The Timeless Approach

Abstract

Modern economics has been purged of time. But what are the nature and limitations of this timeless approach to economic problems? In discussing these issues I will explore the nature of economic theory, the way in which it is applied to the real world, and how policy prescriptions are formulated by economists, all by focusing upon the central problems – that are taken up in Part II – of economic growth and fluctuations. The theoretical discussion traces the development of growth models from Adam Smith to the ‘new’ growth theory of the late 1980s and early 1990s. The examination of applied economics is concerned with the emergence of growth accounting in the 1960s; and the policy section focuses upon the changing instruments of policy formation during the last few millennia, together with the way in which economists have related policy to the key issues of growth and fluctuations in more recent times.

In wandering mazes lost

(John Milton, 1667)