Causality and interdependence in Pasinetti's works and in the modern classical approach

Bellino, Enrico and Nerozzi, Sebastiano (2013): Causality and interdependence in Pasinetti's works and in the modern classical approach.

Abstract

The formal representation of economic theories normally takes the form of a model, that is, a system of equations which connect the endogenous variables with the values of the parameters which are taken as given. Sometimes, it is possible to identify one or more equations which are able to determine a subset of endogenous variables priorly and independently of the other equations and of the value taken by the remaining variables of the system. The first group of equations and variables are thus said to determine causally the remaining variables. In Pasinetti’s works this notion of causality has often been emphasized as a formal property having the burden to convey some deep economic meaning. In this work, we will go through those Pasinetti’s works where this notion of causality plays a central role, with the purpose to contextualize it within the econometric debate of the Sixties, to enucleate its economic meaning and to show its connections with other fields of the modern classical approach.

• Item Type: MPRA Paper
• Language: English
• Keywords: causality, interdependence, modern classical approach, Ricardo theory distribution, Keynes’ analysis, ‘given quantities’, surplus approach, structural dynamics, vertical integration
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B0 - General > B00 - General; B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B24 - Socialist ; Marxist ; Sraffian; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian

References

Asimakopulos A. (1983), Kalecki and Keynes on finance, investment and saving, Cambridge Journal of Economics, 7: 221-33.

Asimakopulos A. (1985), The role of finance in Keynes’ General Theory, Economic Notes, 14: 5-16.

Carabelli A. (1983), Keynes' Idea of the Possible: His Concept of Cause, Cambridge Journal of Economics.

Carabelli A. (1988), On Keynes’ Method, London, Macmillan.

Cavalieri D. (ed.)(1987-1988), Causalità e interdipendenza nella storia dell’analisi economica, Quaderni di storia dell’economia politica, V/1987, 3 – VI/1988, 1.

Cavalieri D. (2000), Causality in Economics, MPRA Working Papers, 44969.

Cellini R. (1995), Una nota sul ruolo dell’econometria nel carattere scientifico dell’economia politica, Note economiche, XXV, n. 2: 325-350.

Cesaroni G. (2001), The finance motive, the Keynesian theory of the rate of interest and the investment multiplier, The European Journal of the History of Economic Thought, 8, 1: 58-74.

Clark C. (1949), A system of equations explaining the Unites States trade cycle, 1921 to 1941, Econometrica, 17, 2: 93-124.

Costa G. (1977), Ricardo, Keynes, la causalità e la legge di Say – Alcune osservazioni e considerazioni sui ‘Saggi’ del professor Luigi L. Pasinetti , Studi economici, No. 2, Milano.

Davidson P. (1986), Finance, funding, saving and investment, Journal of Post-Keynesian Economics, IX: 101-10.

De Marchi N. and C. Gilbert (1989), History and methodology of econometrics, Oxford, Clarendon Press.

Drakopoulos A. and T. S. Torrance (1994), Causality and determinism in economics, Scottish Journal of Political Economy, 41, 2: 176-193.

Epstein R.J. (1987), A history of econometrics, Amsterdam, North-Holland.

Garegnani, P. (1983), The Classical Theory of Wages and the Role of Demand Schedules in the Determination of Relative Prices, American Economic Review, Vol. 73, No. 2, Papers and Proceedings of the Ninety-Fifth Annual Meeting of the American Economic Association.

Garegnani P. (1984), Value and Distribution in the Classical Economists and Marx, Oxford Economic Papers, Vol. 36, No. 2, pp. 291-325.

Garegnani, P. (2007) Professor Samuelson on Sraffa and the classical economists, The European Journal of the History of Economic Thought, Vol. 14, No. 2, pp. 181 – 242

Garofalo G. and A. Graziani (2004)(eds.), La formazione degli economisti in Italia (1950-1975), Bologna, Il Mulino.

Graziani A. (1984), The debate on Keynes finance motive, Economic Notes, 13: 5-32.

Graziani A. (1984), Keynes finance motive: a reply, Economic Notes, 15: 5-9.

Hoower K. D. (2008), Causality in economic and econometrics, The New New Palgrave Dictionary of Economics, II edition, Palgrave-Macmillan, Houndmills-Basingstoke (H) and New York, I: 719-728.

Kaldor N. (1956), Alternative Theories of Distribution, The Reviev of Economics Studies, Vol. XXIII(2), No. 61, pp. 83-100.

Keynes J.M. (1973), The collected writings of John Maynard Keynes, vol. XIV, London: Macmillan.

Klein L.R. (1950), Economic fluctuations in the United States 1921-1941, Cowles Commission, New York.

Kregel J.A. (1986), A note on finance, liquidity, saving and investment, Journal of Post-Keynesian Economics, IX: 91-9.

Lavista F. (2010), Misurare il mondo. Econometria e programmazione economica nel secondo dopoguerra, Quaderni Storici, 2: 477-500.

Leijonhufvud A. (2008), Between Keynes and Sraffa. Pasinetti and the Cambridge School, European Journal of the History of Economic Thought, 15: 529-538.

