A book has recently
been published by Professors Wynne Godley and
Marc Lavoie with the title Monetary Economics.
An Integrated Approach to Credit, Money, Income,
Production, and Wealth, that is founded
upon the use of MODLER™ and both puts forward
a particular Post-Keynesian perspective on economic
theory and demonstrates the process of building
integrated economic models of economies. The
exposition starts with a small, purely pedagogic
model, which is then progressively elaborated
in the later chapters. Throughout the book the
models are explained and demonstrated, using
MODLER™ graphs. Databases, macro files and other
aids are available that permit a reader to work
through both the creation and simulation solution
of each of the models. Separately, a workbook
is being progressively developed that is designed to more specifically
describe the way in which MODLER™ can be used
effectively to create and solve models of this
type. This workbook can be downloaded from the
Learning Tools page of this website.
Earlier, Professor Godley
taught an innovative senior level undergraduate
macroeconomics seminar course at Barnard College
of Columbia University that utilized the MODLER™
software and was based upon early draft chapters
of the book. The seminar convened in a computer
lab setting that provided each participant with
a networked personal computer. Students also
had copies of the software on personal notebook
or desktop computers.
The course introduced
the students to working examples of economic
models. These particular models take the form
of theoretical macroeconomic models, formed
to express particular statements about macroeconomic
phenomena. During the 12 week course, Professor
Godley introduced the series of models, increasing
in their complexity, that began with a simple
5 equation model that was progressively elaborated
so as to finally provide an open model of an
economy incorporating the usual range of sectoral
characteristics for a national economy. Simulations
of the models demonstrate the effect of particular
assumptions about the form of money, consumption,
investment, other demand and supply functions,
and national accounting and other relationships,
providing the student with a much better sense
of how an economy might operate, given a particular
set of inherent characteristics. During the
course, Professor Godley demonstrated that certain
of the models presented in popular economics
textbooks actually exhibit behavioral characteristics
sharply at variance with reality, yet that equally
simple working models can be developed that
do not conflict with what is observed in the
real world.
In future years, macroeconomic
courses worldwide may take the form of this
course, which allows the participants to see
directly how theoretical statements about an
economy play out in a simulation setting, instead
of requiring student to learn by rote. MODLER™
has been and is used as an economics and/or
econometrics teaching tool in other universities
in the Americas and Europe, including universities
in Germany, Spain, and the UK.
