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Structural Change and Economic Dynamics 17 (2006) 379–381 Introduction Richard Murphey Goodwin (1913–1996): His legacy continued Richard Goodwin was an important inspiration when this journal (Structural Change and Economic Dynamics) was set up in 1990. He had, at that point, retired from the University of Cambridge where he had been teaching since 1950 and taken up a professorship at the University of Siena. During the last two decades of his life, Richard Goodwin continued to do research both in Italy and in Cambridge, and he was a focal point for a sizable group of young economists who had taken up his ambitious research program to advance the study of macroeconomic and structural dynamics. This was a period in which exciting new techniques of non-linear dynamics were taken up both in neoclassical and in heterodox economics and Goodwin had been a pioneer in the use of advanced tools in dynamic economic modeling since the early 1950s. With his continued curiosity to explore advanced mathematical modeling techniques, his relaxed and generous nature made younger colleagues feel they can interact with him without any artificial distance and benefit from his lifelong interest in fundamental issues of macroeconomic dynamics and structural change. Goodwin was in a very fertile phase of pursuing and synthesizing a range of contributions to the theory of economic fluctuations, distributional dynamics and economic growth, structural and Schumpeterian dynamics together with a strong interest in bringing together decomposition and computational techniques for structural analysis with non-linear modeling of macroeconomic dynamics. His research program was influenced by economists as diverse as Marx and Schumpeter, Keynes, Hicks and Harrod, Leontief and Sraffa, as well as physicists and mathematicians such as Poincare, Corbeiller, Smale, Haken and Roessler. It was persistently shaped by Goodwin into a consistent and rich picture of the dynamics of capitalist economies. His ambitious oeuvre will remain a motivating point of departure for current and future generations of researchers. The contributions in this issue and in a companion volume (see Flaschel and Landesmann, in preparation) testify to the continued influence of Goodwin’s work. The papers have first been presented at a special Goodwin workshop which took place in Bremen in autumn 2005 in the context of the Annual EAEPE Conference. The first paper by Lionello Punzo, who has been a close collaborator of Goodwin’s (see particularly Goodwin and Punzo, 1987) takes us on a tour through Goodwin’s lifelong research program. He shows the various phases in which Goodwin attempted to shape tools for the analysis of fluctuating capitalist economies, take account of irregularity in such fluctuations and develop a model which combines structural and macroeconomic dynamics. Massimo di Matteo, Francesco 0954-349X/$ – see front matter © 2006 Published by Elsevier B.V. doi:10.1016/j.strueco.2006.10.001

Richard Murphey Goodwin (1913–1996): His legacy continued

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Structural Change and Economic Dynamics17 (2006) 379–381

Introduction

Richard Murphey Goodwin (1913–1996):His legacy continued

Richard Goodwin was an important inspiration when this journal (Structural Change andEconomic Dynamics) was set up in 1990. He had, at that point, retired from the University ofCambridge where he had been teaching since 1950 and taken up a professorship at the Universityof Siena. During the last two decades of his life, Richard Goodwin continued to do research bothin Italy and in Cambridge, and he was a focal point for a sizable group of young economistswho had taken up his ambitious research program to advance the study of macroeconomic andstructural dynamics.

This was a period in which exciting new techniques of non-linear dynamics were taken upboth in neoclassical and in heterodox economics and Goodwin had been a pioneer in the use ofadvanced tools in dynamic economic modeling since the early 1950s. With his continued curiosityto explore advanced mathematical modeling techniques, his relaxed and generous nature madeyounger colleagues feel they can interact with him without any artificial distance and benefit fromhis lifelong interest in fundamental issues of macroeconomic dynamics and structural change.Goodwin was in a very fertile phase of pursuing and synthesizing a range of contributions tothe theory of economic fluctuations, distributional dynamics and economic growth, structuraland Schumpeterian dynamics together with a strong interest in bringing together decompositionand computational techniques for structural analysis with non-linear modeling of macroeconomicdynamics. His research program was influenced by economists as diverse as Marx and Schumpeter,Keynes, Hicks and Harrod, Leontief and Sraffa, as well as physicists and mathematicians suchas Poincare, Corbeiller, Smale, Haken and Roessler. It was persistently shaped by Goodwin intoa consistent and rich picture of the dynamics of capitalist economies. His ambitious oeuvre willremain a motivating point of departure for current and future generations of researchers.

The contributions in this issue and in a companion volume (see Flaschel and Landesmann,in preparation) testify to the continued influence of Goodwin’s work. The papers have first beenpresented at a special Goodwin workshop which took place in Bremen in autumn 2005 in thecontext of the Annual EAEPE Conference.

The first paper by Lionello Punzo, who has been a close collaborator of Goodwin’s (seeparticularly Goodwin and Punzo, 1987) takes us on a tour through Goodwin’s lifelong researchprogram. He shows the various phases in which Goodwin attempted to shape tools for the analysisof fluctuating capitalist economies, take account of irregularity in such fluctuations and develop amodel which combines structural and macroeconomic dynamics. Massimo di Matteo, Francesco

0954-349X/$ – see front matter © 2006 Published by Elsevier B.V.doi:10.1016/j.strueco.2006.10.001

380 Introduction / Structural Change and Economic Dynamics 17 (2006) 379–381

Filippi and Serena Sordi undertook the important task of sifting through and exploring the recentlyestablished Goodwin Archive at the University of Siena, a catalogue of which will soon beavailable at the Web site organized and maintained by the Societa Italiana degli Economisti. Intheir contribution they describe the structure and contents of the Archive, discuss a number ofinteresting pieces from different periods of Goodwin’s life and produce and comment on a–sofar–unpublished hand-written manuscript by Goodwin on ‘The confessions of an unrepentantmodel builder’.

