Monetary non-neutrality and stabilisation policies 50 years after Lucas’s “expectations” paper: a roundtable discussion

https://www.tandfonline.com/eprint/K9WCXBHAJUUFAYXEE5ZV/full?target=10.1080/09672567.2022.2137552

With O. Blanchard, D. Laidler, A. Orphanides, and yours

organized and moderated by Pierrick Clerc and Hans-Michael Trautwein

#histecon #historyofecon #historyofmacro

2/3 Of course, Prescott sent an answer to Friedman's report:

"Studies documenting deviations from existing theory play an important
role in science as do replications of the studies using a different data set. Do
you reject such studies as being nonsubstantive?"

#historyofecon #histecon #macroeconomics #econtwitter #historyofmacro #Prescott

1/3 The Hodrick-Prescott filter paper was completed around 1978 and rejected several times:

-by AER referees
-then at the JMCB by no less than Milton Friedman, who thought it was "measurement without theory" (which he had supported against the Cowles in the 1950s, ironically)

Hodrick remembers:

#historyofecon #histecon #macroeconomics #econtwitter #historyofmacro #Prescott

3/3 Who said when , Ed #Prescott edition :

"It is exactly the point of these "equilibrium theories" that they be criticizable in this way, that their key parameters be interpretable in price-theoretic terms and thus comparable to estimates from data other than aggregative time series...are we to conclude it is bad work because a parameter if off by a factor of 10?"

(note: Gary is probably Gary Becker)

#historyofecon #histecon #macroeconomics #econtwitter #historyofmacro

2/3 Who said when on Ed #Prescott

#historyofecon #histecon #macroeconomics #econtwitter #historyofmacro

#As a teacher and supervisor of doctoral students, Ed is outstanding...Sims is willing to concede the [economic territory] to theorists; Prescott is not"

(also note the Cass dunk)