The Revival of Laissez-Faire in American Macroeconomic Theory
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The Revival of Laissez-Faire in American Macroeconomic Theory

A Case Study of the Pioneers

9781840646061 Edward Elgar Publishing
Sherryl Davis Kasper, Professor of Economics and Chair, Division of Social Sciences, Maryville College, US
Publication Date: 2003 ISBN: 978 1 84064 606 1 Extent: 192 pp
This book provides the definitive account of this watershed and traces the evolution of laissez-faire using the cases of its proponents, Frank Knight, Henry Simons, Friedrich von Hayek, Milton Friedman, James Buchanan and Robert Lucas.

By elucidating the pre-analytical framework of their writings, Sherryl Kasper accounts for the ideological influence of these pioneers on theoretical work, and illustrates that they played a primary role in founding the theoretical and philosophical use of rules as the basis of macroeconomic policy. A case study of the way in which interwar pluralism transcended to postwar neoclassicism is also featured.

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Contents
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In the 1970s, the Keynesian orthodoxy in macroeconomics began to break down. In direct contrast to Keynesian recommendations of discretionary policy, models advocating laissez-faire came to the forefront of economic theory. Laissez-faire no longer stood as an exceptional policy endorsed for rare occurrences of market clearing; rather it became the policy standard. This book provides the definitive account of this watershed and traces the evolution of laissez-faire using the cases of its proponents, Frank Knight, Henry Simons, Friedrich von Hayek, Milton Friedman, James Buchanan and Robert Lucas.

By elucidating the pre-analytical framework of their writings, Sherryl Kasper accounts for the ideological influence of these pioneers on theoretical work, and illustrates that they played a primary role in founding the theoretical and philosophical use of rules as the basis of macroeconomic policy. A case study of the way in which interwar pluralism transcended to postwar neoclassicism is also featured.

The volume concludes that economists ultimately favoured new classical economics due to the theoretical developments it incorporated, although at the same time, since Lucas uncritically adapted some of the ideas and tools of Friedman, an avenue for ideological influence remained.

Tracing the evolution of American macroeconomic theory from the 1930s to the 1980s, this book will appeal to those with an interest in macroeconomics and in the history of scholars associated with the Chicago School of economics.
Critical Acclaim
‘This is an important contribution to the history of thought in macroeconomics. The chapters on Lucas and Simon are lucid and sketch the development of laissez-faire policy simultaneously.’
– A.V. Katos, Economic Issues

‘This is a nicely written, succinct overview of libertarian views on American macroeconomic theory by institutional economist Sherryl Davis Kasper.’
– Rick Tilman, Journal of Economic Issues

‘I find The Revival of Laissez-Faire informative, especially as a survey of the ideas of the six economists, each of whom was no doubt at the front in the intellectual battle over laissez-faire. The book is a good source on an important slice of twentieth century economics for undergraduate history of economics course.’
– J. Daniel Hammond, Journal of the History of Economic Thought
Contents
Contents: 1. Introduction 2. Frank Hyneman Knight, The Moral Philosopher 3. Henry Calvert Simons, Author of the Blueprint 4. Friedrich von Hayek and the Austrian Influence 5. Milton Friedman and Monetarism 6. James Buchanan and Public Choice Theory 7. Robert E. Lucas, Jr. and New Classical Economics 8. Conclusion References Index
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