Alessandro Vercelli and Serena Sordi pick up Goodwin’s early contributions (see e.g.Goodwin, 1946, 1947, 1951) of a non-linear multiplier-accelerator model with special emphasison the discrete time versions. They reconstruct very persuasively the path pursued by Goodwin toallow for the characteristics of a monetary economy, for production lags, for regularity and irregu-larity and stability and instability, all issues which occupied Goodwin throughout his life. Vercelliand Sordi add their own mathematical formulation by amending and generalizing Goodwin’smodel.

Asada’s is the first of three papers in this issue which take as a starting point Goodwin’spioneering 1967 paper (see Goodwin, 1967, 1982) of modeling distributional conflict and fluc-tuating accumulation in a capitalist economy in the context of a two-dimensional Lotka-Volterrasystem. In Goodwin’s original model version, Keynes’ effective demand and monetary issueswere ignored but have been introduced by later authors (see e.g. Asada et al., 2003; Chiarella etal., 2005). Toichiro Asada further develops this line by investigating the effects of monetary andfiscal stabilization in a Keynes-Goodwin growth cycle model which allows for debt financing ofprivate investment and of the government. He shows that sufficiently active monetary and fiscalpolicy can stabilize an intrinsically unstable economy. Reiner Franke, Peter Flaschel and ChristianProano develop a Keynes-Goodwin simulation model which has as components wage and pricePhillips curves enriched by the influence of the inflation climate and the wage share, a CentralBank (Taylor) rule for nominal interest rate determination, endogenous determination of labourproductivity growth, and dynamic adjustments of the inflation climate. They explore the impact ofstructural shifts in the bargaining positions of workers in wage-led and profit-led regimes, discussstabilizing and de-stabilizing effects of parameter changes and check on the empirical plausibilityof their model structure by confronting model-generated time series with their empirical coun-terparts. The paper by Roberto Veneziani and Simon Mohun is a methodological discussion ofwhether ‘structurally unstable’ models (such as Goodwin’s original predator-prey model) shouldbe rejected a priori as a heuristic device. Apart from inherent ambiguities in the definition ofstructural instability and in proving structural instability in particular instances, they argue thatstructural instability is insufficient to rule out a model a priori. Instead they insist on modelsbe evaluated with regard to empirical features of the phenomenon investigated and they refer toGoodwin’s rather sophisticated discussion of structural instability (and use of different modelvariants) when exploring the interaction between macro-dynamics and structural shifts.

Codrina Rada and Lance Taylor investigate different approaches to growth analysis. Apartfrom proposing restrictions on growth relations which can be derived from national income andproduct accounts, they suggest to focus on productivity equations which allow the formulation ofsupply-based vs. demand based growth models. The relationships between distributional shares,effective demand and feed-back effects on productivity growth are explored and implications forGoodwin-type cycles are discussed. Michael Landesmann and Robert Stehrer’s paper explorethemes prevalent in Goodwin’s later work: there Goodwin attempted to bring together Schum-peterian structural change based on the effects of innovation and diffusion of new technologywith Keynes’ concern that effective demand problems prevent economies to operate at their full

Introduction / Structural Change and Economic Dynamics 17 (2006) 379–381 381

potential. These issues are explored in the context of internationally interdependent economiesand catching-up processes by groups of less advanced with more advanced economies.

We hope that the collection of papers in this issue and in its companion volume will encouragecontinued research following on from Richard Goodwin’s rich intellectual legacy.

References

Asada, T., Chiarella, C., Flaschel, P., Franke, R., 2003. Open Economy Macrodynamics: An Integrated DisequilibriumApproach. Springer Verlag, Berlin.

Chiarella, C., Flaschel, P., Franke, R., 2005. Foundations of a Disequilibrium Theory of the Business Cycle. QualitativeAnalysis and Quantitative Assessment. Cambridge University Press, Cambridge.

Flaschel, P., Landesmann, M., in preparation. Effective Demand, Income Distribution and Growth. Research in Memoryof the Work of Richard M. Goodwin.

Goodwin, R.M., 1946. Innovations and the irregularity of economic cycles. Review of Economics and Statistics 28,95–104.

Goodwin, R.M., 1947. Dynamical coupling with especial reference to markets having production lags. Econometrica 15,181–204.

Goodwin, R.M., 1951. The nonlinear accelerator and the persistence of business cycles. Econometrica 19, 1–17.Goodwin, R.M., 1967. A growth cycle. In: Feinstein, C.H. (Ed.), Socialism, Capitalism and Economic Growth. Cambridge

University Press, Cambridge, Also in Goodwin (1982).Goodwin, R.M., 1982. Essays in Economic Dynamics. Macmillan, London.Goodwin, R.M., Punzo, L.F., 1987. The Dynamics of a Capitalist Economy. A Multisectoral Approach. Polity Press and

Westview, Oxford and Boulder.

Peter FlaschelDepartment of Economics, Bielefeld University,

P.O. Box 10014, 33501 Bielefeld, GermanyE-mail address: [email protected]

Michael LandesmannThe Vienna Institute for International Economic Studies (wiiw),

Oppolzergasse 6, A-1010 Vienna, AustriaE-mail address: [email protected]