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The origins, development, and fate of Clower’s ‘stock-flow’ general-equilibrium program

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  • Romain Plassard

Abstract

Before becoming the hallmark of macroeconomics à la Wynne Godley, the ‘stock-flow’ analysis was already developed in microeconomics and general equilibrium theory. Basically, the goal was to study the formation of economic plans and the determination of market prices when individuals were supposed to consume, produce, and hold commodities. It is acknowledged that Robert W. Clower was a central figure in this theoretical context. Yet, for both his contemporaries and for historians, his contributions remained essentially technical. No attention was paid to the theoretical project underlying the statics and dynamics analyses of his ‘stock-flow’ price theory. My paper aims to fill this gap. In light of his doctoral dissertation, I show that the elaboration of ‘stock-flow’ market models was part of a project aiming at offering sound microfoundations to a Keynesian business cycle model. I analyze the origins of this microfoundation program, trace its development, and discuss its fate.

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  • Romain Plassard, "undated". "The origins, development, and fate of Clower’s ‘stock-flow’ general-equilibrium program," Center for the History of Political Economy Working Paper Series 2016-16, Center for the History of Political Economy.
    • Handle: RePEc:hec:heccee:2016-16
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    1. Backhouse,Roger E. & Boianovsky,Mauro, 2014. "Transforming Modern Macroeconomics," Cambridge Books, Cambridge University Press, number 9781107435384, October.
    2. Plassard, Romain, 2017. "Disequilibrium as the origin, originality, and challenges of Clower's microfoundations of monetary theory," MPRA Paper 78917, University Library of Munich, Germany.
    3. Josef Hadar, 1965. "A Note on Stock-Flow Models of Consumer Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 79(2), pages 304-309.
    4. William J. Baumol, 1962. "Stocks, Flows and Monetary Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 76(1), pages 46-56.
    5. Plassard, Romain, 2015. "Clower's about-face regarding the 'Keynesian Revolution'," MPRA Paper 69233, University Library of Munich, Germany.
    6. J. de V. Graaf, 1950. "Income Effects and the Theory of the Firm," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 18(2), pages 79-86.
    7. Romain Plassard, 2017. "Clower's volte-face regarding the Keynesian Revolution," Post-Print hal-01813106, HAL.
    8. Cliff L. Lloyd, 1960. "The Equivalence of the Liquidity Preference and Loanable Funds Theories and the New Stock-Flow Analysis," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 27(3), pages 206-209.
    9. Don Patinkin, 1958. "Liquidity Preference and Loanable Funds : Stock and Flow Analysis," Economica, London School of Economics and Political Science, vol. 25(100), pages 300-318, November.
    10. Sexton, Robert L. & Clower, Robert W. & Graves, Philip E. & Lee, Dwight R., 1992. "Incorporating inventories into supply and demand analysis," MPRA Paper 19905, University Library of Munich, Germany.
    11. Pedro Garcia Duarte & Gilberto Tadeu Lima, 2012. "Microfoundations Reconsidered," Books, Edward Elgar Publishing, number 14869.
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    1. Plassard, Romain, 2015. "Clower's about-face regarding the 'Keynesian Revolution'," MPRA Paper 69233, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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