Tiago Mata

The Solow Residual as a Black Box: Attempts at Integrating Business Cycle and Growth Theories

Robert Solows “Technical Change and the Aggregate Production Function” (1957) has had an enduring influence on macroeconomics. In this article, we examine the history of fluctuations in growth theory through the story of the “Solow residual” as a “black box.” We show that after Solows seminal contribution, the “residual” became a reproducible object. Losing its ties with the intentions and beliefs of its originator, it was given new and unexpected uses in other branches of macroeconomics. While the residual had always remained a problematic result in growth accounting, its borrowing by real business cycle theorists sought to establish it as a definitive representation of technology. As the claims of the New Classicals came under scrutiny, so did the status and meaning of the object residual. The integration of growth and cycle has since been shaped by the opening of this “black box.” Edward Prescott has remained committed to his earlier interpretation of the “Solow residual” as stochastic technology. Others have sought to bracket multiple supply shocks as the residual, abandoning attempts to decompose it. To the New Keynesians the “residual” has been more evidence of market power and the need to integrate rigidities in the study of the cycle.

The role of oral history in the historiography of heterodox economics

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Cultures of Expertise and the Public Interventions of Economists

The essays in this volume examine the economist as public intellectual. Rather than assessing the changing status of the public intellectual in culture or attempting to define the identity of the public intellectual, our approach is to study the public interventions of economists, that is, the encounters between economists and their publics. In the volume we constrain ourselves to the long twentieth century in the United States and the United Kingdom, fenced at one end by the Progressive Era and Fabianism and the ongoing economic crisis at the other. Economists then and now have been occupants of the public sphere, and to understand their encounters with the public we must appreciate the expectations they bring to the meeting and the institutional contexts that enable the encounters. The unifying claim of our collection is that economists’ public interventions have been of profound consequence for both the structure and the content of the public sphere.

Trust in independence: The identities of economists in business magazines, 1945–1970

The cultural authority of social science hinges on its public representation. In postwar United States of America, the business media were influential promoters of the appreciation of economics. This essay examines the work of a journalist and editor, Leonard S. Silk, and a magazine, Business Week, to reveal how trust in economics was established in the 1960s. Electing a cast of representatives of the economics profession, the media examined their biography, character and social identity. Economists were first assigned the identity of assistants to business planning, as forecasters. Soon after, economists were represented as experts on the fiscal management of the economy, as government advisers. Overall, trustworthiness in the media was a measure of the perceived independence of economists from their employers and from ideology.

Capitalist Threads: Engels the Businessman and Marx's Capital

This essay illuminates a neglected aspect of Friedrich Engelss life: his work at his familys textile firm, Ermen & Engels, in Manchester, the hub of the cotton industry in the mid-nineteenth century. We argue that Engels was a merchant and an intelligencer with a detailed, comprehensive understanding of products and the movements of goods, orders, and prices in the global cotton trade. The statistical insights Engels gleaned on matters such as machinery depreciation and reinvestment, his contextualization of capitalism within a unified world market, and his recognition of the tendencies toward overproduction that threatened economic crisis, all contributed to shaping key ideas and themes of Karl Marxs Capital Volumes I and II, leaving a lasting imprint on Marxist political economy.

Introduction to the Symposium on the Contributions of Business to Economics

Historians of economics have largely overlooked the role of businesses in the formation of economic ideas. Indeed, this is true even of historians who are most attuned to the crucial role non-economists have played in shaping the ideas and practices of economics. For example, in his (1999) essay: “How should we write the history of twentieth-century economics?” Roy Weintraub omits any mention of the role of businesspersons. In keeping with his own work, Weintraub urges historians to examine not only the theoretical ideas, but also how these ideas have been translated across the economics profession into communities comprising administrators and policymakers. He emphasizes: “Discussing economic thought in the twentieth century from this perspective would encourage writing histories of eleemosynary foundations, government agencies, political organizations, private political advocacy groups, and a whole range of journalistic practices and news-reporting strategies” (148). We suggest that businesses should be added to Weintraub’s list. This is not to suggest that historians have not examined the business-economics nexus because they certainly have, primarily in two ways.

Economics— and History—as Communicative Action

Historians of economics are helping us understand how economic knowledge is made. In concert with trends from the sociology and history of science, historians meticulously examine the practices of economists. But as they have trained their attention to the scales and sites where those stories are told, historians have lost sight of the travels of knowledge beyond lecture halls and scholarly journal pages. To explore that terrain I propose we reconceive scientific practice as communicative action. By studying the social lives of books, pamphlets, and newsprint that cross back and forth the popular and scholarly divide, we can examine how economics participates in the making of mass culture.

Science-mart: privatizing American science

its failings, is, as Frydman and Goldberg seem to acknowledge in their rather gentle handling of Muth, a legitimate attempt to apply the fundamental insight; many versions of behavioral economics (those that focus on irrationality, cognitive failure, error and mechanical rules of thumb) are not. Frydman and Goldberg are correct that the rational-expectations and efficient-markets hypotheses are not adequate in the face of uncertainty. Lucas and many in the mainstream do not disagree. If they stuck to their models under the great duress of the current crisis, it arose less from ‘psychosis’ than from the belief that economics had nothing useful to say about uncertainty. Lucas always stressed that the development of economics is limited by its toolkit. Frydman and Goldberg’s achievement in the current book, as in their earlier work, is to enlarge the economist’s toolkit and to show that there is something useful to be said about uncertainty after all.