Hostname: page-component-cd9895bd7-dk4vv Total loading time: 0 Render date: 2024-12-28T08:03:10.380Z Has data issue: false hasContentIssue false
  • English
  • Français

FROM BUSINESS CYCLE THEORY TO THE THEORY OF EMPLOYMENT: ALVIN HANSEN AND PAUL SAMUELSON

Published online by Cambridge University Press:  20 December 2016

Roger E. Backhouse
Roger E. Backhouse*
Affiliation:
University of Birmingham, United Kingdom, and Erasmus University Rotterdam, The Netherlands.
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper discusses the transition from a perspective in which the determination of income, output, and unemployment was seen as a part of the theory of the business cycle to one in which they are determined independently of the cycle, a transition that meant that the theory of output came to be more sharply separated from the theory of growth. In place of theories of the business cycle, which were rooted in structural changes associated with growth, business cycle theory came to be more of an adjunct to short-run theories. Whereas Arthur Cecil Pigou and John Maynard Keynes were already arguing in terms of the short run by the early 1930s, some American economists continued to think in terms of the business cycle until the very end of the 1930s. This paper shows that for Alvin Hansen and Paul Samuelson, both highly influential figures in postwar economics, the shift came about only because of the need to adduce structural factors to explain the recession of 1937–38 and wartime experience. The focus on income determination as the central macroeconomic problem in Samuelson’s textbook reflected the change in thinking that had happened during the 1940s.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 39 , Special Issue 1: Special Issue: Business Cycles and Economic Growth , March 2017 , pp. 89 - 99
Copyright
Copyright © The History of Economics Society 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Works in Samuelson 1966 are cited as “CSP 2:n” where n is the article number.Google Scholar
Backhouse, Roger E. Forthcoming. Maker of Modern Economics: Paul A. Samuelson. Volume 1, Becoming Samuelson, 1915–1948. Oxford: Oxford University Press.Google Scholar
Backhouse, Roger E., and Boianovsky, Mauro. 2016. “Secular Stagnation: The History of a Macroeconomic Heresy.” The European Journal of the History of Economic Thought. http://dx.doi.org/10.1080/09672567.2016.1192842.Google Scholar
Clark, John Maurice. 1926. Social Control of Business. Chicago: University of Chicago Press.Google Scholar
Hansen, Alvin H. 1921. “Cycles of Prosperity and Depression in the United States, Great Britain and Germany: A Study of Monthly Data, 1902–1908.” PhD dissertation. University of Wisconsin, Madison, WI.Google Scholar
Hansen, Alvin H. 1927. Business Cycle Theory: Its Development and Present Status. Boston: Ginn and Co.Google Scholar
Hansen, Alvin H. 1934. “The Flow of Purchasing Power.” In Columbia University Commission, ed., Economic Reconstruction. New York: Columbia University Press, pp. 210–237.Google Scholar
Hansen, Alvin H. 1939. “Economic Progress and Declining Population Growth.” The American Economic Review 29 (1): 1–15.Google Scholar
Hansen, Alvin H. 1953. A Guide to Keynes. London: McGraw-Hill.Google Scholar
Hansen, Alvin H., and Tout, Herbert. 1933. “Annual Survey of Business Cycle Theory: Investment and Saving in Business Cycle Theory.” Econometrica 1 (2): 119–147.Google Scholar
Hansen, Alvin H., Boddy, Francis H., and Langum, John K. 1936. “Recent Trends in Business-Cycle Literature.” The Review of Economics and Statistics 18 (2): 53.CrossRefGoogle Scholar
Keynes, John Maynard. [1930] 1971. A Treatise on Money. The Collected Writings of John Maynard Keynes. Volumes V–VI. London: Macmillan.Google Scholar
Keynes, John Maynard. [1936] 1972. The General Theory of Employment, Interest and Money. The Collected Writings of John Maynard Keynes. Volume VII. London: Macmillan.Google Scholar
Mehrling, Perry. 1997. The Money Interest and the Public Interest : American Monetary Thought, 1920–1970. Cambridge, MA: Harvard University Press.Google Scholar
Pigou, Arthur Cecil. 1933. The Theory of Unemployment. London: Macmillan.Google Scholar
Samuelson, Paul A. 1939a. “Interactions Between the Multiplier Analysis and the Principle of Acceleration.” The Review of Economics and Statistics 21 (2): 75–78. CSP 2:82.Google Scholar
Samuelson, Paul A. 1939b. “A Synthesis of the Principle of Acceleration and the Multiplier.” Journal of Political Economy 47 (6): 786–797. CSP 2:83.Google Scholar
Samuelson, Paul A. 1942 “Fiscal Policy and Income Determination.” The Quarterly Journal of Economics 56 (4): 575–605. CSP 2:86.Google Scholar
Samuelson, Paul A. 1943. “A Fundamental Multiplier Identity.” Econometrica 11 (3/4): 221–226. CSP 2:90.CrossRefGoogle Scholar
Samuelson, Paul A. 1948. Economics: An Introductory Analysis. New York: McGraw-Hill.Google Scholar
Samuelson, Paul A. 1959. “Alvin Hansen and the Interactions Between the Multiplier Analysis and the Principle of Acceleration.” The Review of Economics and Statistics 41 (2): 183–184. CSP 2:84.Google Scholar
Samuelson, Paul A. 1966. The Collected Scientific Papers of Paul A. Samuelson. Volume 2. Edited by Stiglitz, J. E.. Cambridge, MA: MIT Press.Google Scholar