chapter  8
13 Pages

The Turn to the Long-Run (1): How Soon is the Long-Run?

The turn to the long-run was the key conceptual shift in the macroeconometric transition from Keynesianism to Monetarism. Looking back over this account of the evolution of the incomeexpenditure models, it is easy to see the status of this concept, as measured by the frequency with which it appeared, increasing as the model developed. Thus, in chapters 3 and 4, which covered the establishment of the income-expenditure model and its early, and untroubled, growth, the concept of the long-run was not mentioned at all; in chapter 5, on radical reform, it made an appearance, although nothing of substance followed from it there; in chapter 6, under the guise of the 'ultimate effects', it began to appear often; while in chapter 7, the long-run was the recurring theme throughout.