ABSTRACT OF PAPER
Title: Oscar Lange and the origins of Walrasian macroeconomics
Author: Goulven Rubin
Oscar Lange was instrumental in imposing the idea that the foundations of Keynes’ theory could be found in the Walrasian model. He stressed the connection between Keynes and Walras in a 1938 paper. Then, in his 1942 paper on Say’s law and his 1944 Cowles monography, he attempted to derive the results of Keynes’ chapter 19 using a general equilibrium framework with money. A striking evidence of Lange’s influence is Don Patinkin presentation of Keynes’ General Theory as the “first practical application of the Walrasian theory of general equilibrium” (Palgrave dictionary of economics, 1987). Beyond the issue of Keynes’s interpretation what is at stake here is the history of Walrasian macroeconomics. My communication will offer an assessment of Lange’s 1942 and 1944 essays. I will address various questions. Lange recognized explicitly that he did not start from Walras but drew heavily on Hicks (1939) and Samuelson (1941). This raises twin issues. First, what is the nature of his debt to both of them? Second, what kind of Walrasian economist was he? The nature and the internal consistency of Lange’s 1944 contribution will be analyzed. I will show that the homogeneity postulate discarded in the 1942 paper was reintroduced in 1944. Either Lange was inconsistent or he implicitly assumed that all money was inside money. Finally, I will discuss the influence of Lange’s work on Patinkin and Clower. Clower 1965 paper in particular can be read as an answer to Lange’s main thesis.
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