Author Archives: Modibo Camara

Discontinued

We’re discontinuing the journal club as of this semester. After some discussion. we’ve reached the conclusion that the level of participation did not warrant the required preparation.

My personal opinion remains that there should be a place for students interested in economics to express and discuss those interests. There is always the Penn Journal of Economics, and regular coffee chat w/ professors that the UES intends to restart, but neither fully capture the objective of the journal club. If you have any ideas – or just want to state your interest – please feel free to email me at modibo@sas.upenn.edu.

Thanks for everyone who came and allowed us to have at least a few genuinely interesting conversations!

Discussion 3/2/15 – The Neoclassical Revolution and History of Economic Thought

The UES Journal Club will host a session on the Neoclassical Revolution.

Date: Monday, March 2, 2015.

Location: Huntsman (JMHH) G50

Time: 7:00 PM

Topic: Economists today argue in the world of models, where rational individuals encounter each other on the marketplace and buy and sell commodities to each other. The goal of each individual is to maximize his/her utility. But where do the assumptions of these economists come from? In this session, we will discuss how modern economic thought came into being by discussing the origins and evolution of economic thought, beginning with Aristotle, Colbert, Quesnay, Smith, Malthus, Ricardo, Marx, and then exploring the ‘Methodenstreit’ (dispute of methods) between the German Historical School (Schmoller) and the neoclassical school (Jevons, Marshall, Walras, Menger). We will conclude by watching a video that will lay out the philosophical differences between Hayekian and Keynesian economic thought. There will be ample time for discussion during the presentation and at the end. See you there.

Suggested readings: Milonakis and Fine (2009), “From Political Economy to Economics”, a superb rendition of the history of economic thought. (Free download in https://is.vsfs.cz/el/6410/leto2013/BA_ETD/um/3968033/From_Political_Economy_to_Freakonomics.pdf)

The Wikipedia article on the history of economic thought, which is very brief and concise http://en.wikipedia.org/wiki/History_of_economic_thought

(Posted on behalf of Larry Liu)

Discussion 2/9/15 – The Global Financial Crisis: Did Macroeconomics Fail?

Our first discussion is slated for Monday, Feb. 9th at 7pm, in SHDH 213. I will be taking the lead on this one, so feel free to email me (modibo@sas.upenn.edu) with any suggestions.

Topic

While the financial crises of 2007-2008 are a massive subject in and of themselves, we will focus on evaluating the field of macroeconomics in light of these events. You have surely heard claims, by economists and non-economists alike, that the crisis, particularly in the U.S., represented a fundamental failure on the part of economists to prescribe policy and predict market behavior. Others, like Paul Krugman, used the opportunity to push (probably longstanding) criticisms against the field, particularly on the affinity for technically-sophisticated but otherwise questionable theoretical models. Despite evident failures in both policy and prediction, is a shift in our approach to macroeconomics really necessary? What changes have occurred since 2009? What changes should still occur, if any?

When using the financial crisis to criticize macroeconomics, another important question arises. Was the crisis predictable, even in theory? Proponents of the efficient markets hypothesis might answer in the negative. Others suggest that the crisis itself is predictable, yet the specific timing isn’t. And it’s certainly possible to devise scenarios where even the widespread expectation of an upcoming crisis isn’t sufficient to prevent its occurrence, nor even its continued aggravation. Do these arguments imply we are unable to predict and/or prevent market collapses, even with (or because of) the assumption of rational expectations?

Slides

Here are the brief presentation slides I made for this discussion: JC 2-9-15

Readings

The primary reading for this session is “How did Economists get it so Wrong?” by Paul Krugman (2009).

The secondary (i.e. optional) reading is John Cochrane’s (2009) response, “How did Paul Krugman get it so Wrong?”.

For background on the global financial crisis, we recommend two articles by The Economist magazine, “The Slumps that Shaped Modern Finance” and “The Origins of the Financial Crisis”.

For background on the use/role of models in economics, we recommend Paul Pfleiderer’s (2014), “Chameleons: the Misuse of Theoretical Models in Economics and Finance”, and “Economic Models as Analogies” by Gilboa et al. (2011). The latter is co-authored by Prof. Postlewaite, whom you may recognize from ECON 212.