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392 David Colander

16

Conversations with James

Tobin and Robert J. Shiller

on the “Yale Tradition”

in Macroeconomics

Conducted by David Colander

MIDDLEBURY COLLEGE

Every graduate school has its own distinctive history that makes it unique

in some way, but every graduate school is also part of the broader eco-

nomics profession and re¬‚ects the currents in the profession. The fol-

lowing dialogue focuses on the question: Is it useful to distinguish a

“Yale school of macroeconomics” from other schools of economics?

The idea for this dialogue came from Bill Barnett in a discussion with

Bob Shiller. Bill suggested to Bob some names of individuals who might

conduct the “dialogue” and I was selected from that list. I happily agreed

because, from my knowledge of the writings of the Yale faculty, I felt

that there was a uniformity of ideas with which I was sympathetic, and

which might deserve to be called a “Yale school””a view shared with

Bob Shiller. Exploring the issue further, I found that there was far less

agreement on whether the macroeconomics work that currently goes on

at Yale can be classi¬ed meaningfully as “the Yale school.” The objec-

tions to specifying a separate Yale school were the following: (1) The

term, Yale school, had been used in the 1960s to describe Jim Tobin™s

position in a debate with monetarists. Some felt it would be confusing to

use the Yale school classi¬cation to describe a broader set of works that

Reprinted from Macroeconomic Dynamics, 3, 1999, 116“143. Copyright © 1999

Cambridge University Press.

Conversations with James Tobin and Robert J. Shiller 393

are not connected to that earlier, more narrow, use. (2) Calling the work

in macroeconomics currently done at Yale a “school” distinguishes it

too much. The work that goes on in Yale is similar to the work that goes

on in any top graduate economics program. It is not so clear how the

work at Yale differs from, for example, MIT or Princeton. It would need

to be more distinct to warrant calling it a “school.” (3) There is a

diversity of approaches that are used at Yale, and it is not clear that they

actually ¬t together. For example, Chris Sims™s work follows from a time-

series statistics tradition with in¬‚uences from real-business-cycle and

calibration work; Shiller™s work follows from a Keynesian tradition. Fitting

them together requires a bit of a stretch. (4) The degree of continuity in

the Yale school over time is not as great as I had ¬rst imagined. There

was little linkage at Yale from Irving Fisher to Jim Tobin; thus the

historical continuity needed for specifying a Yale school does not exist.

These objections are elaborated in the dialogues below. After discussing

these issues with a number of Yale faculty, I decided that there probably

wasn™t a Yale school of economics, but that there was a Yale tradition.

We also decided to have a conversation with only two individuals”Jim

Tobin and Bob Shiller”because they are major ¬gures in maintaining

what I believe is a Yale tradition. The conversations were held separately,

although I asked many of the same questions to both, and focused much

of the conversation on the issue of whether it is useful to distinguish a

Yale school. Thus, the conversations discuss the work of other individuals

at Yale more than a dialogue with another focus would have, and do not

cover Tobin™s or Shiller™s current work as much as conversations with an

alternative focus would have. The results are, I believe, interesting. They

provide some useful insight into both the Yale tradition and current

thinking and debates in macro.

A Conversation with James Tobin

Fall 1997

Colander: You went to Harvard as an undergraduate.

Tobin: That™s right; I graduated in 1939. I didn™t leave Harvard

graduate school until two years after; it was 1941. I got the MA in one

year because I had taken so many graduate courses when I was still an

undergraduate.

Colander: At that point you were still working for your Ph.D., right?

Tobin: Yes. I was still taking more courses, more seminars, and so on.

In the spring of 1941, I had taken a course with Ed Mason on the