Lombardini S. (1952-1953), Finalità e limiti dell’analisi econometria secondo i recenti indirizzi, in Rivista internazionale di scienze sociali, 23, 5: 409-431; 24, 2: 132-151.

Lombardini S. (1955), Teoria e analisi econometria. Note in margine al Congresso di Uppsala della Società econometria, Rivista internazionale di scienze sociali, 26, 4: 300-321.

Lombardini S. (1956), Contributi econometrici all’analisi dinamica. Note in margine al Congresso di Kiel dell’Econometric Society, Rivista internazionale di scienze sociali, 27, 1: 1-11.

Morgan M. (1990), The history of econometric ideas, Cambridge, Cambridge University Press.

Parisi D. (2013), Econometrics and the first Italian econometrician: Luigi L. Pasinetti, mimeo, paper presented at the XII AISPE Conference, Florence, February 2013.

Pasinetti L.L. (1955), La funzione del consumo in alcuni modelli econometrici applicati ai cicli economici, Rivista internazionale di scienze sociali, 26: 397-421.

Pasinetti L.L. (1957a), Un nuovo modello econometrico per la rappresentazione del sistema economico statunitense, Rivista internazionale di scienze sociali, 28, 1: 57-62.

Pasinetti L.L. (1956), La funzione degli investimenti in alcuni modelli econometrici applicati ai cicli economici, Rivista internazionale di scienze sociali, 28, 2: 125-151.

Pasinetti L.L. (1957b), Nota intorno alle relazioni tra salari, profitti e occupazione in un processo di accumulazione di capitale, Rivista internazionale di scienze sociali, 28: 358-365.

Pasinetti Luigi L. (1960), A Mathematical Formulation of the Ricardian System, The Reviev of Economic Studies, Vol. XXVII(2), No. 73, pp. 78-98.

Pasinetti L.L. (1962), Rate of profit and income distribution in relation to the rate of economic growth, The Review of Economic Studies, Vol. 29, No. 4, pp. 267-279.

Pasinetti L. L. (1965), Causalità e interdipendenza nell'analisi econometrica e nella teoria economica, Annuario dell’Università Cattolica del Sacro Cuore – Anno Accademico 1964-65, Vita e Pensiero, Milano, pp. 233-250.

Pasinetti L.L. (1974), Growth and income distribution. Essays in economic theory, Cambridge, Cambridge University Press.

Pasinetti L. L. (1977), Lectures in the Theory of Production, Macmillan, London, Columbia University Press, New York.

Pasinetti L.L. (1981), Structural change and economic growth, Cambridge, Cambridge University Press.

Pasinetti L.L. (1993), Structural economic dynamics. A theory of the economic consequences of human learning, Cambridge, Cambridge University Press.

Pasinetti L.L. (2012), “Piero Sraffa and the Future of Economics”, Cambridge Journal of Economics, Vol. 36, No. 6, pp. 1303-1314.

Quadrio Curzio A. and Rotondi C. (2004), Sulle ricerche di economia politica in Cattolica: proiezioni specialistiche ed internazionali, in Garofalo G. and Graziani A. (eds): 361-422.

Quin D. (1993), Formation of econometrics: a historical perspective, Oxford, Oxford University Press.

Rey G.M. (2004), Gli studi di economia applicata e l’affermazione dell’econometria, in Garofalo G. and Graziani A. (eds.): 119-154.

Scazzieri R. (2011), The concept of ‘natural economic system’: a tool for structural analysis and an instrument for policy design, in Arena R. and P.L. Porta (2011)(eds.), Structural Dynamics and economic growth, Cambridge, Cambridge University Press: 218-240.

Simon H. (1953), Causal ordering and identifiability, in Hood W.C. and Koopmans T.C., Studies in econometric method, Cowles Commission, New York, Wiley.

Strotz R. H. and H. Wold (1960), Recursive versus non-recursive systems: an attempt at synthesis, Econometrica, 28: 417-427.

Terzi A. (1986-1987), The independence of finance from saving: a flow of funds interpretation, Journal of Post-Keynesian Economics, IX: 188-95.

Timbergen J. (1939), Les cycles économiques aux Etats-Units d’Amerique de 1919 à 1932, Verification statistique des theories des cycles économiques, II, Société des nations, Genève.

Tonveronachi M. (1983), J. M. Keynes. Dall’instabilità ciclica all’equilibrio di sottoccupazione, Roma, La Nuova Italia Scientifica.

Trevithick J.A. (1994), The monetary prerequisites for the multiplier: an adumbration of the crowding out hypothesis, Cambridge Journal of Economics, 18: 77-90.

Vercelli A. (1991), Methodological foundations of macroeconomics: Keynes and Lucas, Cambridge, Cambridge University Press.

Vercelli A. (2001), Epistemic causality and hard uncertainty: a Keynesian approach, Quaderni del Dipartimento di Economia Politica, Università di Siena, n. 330.

Wray. L. R. (1992), Alternative theories of the rate of interest, Cambridge Journal of Economics, 16: 69-89.