John Von Neumann and Modern Economics

Description

Centering around von Neumann's 1937 paper on the model of an expanding economy, this collection analyzes his versatility as a mathematician and his contribution to economics. The contributors include Kenneth Arrow, Lionello Punzo, Paul Samuelson, A. Brody, John Harsanyi, Sidney Afriat, Gerald Thompson, and Nicholas Kaldor. Few would dispute John von Neumann’s, importance in the history of economic analysis in the twentieth century. This volume, largely centred round his 1937 paper on the model of an expanding economy, contends that von Neumann changed the very way in which economic analysis is done. His techniques have now become standard in modern economics, and his growth model led to the revival of classical political economy. The contributors, who are drawn from both sides of the Atlantic and include two Nobel Laureates, assess the conceptual significance of von Neumann’s work and demonstrate the extent of his versatility as a mathematician and thinker. Their essays range over the central questions addressed by his work, and include an exploration of its relation to game theory, a discussion of his growth model in historical perspective, and a retrospective analysis of his achievements. In particular, they show how his techniques avoid the methodological individualism of the Austrian School. This volume, introduced by a Foreword from the late Lord Kaldor, will provide professional economists and graduate students alike with valuable insights into the work and significance of one of the century’s major economists. Contents About the Editors xvii List of Contributors xix 1. Introduction Mohammed H. I. Dore, Sukhamoy Chakravarty, and Richard M. Goodwin 1 PART ONE: VON NEUMANN’S GROWTH MODEL HISTORICAL PERSPECTIVE 2. Von Neumann and the Existence Theorem for General Equilibrium Kenneth J. Arrow 15 3. Von Neumann and Karl Menger’s Mathematical Colloquium Lionello F. Punzo 29 PART TWO: VON NEUMANN’S GROWTH MODEL: THE CENTRAL QUESTIONS 4. John von Neumann’s Model of an Expanding Economy: an Essay in Interpretation Sukhamoy Chakravarty 69 5. The Legacy of John von Neumann Mohammed H. I. Dore 82 6. A Revisionist View of von Neumann’s Growth Model Paul A. Samuelson 100 PART THREE: VON NEUMANN’S GROWTH MODEL AND DYNAMICS 7. Swinging Along the Autostrada: Cyclical Fluctuations Along the von Neumann Ray Richard M. Goodwin 125 8. Economics and Thermodynamics Andrew Brody 141 PART FOUR: VON NEUMANN’S GROWTH MODEL AND GAME THEORY 9. Game Theoretic Growth: A Numerical Illustration Mohammed H. I. Dore 151 10. An Equilibrium-point Interpretation of the von Neumann—Morgenstern Solution and a Proposed Alternative Definition John C. Harsanyi 162 PART FIVE: VON NEUMANN’S GROWTH MODEL: RETROSPECTIVE AND REFORMULATION 11. Von Neumann’s Economic Model Sidney N. Afriat 193 12. John yon Neumann’s Contributions to Mathematical Programming Economics Gerald L. Thompson 221 Epilogue Mohammed H. I. Dore 238 Index 240