Woodford's Interest and Prices from the Perspective of the History and Methodology of Economic Thought: A Mini-Symposium

Abstract

Michael Woodford's 2003 Interest and Prices has been regarded as the most important contribution to monetary economics since the publication of Don Patinkin's Money, Interest and Prices fifty years ago. Like Patinkin, Woodford sought inspiration in Knut Wicksell's 1898 Interest and Prices. But, while Patinkin built on Wicksell's incipient formulation of the real balance effect and stability analysis of the price level (see Boianovsky 1998), Woodford has elaborated on Wicksell's concept of a pure credit economy (called “cashless economy” in the 2003 version), a theme largely disregarded by Patinkin. This difference in perspective is in part related to the fact that Patinkin's concern was mainly monetary theory, whereas Woodford has focused on monetary policy instead. In early 2004 I invited a group of scholars to discuss Wood-ford's book from the point of view of the history of thought and methodology in a session at the History of Economics Society meetings, held in June of that year at Victoria University, Toronto. Michael Woodford was also invited to participate in the session and reply to the comments. The revised papers are published here as a mini-symposium.