RIP Anna Schwartz

      I should say something about her passing. Obviously she and her husband, Milton Friedman wrote the definitive work on monetary history. Sumner naturally writes about it today and clearly thinks more people should use their approach:

     "Anna Schwartz co-authored with Milton Friedman The Monetary History of the US: 1867-1960. I bought the book when I was a teenager, and have read it many times (although I don’t recall ever finishing it.) It’s almost certainly the most influential book on macro history ever written, and I view it as a model of how to do research in economic history. The footnotes alone are better than most books. That’s not to say there aren’t any flaws—I studied the role of gold in the Great Depression partly because I felt they paid too little attention to that issue."

      "You’d think that younger researchers would try to emulate Friedman and Schwartz, but I don’t see many doing that. Instead, much more technically sophisticated studies get done, but for some odd reason people don’t find them anywhere near as persuasive as the Monetary History. I recall Robert Lucas telling our class that the Monetary History was what convinced him that monetary shocks were the primary cause of business cycles. I’m pretty sure Bernanke feels the same way."

       http://www.themoneyillusion.com/?p=15078

        This touches on a recurring debate on the Macro blogs of sophisticated studies and models vs. more "sylized" approaches, etc. Interestingly, Keynes in his own way certainly didn't have the "sophisticated" approach either.

        And the IS-LM model that Hicks wrote in an attempt to bridge the divide between the old Classical School and the Keynesians has now of course been seen as way too "ad-hoc" and lacking in elegance.

        What I can't help but reflect on at the same time is the fact that both Schwartz and her husband really benefited from the good fortune of a long life, with both living till their late 90s.

         Their magnum opus-the Monetary History of the United States-was completed in the early 60s. Freidman had 40 more good years of writing after this. Keynes in contrast was not lucky. He had only 10 more years after the General Theory and during that time he was debilitated by illness. What time he did have was devoted to helping the British government in WWII and creating the Bretton Woods system.

         Who knows where he might have gone otherwise? After GT he was never to write another book. Friedman by contrast wrote a great deal over the next 40 years. It's for this reason that you get all the Post Keynesians who complain that the IS-LM model of Hicks, popularized by Paul Samuelson-this was the model of the Keynesian age, the one used by the Kennedy and Johnson Administrations-as
"bastardized Keynesianism."

        This whole discussion would have been avoided if only fortune had smiled on Keynes as it did to both Freidman and Schwartz.

         P.S. The argument over bastardized Keynesianism may not be ended by this fact, but it's still interesting that Keynes did not repudiate Hicks, far from it. He didn't see it has perfect for certain but on pragmatic grounds didn't resist it-again he was not really well enough to write any more on his own.