Economics News with a Historical Perspective
August 27, 2014
The Econ Review features a historical perspective on economics news and opinions with daily updates. All original material is copyrighted. Off-site references open in new windows.
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U.S. Budget Deficit
In the News
The Phillips Curve
John Cochrane uses very similar Phillips Curve charts to review recent history and current issues.
Euro Roller Coaster
The wild ride continues.
The latest news and views.
President Nixon Imposes Wage and Price Controls
August 15, 1971. In a move widely applauded by the public and a fair number of (but by no means all) economists, President Nixon imposed wage and price controls. The 90 day freeze was unprecedented in peacetime, but such drastic measures were thought necessary. Inflation had been raging, exceeding 6% briefly in 1970 and persisting above 4% in 1971. By the prevailing historical standards, such inflation rates were thought to be completely intolerable.
The Keynesians vs. the Monetarists
November 14, 1968. The debate between the Keynesians and the monetarists reached a milestone in an exchange between Milton Friedman and Walter W. Heller. The Seventh Annual Arthur K. Salomon Lecture at the Graduate School of Business Administration at New York University is recorded in Monetary vs. Fiscal Policy: A Dialogue, Milton Friedman and Walter W. Heller, W.W. Norton & Company, Inc.: New York (1969).
President John F. Kennedy
1960. The election of John F. Kennedy marked the entry of university professors (including a fair number of Keynesians) into the Federal government. Kennedy's Council of Economic Advisors was Walter Heller, Kermit Gordon, and James Tobin. The CEA staff included senior economists Arthur Okun and Robert Solow. (Tobin and Solow later received Nobel Prizes.) The major economic event arising from this influx was the Kennedy-Johnson tax cut, which took effect during the Johnson administration.
The Classical Model
The Classical Model of Production and Employment focuses on the supply and demand for a single factor of production, labor, assuming that capital is fixed in the short run. Equilibrium in the labor market then determines the real wage rate and the level of output. This model provides an important reference point for understanding the innovations in the Keynesian models.
Additional models of interest are available at Classic Economic Models.
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