Over a period of twelve years, Barbara Bergmann developed several models of the labor market using microsimulation, eventually integrated in a 'Transactions Model' of the entire US economy, built with Robert Bennett and published in 1986. The paper reconstructs the history of this modelling enterprise in the context of the debates on the microfoundations of macroeconomics and the role of macroeconomic expertise from the 1970s stagflation to the late 1980s. It shows how a political element-her focus on distributional effects of policies-was central to her criticism of macroeconomic modelling and how both her epistemic and political positions were increasingly marginalized in the 1980s.
In this article, we document the way modellers navigate between modelling choices, based on (1) the modellers’ own dispositions, which depend on their training, their academic standards, and their integration in national or international professional networks; (2) the visions of policymakers and executives at different levels of the institution’s hierarchy; and (3) the model’s function, which is shaped by the institution’s organisation and mandates—any model has to be (at least partly) successful in the accomplishment of this function. We use as a case study the Bank of England and the different macroeconometric models developed within the Bank until the most recent one (COMPASS). This case study helps us to better understand the constraints to which modellers are confronted.
Lucas and Sargent’s “After Keynesian Macroeconomics” is considered as a cornerstone of macroeconomics history and is supposed to have seriously undermined “Keynesian” approach to macroeconometric modelling. I study the context of this article, its writing, its presentation in a conference with many advocates of large-scale models and the debates that followed. I demonstrate that the issue of stagflation was closely linked to Lucas and Sargent’s argument, and the opposition of “Keynesians” relied on their different interpretation of stagflation. I show this interpretation of stagflation led to a different research program, which has been overlooked by history of macroeconomics.
The purpose of this article is to provide a better explanation of the reactions of the Keynesian macroeconometricians to the Lucas Critique in the years following its publication and, finally, to provide a better explanation of the success of the Lucas Critique. Our explanation will be based on an interpretation of “Econometric Policy Evaluation” both as a positive and as a prescriptive statement. We think that this duality is present as well in Lucas's paper and in the reactions to it. This allows us to better understand why Kenesians did not provide a global, pertinent, convincing response to Lucas, which weakened their position inside the profession.