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Friday, November 10, 2006


William A. Barnett

If you receive Bloomberg radio where you are, then you might want to tune in to hear Bloomberg on the Economy next Monday, Jan 15. I'll be interviewed about the book (Samuelson and Barnett, Inside the Economist's Mind) for a half hour at 2 - 2:30 pm Eastern Time (US). The Host is Thomas Keene, who has already put the book on his Amazon list of the eighteen "Book Reviews: Must Reads."


WB: "If you receive Bloomberg radio where you are, then you might want to tune in to hear Bloomberg on the Economy next Monday, Jan 15. "

As much as I would like to, sir, alas that shall be practicably impossible in the boonies of France.

William A. Barnett

Lafayette, there is an easy solution. The podcasts of the Bloomberg on the Economy programs are online at Bloomberg.com. I assume that the interview will show up there sometime late next week.


WB: "I assume that the interview will show up there sometime late next week."

Thanx, I shall try to listen in.

William A. Barnett

Bloomberg radio broadcast:

There has been a change (for the better). Paul Samuelson has agreed to join me in the broadcast, which now will be for a full hour; but it has been moved from next Monday to next Tuesday, Jan 16. It will be from 2 pm to 3 pm EST in the US.

We'll split the time 50:50, so he'll talk for a half hour, and I'll talk for a half hour. It will take up the entire hour allocated to the program, "Bloomberg on the Economy," and will be about our recently-published book, "Inside the Economist's Mind." The program will be rerun on some other afternoons and evenings, and the podcast will be permanently online at Bloomberg's web site. It will be treated as a major Bloomberg event.

If you miss it, but would like to hear it, you could download the podcast a day or two later from the Bloomberg site at:


William A. Barnett

"I loved this book, and read it cover to cover in a day." [Stephen Kinsella]

I very much liked the long review of ITEM that just appeared on the blog, stephenkinsella.net, at the University of Limerick in Ireland.

Regarding this week's one hour program on Bloomberg radio, the podcast of the segment with Paul Samuelson is online, as is the segment with me. Each segment lasts only for about 15 minutes, since the podcasts remove the advertisements, news and weather breaks, and pauses.

Just received a request for a telephone interview from Le Monde, so maybe more soon. Meanwhile I've learned that there will be a review of the book in the Financial Times of London this Saturday. I haven't seen it.

William A. Barnett

"Meanwhile I've learned that there will be a review of the book in the Financial Times of London this Saturday."

Indeed a review did appear this morning in the FT. I rather wish that the reporter had spent more time digging the "smoking guns" out of the book, but all publicity is welcome. Here is the interesting part of today's article in the FT:

"J.K. Galbraith joked that 'the only function of economic forecasting is to make astrology look respectable'. Just as economics is half way between science and guesswork, so too Inside the Economist's Mind blends academic analysis with biographical informality.

It comprises interviews with 16 economists, half of them Nobel Prize winners, conducted by fellow economists. The emphasis is on macroeconomic theorists such as Robert Lucas and Milton Friedman, though also numbered among the interviewees are central bankers including Paul Volcker, chairman of the Federal Reserve under the Carter and Reagan administrations, and Stanley Fischer, governor of the Bank of Israel.

The aim is to see how their lives and work have intersected. . . . the book's value for the layman is to humanise a branch of thought that is abstruse yet full of practical consequence for everyday life."

William A. Barnett


Can anyone on this blog read Portuguese? If so, I'd very much appreciate it if you could look at today's edition of the Brazilian newspaper, Valor Economico.

The leading financial newspaper in Brazil is Valor Economico (which means "Economic Value" in English). A cover story about the book just appeared today (February 9, 2007) in that newspaper, and I have put the pdf online. It includes original artwork produced by the newspaper and photographs acquired by the newspaper. The article includes a cover story by the newspaper's editor and commentaries by four Brazilian economists. The color photographs alone are worth seeing, even without availability of the translation.

I need to know whether the review that appears there is favorable or unfavorable to the book. I cannot read Portuguese. Since it is a cover story, I assume mostly it is favorable, but it is so long that I cannot be sure whether it might contain unfavorable criticism that should concern me.

