Tuesday, December 24, 2013

Neil Wallace

This post by Dave Altig is excellent. It links to two interviews with Neil Wallace, one in the Minneapolis Fed's Region magazine, and the other a forthcoming Macroeconomic Dynamics interview.

Neil has been a key influence on how I, and people who work in my field of study, think about the world. Today, I still own a well-worn copy of "Models of Monetary Economies," which is a watershed conference volume that changed how many economists thought about monetary economics. Neil is perhaps under-appreciated by the mainstream of the economics profession, but anyone who has been in a seminar room with him knows that few can match Neil in terms of deep and careful thinking about economics.

The two interviews are excellent reading, in many ways. If you look at nothing else, at least read the first section on microfoundations of macro in the Minneapolis Fed interview.


  1. Stephen, I do have a question if I may ask.
    The pdf copies of "Models in Monetary Economies" unfortunately do not say when this conference volume was published - it hints to late 70s or very early 80s.
    My question is: is this still a useful tome to start learning about current monetary issues or is it only of "historical" value to see the history of economic thought about monetary issues? Thanks.

    1. If my memory serves me correctly, the conference was in 1979, and the book was published in 1980. Some of the papers, for example Townsend's, were post-conference contributions. What's in the book is remarkably diverse - there are overlapping generations models, an early cash-in-advance model of Lucas's, an early version of a Bewley incomplete markets model, Townsend's turnpike model, and more. For any monetary theorist, it's key reading material. But to understand what people are working on today, it's not necessarily the place to start. The introduction, and Wallace's paper in the volume, give you some important insight into Neil's ideas, though.

    2. What *would* a 2nd year PhD syllabus in Monetary Economics look like?

    3. That depends who is teaching it. This is what I did this fall, in an advanced PhD class. This is after the students had been warmed up in the first year with some basic monetary economics - cash-in-advance, Lagos-Wright models. You can see that it's a more general course in financial economics with frictions - the theoretical side at least. Not the way we used to think of "monetary" economics.


  2. Wallace interview was fascinating. And what a contrast in the self-effacement from a genuine heavyweight to the shameless self-promotion of the lightweight dilletantes such as Rowe, Smith and Sumner.

  3. I agree with you, Neil Wallace is definitely under-appreciated in the field. He's one of the four horseman in Minnesota, with the other three already received the Nobel.