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The eclipse of the goal of zero inflation

Leeson, R. (1997) The eclipse of the goal of zero inflation. History of Political Economy, 29 (3). pp. 444-496.

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William J. Barber's study of Alvin H. Hansen (1887-1975) emphasized the importance of the intellectual transformation that led to the "'Keynes-Hansen intellectual system that appeared to have compelling diagnostic and prescriptive power" (Barber 19X7. 205).1 Between 1936 and 1938, Hansen became a convert to Keynesian economics, and this led to the Hicks-Hansen IS-LM model. Subsequent authors (including Phillips in the 1950s) concluded that this approach, being an equilibrium model, did not capture the disequilibrium "essence" of Keynes (Lipsey 19X I, 547). The purpose of this article is to highlight a second intellectual transformation in Hansen's policy advocacy, and to suggest the possibility that, once again, Hansen contributed to a Keynesian economics that was in conflict with Keynes's stated position. I will also discuss a parallel transformation in the policy advocacy of Sumner H. Slichter ( 1892-1959), who was, like Hansen, a Harvard University professor.

Item Type: Journal Article
Publisher: Duke University Press
Copyright: © Duke University Press
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