow into a conflagration that may destroy much else as well.
Much more on Shiller to come, as I finally finished "The Subprime Solution" last weekend, and hope/plan to post some summaries of Shiller's points.

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