Retrospectives Whatever Happened to the Cambridge Capital Theory Controversies?

We argue that the Cambridge capital theory controversies of the 1950s to 1970s were the latest in a series of still-unresolved controversies over three deep issues: explaining and justifying the return to capital; Joan Robinson's complaint that, due to path dependence, equilibrium is not an outcome of an economic process and therefore an inadequate tool for analyzing accumulation and growth; and the role of ideology and vision in fuelling controversy when results of simple models are not robust. We predict these important and relevant issues, latent in endogenous growth and real business cycle theories, will erupt in future controversy.

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New Keynesian Macroeconomic Model and Monetary Policy in Pakistan

The Pakistan Development Review ◽

10.30541/v54i1pp.55-71 ◽

2015 ◽

Vol 54 (1) ◽

pp. 55-71

Author(s):

Shahzada M. Naeem Nawaz ◽

Ather Maqsood Ahmed

Keyword(s):

Monetary Policy ◽

Business Cycle ◽

The State ◽

Monetary Authority ◽

New Keynesian ◽

Real Business Cycle ◽

Structural Shocks ◽

Svar Model ◽

Forward Looking

The New Keynesian (NK) models have advantage over the Real Business Cycle (RBC) models as they allow rigidities in the structure of the model, hence provide built-in mechanism to incorporate the structural shocks. The estimation of the NK model for Pakistan’s economy remains a relatively unexplored area. This study attempts to estimate a closed economy version of the NK model using robust econometric technique. On the empirical side macroeconomic dynamics have been investigated in response to unanticipated monetary shock. The reaction of the monetary authority (the State Bank of Pakistan) in response to structural shocks has been assessed by exploring the role of forward looking expectations. The SVAR model has been employed to estimate the structural parameters. The response of macroeconomic aggregates to structural shocks has also been simulated along with discussing the forecast error variance decomposition. The role of forward looking expectations is found to play prominent role in the prevailing market structure of the country. The State Bank of Pakistan (SBP) has been found to respond to shocks after a lag of one or more periods indicating time inconsistency problem which is due to discretionary monetary policy stance being adopted by the monetary authority. The distorted beliefs of economic agents about the stance of monetary policy have pointed towards weak effectiveness of the monetary policy. The results suggest that the SBP would have to adopt an independent and transparent monetary policy by following some sort of Taylor-type rule. JEL Classification: C32, C51, E52, E58 Keywords: New Keynesian Models, Real Business Cycle Models, Forward Looking Expectations, SVAR Model, Price Puzzle

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On the role of money in real business-cycle models

Applied Economics ◽

10.1080/00036849500000101 ◽

1995 ◽

Vol 27 (12) ◽

pp. 1187-1199 ◽

Cited By ~ 1

Author(s):

Kovit Charnvitayapong ◽

Magda Kandil

Keyword(s):

Business Cycle ◽

Real Business Cycle

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The role of energy in real business cycle models

Journal of Monetary Economics ◽

10.1016/0304-3932(92)90011-p ◽

1992 ◽

Vol 29 (2) ◽

pp. 173-189 ◽

Cited By ~ 205

Author(s):

In-Moo Kim ◽

Prakash Loungani

Keyword(s):

Business Cycle ◽

Real Business Cycle

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The Role of Endogenous Growth Hormone-Releasing Hormone in Acromegaly

Yearbook of Endocrinology ◽

10.1016/s0084-3741(08)70225-7 ◽

2007 ◽

Vol 2007 ◽

pp. 426-428

Author(s):

M.E. Molitch

Keyword(s):

Growth Hormone ◽

Endogenous Growth ◽

Growth Hormone Releasing Hormone ◽

Releasing Hormone

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Whatever Happened to the Cambridge Capital Theory Controversies? (With comments by L. Pasinetti, F. Fisher, J. Felipe and J. McCombie, R. Greenfield and reply by the authors)

Voprosy Ekonomiki ◽

10.32609/0042-8736-2009-8-4-27 ◽

2009 ◽

pp. 4-27

Author(s):

A. Cohen ◽

G. Harcourt

Keyword(s):

Economic Theory ◽

Economic Thought ◽

Point Of View ◽

Chronological Order ◽

Capital Theory

The article written by the well-known theorists and historians of economic thought contains a detailed overview of the Cambridge capital controversy, which had raged from the mid-1950-s through the mid-1970-s. The authors track the origins of the controversy and cover arguments of both sides in chronological order. From their point of view, the discussion hasnt been resolved, and its main underlying aspects were ideological beliefs and fundamental methodological controversies on the nature of equilibrium and on the role of time in economic theory. The article is published with comments written by other leading theoreticians.

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