Economics focus

摘要

Economic ups and downs have always been a fact of human life. The Book of Genesis refers to "seven years of plenty" followed by "seven years of famine" in the land of Egypt. Only in the past 50 years or so, however, have economists used technical mathematical models to explain macroeconomic fluctuations. This year's Nobel prize, awarded on October nth to an American, Edward Prescott, of Arizona State University, and a Norwegian, Finn Kydland, of Carnegie Mellon University, honours research that has helped improve the practice of economic policy, as well as economists' understanding of booms and busts. The two professors' work is based on a reconsideration of some of the ideas of John Maynard Keynes, an English economist whose theories held sway in the two or three decades after the second world war. His "General Theory of Employment, Interest and Money" laid out themes that were heavily informed by the Great Depression of the 1930s. One was that economic recessions are caused in large part by a lack of "aggregate demand", thanks perhaps to infectious bouts of mass pessimism.