CONVERSATIONS WITH JAMES
TOBIN AND ROBERT SHILLER
ON THE “YALE TRADITION”
IN MACROECONOMICS
Authors: Colander Conducted by David 
Published: July 2002

Every graduate school has its own distinctive history
that makes it unique in some way, but every graduate school is
also part of the broader economics profession and reflects the
currents in the profession. The following dialogue focuses on
the question: Is it useful to distinguish a “Yale school of
macroeconomics” from other schools of
economics? The idea for
this dialogue came from William Barnett in a discussion with Bob
Shiller. Bill suggested to Bob some names of individuals who
might conduct the “dialogue”
and I was selected from that list.
I happily agreed because, from my knowledge of the writings of
the Yale faculty, I felt that there was a uniformity of ideas with
which I was sympathetic, and which might deserve to be called a
“Yale School”—a
view shared with Bob Shiller.

Exploring the issue further, I found that there was far
less agreement on whether the macroeconomics work that currently goes on
at Yale can be classified meaningfully
as “the Yale school.” The
objections to specifying a separate Yale school were the
following: (1) The term, Yale school,
had been used in the 1960's
to describe Jim Tobin's position in a
debate with monetarists. Some felt it would be
confusing to use the Yale school
classification to describe a broader set of works that are not
connected to that earlier, more narrow, use. (2) Calling the
work in macroeconomics currently done at
Yale a “school” distinguishes it
too much. The work that goes on in Yale is similar to the work
that goes on in any top graduate economics program. It is not so
clear how the work at Yale differs from,
for example, MIT or Princeton. It
would need to be more distinct to warrant
calling it a “school.”
(3) There is a diversity of approaches that are used at Yale,
and it is not clear that they actually fit together. For
example, Chris Sims's work follows from a time-series statistics
tradition with influences from real-business-cycle and calibration
work; Shiller's work follows from a Keynesian
tradition. Fitting them together requires a bit of a stretch.
(4) The degree of continuity in the Yale school over time is not
as great as I had first imagined. There was little linkage at
Yale from Irving Fisher to Jim Tobin; thus the historical
continuity needed for specifying a Yale school does not exist.
These objections are elaborated
in the dialogues below. After discussing
these issues with a number of Yale
faculty, I decided that there probably wasn't a Yale school of
economics, but that there was a Yale tradition. We also decided
to have a conversation with only two individuals—Jim Tobin and
Bob Shiller—because they are major figures in maintaining what I
believe is a Yale tradition. The conversations were held
separately, although I asked many of the same questions to both,
and focused much of the conversation on the issue of whether it
is useful to distinguish a Yale school. Thus, the conversations
discuss the work of other individuals at Yale more than a
dialogue with another focus would have, and do not cover Tobin's
or Shiller's current work as much as conversations with an
alternative focus would have. The results are, I believe,
interesting. They provide some useful insight into both the Yale
tradition and current thinking and debates in macro.