Alas, golden ages do end. By the early 1990s, the thrill of increasing-returns economics was fading. It wasn't just the inexorable working of the law of diminishing disciples. There was a deeper problem: The new ideas were immensely liberating, but at some point you can get too liberated. In international trade, people started to joke that a smart graduate student could come up with a model to justify any policy; similar sentiments were felt in many fields. In short, we all got tired of clever analyses of what might happen; and throughout economics there was a shift in focus away from theorizing, toward data collection and careful statistical analysis.
But it was a golden age--a time of innovation and intellectual excitement, when all of economics seemed up for reinvention--and Kelvin Lancaster was one of those who made it so. Let us honor his memory.
TODAY IN SLATE
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