I'd written this in College, and it was published in a newsletter of the Economics Society. But I think today, as I put behind a semester of introductory macro, is a rather auspicious time to post it here!
The Ballad of Macroeconomics
(With apologies to - and respect for - all those heretics who do not find a mention here. Karl Marx, Please note.)
Content the whole world was, there was no excess or glut,
For all that was grown was eaten, and all the shops then shut!
This the genius of Ricardo, with eyes so discerning saw,
And what Jean Say had had to say, quickly became a law.
But providence sought to turn the tide, and who could hold its reigns,
Except, perhaps, the multifarious man, the insuperable J M Keynes.
In doldrums lay the hopes of masses, the holiday could not be so long,
When riding came the Don from Cambridge, to the tune of the saviour's song.
His magnum opus within its bounds, did many a novelty hide,
But what transpired to the more humble minds, was what was actually tried:
It would not do good, as things stood, to pay less to the already poor,
'stead it was needed, the Don conceded, that the government dished out more.
Countered for its irreverent miss of the market's glorious lore,
there's no denying, in fervour or note, the heresy did in fact score.
But what looked slick and seemingly sound, perhaps for its eloquence profound,
Was actually obsure, perplexingly stiff, the best brains of the time it did confound.
The apparent chaos had to be tamed, the race was on to resolve the fix,
Many a brave soldiers did their mighty swords wield, but emerged glorious the young John Hicks.
His uncanny arms of remarkable ease, IS and LM their names,
did many shock and many appease, for they so resembled Marshallian games.
The markets two, of goods and money, summed up adroitly into lines distinct,
he found a way to formally say what in the past seemed to defy instinct.
Jumping across the mighty Atlantic, another kingdom did unconquered endure,
the eccentric monarch had firmly averred: with more money will the prices soar.
But as it emerged from its treacherous past, an entire generation forsaken,
It might not come as a drastic surprise, that the kingdom’s foundations were shaken.
And even as the new order found new converts in the new land,
this young blood crew comprised a few who sought an intermediate stand.
So appeared on the scene, with his calculus of choice, the erudite, young lad Paul,
‘Revealed’ in his potent text was the science of wealth, for all.
He did have doubts, but could not resist Hicks’s equilibr'ating temptation,
So in his instructive Economics he presented the Keynesian Cross to the nation.
Nonetheless, he did reconcile, and Fisher he did not have to shun,
For Keynes stood strong for immediate need, but faltered in long-run.
He wasn’t alone in this brave new world, several others cannot be given a miss,
With Solow, Tobin, Modigliani and more, he formed the neoclassical synthesis.
The order in the system realised, smart actuaries skilfully seized
Every opportunity to capture all that, which previously had eluded and teased.
Mustering hundreds of numbers and series, these econometricians painfully explored
How the economy actually ran, beyond the chalk-dust of the blackboard.
But just when the waters appeared to be settling, Friedman decided to dissent,
In the hallways of Chicago, a monetary past was documented to disrupt the consent.
The market was uncertain already, why must unsaid shocks make it more flighty
Governments must not overrate themselves, professed the Chicago deity.
You can fool people for a few years perhaps, but they will finally sense the design,
And once they form their predictions better, the Philips curve would be a vertical line.
The new classicals joined the fray, to reveal of all Keynes’s machinations,
And dawned into the larger world, the search for microfoundations.
To divulge the entire architechture, they said, we must proceed brick by brick,
So endow each man with the rational gene, and here again did Friedman tick.
But going a step further, averred the likes of Lucas, Sargent and Hall,
That even the labour market does clear so ideally employment should never fall.
In their masterly rigor they showed, using apparatus sophisticated and sound,
With agents looking ahead enough, money couldn‘t really make the world go round.
As the ivory towers saw it now, the Keynesian construct was defective,
But all that the resurrection required was another change in perspective.
Once again it was considered that supply might overshoot the demand,
But with the rational gene still throbbing strong, the inconsistency was tough to command.
In valiant attempts did some early scouts, tried to revive the old, lost fables,
Resorting to their very predecessors’ kits, they hoped to turn the tables.
They might not have succeeded in their endeavors but the battle wasn’t lost on them,
For after them, in waves anew, many an insurgency did stem.
As Fischer tried to counter the claim that fed’s actions couldn‘t be a cause for cheer,
A newer crop tried to dwell at length on why the markets might not clear.
From efficiency wages to menu costs, to analysis of market power anew,
Theory and practice freely mix, for the likes of Akerlof, Blanchard and Mankiw.
We must not leave out one single man, who in his semi-inebriated verve,
Of an uptown restaurant napkin had once sketched, the tenuous laffer curve.
Many a surfs have come and gone, broken noisily on this ocean’s shore,
But it appears from recollections of the past - there will always be scope for more.
And if you think it has all been a waste, and you could not care about this less,
Blame it all on Adam ladies! for its his concoction, this entire mess!
P.S. For those interested, a good introduction to the history of macroeconomic thought is Mankiw's short history of the profession as we know it. For another take, here is a rather well known QJE article by Blanchard. There is considerable debate in the history of ideas in macroeconomics and not everyone agrees with Blanchard. A Google search would help. A more detailed discussion of the evolution of modern macro is here.