Any assistance would be much appreciated.

William A. Barnett

I've now acquired a complete translation into English of the long review of ITEM in the Brazilian newspaper, Valor Economico. The complete translation is online at:


I suggest that you look at it. It is fascinating. In addition to the comments on the book by the editor and five commentators, the article contains South American perspectives on many important matters, such as the recent shifts to the left in South American politics, the reasons for Brazilian disillusionment about flexible exchange rates, discussion of the effects on debtor countries of Volcker's high interest rates, among many other observations and views that are not often heard within the United States. There also are some surprising personal insights into the private family lives of some of MIT's most famous economists.

The translator was Professor Marcelle Chauvet at the University of California at Riverside. She is Brazilian, so this translation can be considered accurate. I am impressed by the investment of Valor in this review. Too bad that there is no English edition of Valor. If there were, and if this review is representative of coverage in Valor, I'd subscribe myself!


Thanks, WB. I loved this bit from the very beginning of the article:

"How many economists does it take to change a light bulb?

There are three possible answers:
(a) Two, one to change it and the other to hold an imaginary ladder.
(b) Eight, one to change it and seven to guarantee that everything else remains constant.
(c) None, they will all be waiting for an invisible hand to do it."


WB, I have this anecdote regarding Leontief:

I had just graduated with a Masters in Economics and was working for IBM. My manager at the time was interested in forecasting the cost of silicon wafers employed in the production of semiconductor chips, the heartbeat of a computer.

I was intrigued by Leontief work in Input-Output economics and convinced my manager that I should attended his seminar. I duly purchased his book on sale and even asked the distinguished economist to autograph it. He seemed, to me on that day, a highly agreeable person, very friendly and even joking.

During his exposition I thought it opportune to ask him personally to respond to a major criticism of his I/O mathematical model. It is, or was, the assumption that to invert the I/O matrices, one assumes that the I/O ratios employed remain constant over time. Some people felt that advances of processes and technologies could alter the ratio and, thereby, the forecasts that the model would provide.

Leontief exploded. He became red faced and treated the question as a vile attack on one of the key structural supports of his I/O model – which it was. Anyway, his manner of responding did more harm than my question.

Had he known how to answer in a more academic manner, no one would have been the wiser. But, later, at a coffee break, some fellow attendants commented (with a wink) that I had “obviously asked the wrong question”.

Which was true enough. Still, I never did understand why his I/O theories did not make more headway in the mainstream of economic thinking. And, I am unwilling to believe it was due to criticism regarding the matrix I/O-ratios.

I am still fascinated by technique.

William A. Barnett

"I am unwilling to believe it was due to criticism regarding the matrix I/O-ratios"

Indeed, you are right that there is another reason. As Morishima proved in his book on Marxist economics, fixed coefficient technology can be used to produce the labor theory of value and thereby Marxian economics. This was also shown in Lancaster's old book on mathematical economics. It is hardly surprising that the neoclassical mainstream never liked that implication of I/O. Of course Adam Smith also believed in the now-obsolete labor theory value, so Marx was hardly the only "economist" to make that error.

On another subject, I was interviewed on the phone by a reporter from Le Monde recently. Clearly something is in the works there, and I will probably be informed in advance. But if you nevertheless see it before I do, please inform me.


WB: "I was interviewed on the phone by a reporter from Le Monde recently."

Le Monde, you should know, is a newspaper typically on the French Left. A word to the wise is often sufficient ...


WB: "It is hardly surprising that the neoclassical mainstream never liked that implication of I/O."

Do you think that such was sufficient to stop I/O analysis from obtaining more usage as an economic forecasting technique?

A shame really, such a silly reason. Because, let us presume that I/O ratios do evolve as I suspect that they do. Then an attempt could be made to predict them, then employ them in the modelling to see if the outcome accurately predicts reality (time-wise).

I have no way of knowing if, even Leontief, tried to do that. I moved on to "other things" and his name became more or less forgotten.

William A. Barnett

At one time I/O was part of every "math econ" course, but now is less often viewed as part of mainstream economics. I/O has become a specialized area used by some.

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