This lecture draws lessons for macroeconomics from an era of exceptional macroeconomic upheaval: the 1940s.
The 1940s began with lingering high unemployment rates from the Great Depression, but the subsequent buildup to and entry into World War II brought steady declines in unemployment rates and large movements of workers across occupations, industries, and geographical areas. At the end of the war, the unemployment rates in the U.S. and Great Britain rose by only a few percentage points, despite the dramatic decline in government spending and the significant sectoral shifts across industries. These outcomes belied the dire predictions of contemporary macroeconomists that the end of the war would bring soaring unemployment and a possible relapse into depression. Macroeconomic theory has progressed significantly since the simple Keynesian models used in the 1940s, but many modern macro models would make similarly pessimistic predictions. This lecture uses lessons from the 1940s to analyse what modern macro models may be missing.
Meet our speaker and chair
Valerie Ramey received her B.A. with a double major in Economics and Spanish from the University of Arizona, graduating summa cum laude. She went on to earn a Ph.D. in Economics from Stanford University. She is currently Professor of Economics at the University of California, San Diego and Research Associate of the National Bureau of Economic Research. She is a member of the American Academy of Arts and Sciences and a Fellow of the Econometric Society. She has served as co-editor of the American Economic Review, chair of the Economics Department at UCSD, and as a member of several National Science Foundation Advisory Panels and the Federal Economic Statistics Advisory Committee. She currently serves on the Panel of Economic Advisers for the Congressional Budget Office and on the NBER Business Cycle Dating Committee, and she is an associate editor of the Quarterly Journal of Economics and the Journal of Political Economy.
Tim Besley is School Professor of Economics and Political Science and W. Arthur Lewis Professor of Development Economics in the Department of Economics at LSE. He is also a member of the National Infrastructure Commission. He is a Fellow of the Econometric Society and British Academy and a Foreign Honorary Member of the American Economic Association and the American Academy of Arts and Sciences. His main research interests are in political economy and development.
More about this event
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This event is the 2025 Economica-Phillips Lecture.
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