Bernard Joseph Francis Lonergan SJ CC (17 December 1904 – 26 November 1984) was a Canadian Jesuit priest, philosopher , and theologian , regarded by many as one of the most important thinkers of the 20th century.
111-964: Lonergan's works include Insight: A Study of Human Understanding (1957) and Method in Theology (1972), as well as two studies of Thomas Aquinas, several theological textbooks, and numerous essays, including two posthumously published essays on macroeconomics . The projected 25-volume Collected Works with the University of Toronto Press is now complete. Lonergan held appointments at the Pontifical Gregorian University , Rome; Regis College, Toronto , as distinguished visiting professor at Boston College , and as Stillman Professor of Divinity at Harvard University . By his own account, Lonergan set out to do for human thought in our time what Thomas Aquinas had done for his own time. Aquinas had successfully applied Aristotelian thought to
222-693: A fixed exchange rate regime, aligning their currency with one or more foreign currencies, typically the US dollar or the euro . Conventional monetary policy can be ineffective in situations such as a liquidity trap . When nominal interest rates are near zero, central banks cannot loosen monetary policy through conventional means. In that situation, they may use unconventional monetary policy such as quantitative easing to help stabilize output. Quantity easing can be implemented by buying not only government bonds, but also other assets such as corporate bonds, stocks, and other securities. This allows lower interest rates for
333-635: A fixed exchange rate system or even a currency union like the Economic and Monetary Union of the European Union , drawing on the research literature on optimum currency areas . Macroeconomics as a separate field of research and study is generally recognized to start with the publication of John Maynard Keynes ' The General Theory of Employment, Interest, and Money in 1936. The terms "macrodynamics" and "macroanalysis" were introduced by Ragnar Frisch in 1933, and Lawrence Klein in 1946 used
444-436: A 2% inflation rate just because that has been the average the past few years; they will look at current monetary policy and economic conditions to make an informed forecast. In the new classical models with rational expectations, monetary policy only had a limited impact. Lucas also made an influential critique of Keynesian empirical models. He argued that forecasting models based on empirical relationships would keep producing
555-468: A 3% increase in output would lead to a 1% decrease in unemployment. The structural or natural rate of unemployment is the level of unemployment that will occur in a medium-run equilibrium, i.e. a situation with a cyclical unemployment rate of zero. There may be several reasons why there is some positive unemployment level even in a cyclically neutral situation, which all have their foundation in some kind of market failure : A general price increase across
666-412: A Thomistic vision of Being as the goal of the dynamic openness of the human spirit. In 1972, Lonergan published Method in Theology , which distinguishes eight groups of operations ("functional specialties") in theology. Indeed, method is a phenomenon which applies across the board in all disciplines and realms of consciousness. Through his work on method, Lonergan aimed, among other things, to establish
777-804: A basis for making economic forecasting . Well-known specific theoretical models include short-term models like the Keynesian cross , the IS–LM model and the Mundell–Fleming model , medium-term models like the AD–AS model , building upon a Phillips curve , and long-term growth models like the Solow–Swan model, the Ramsey–Cass–Koopmans model and Peter Diamond 's overlapping generations model . Quantitative models include early large-scale macroeconometric model ,
888-462: A book by J. Patout Burns in 1972, and both the revised and the original version of his study were subsequently published in his Collected Works as Grace and Freedom: Operative Grace in the thought of St. Thomas Aquinas . After his return from Rome , Lonergan wrote a series of four articles for Theological Studies on the inner word in Thomas Aquinas which became highly influential in
999-613: A broader class of assets beyond government bonds. A similar strategy is to lower long-term interest rates by buying long-term bonds and selling short-term bonds to create a flat yield curve , known in the US as Operation Twist . Fiscal policy is the use of government's revenue ( taxes ) and expenditure as instruments to influence the economy. For example, if the economy is producing less than potential output , government spending can be used to employ idle resources and boost output, or taxes could be lowered to boost private consumption which has
1110-571: A core part of contemporary macroeconomics. The 2007–2008 financial crisis , which led to the Great Recession , led to major reassessment of macroeconomics, which as a field generally had neglected the potential role of financial institutions in the economy. After the crisis, macroeconomic researchers have turned their attention in several new directions: Research in the economics of the determinants behind long-run economic growth has followed its own course. The Harrod-Domar model from
1221-536: A decade's apprenticeship to the thought of Thomas Aquinas. He produced two major exegetical studies of Thomas Aquinas: Grace and Freedom, and Verbum: Word and Idea in Aquinas . The University of Toronto Press has published Lonergan's work in a 25-volume series, Collected Works of Bernard Lonergan . Lonergan's doctoral dissertation was an exploration of the theory of operative grace in the thought of Thomas Aquinas . His director, Charles Boyer, S.J., pointed him to
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#17327718377131332-486: A federated college of the University of Toronto. This arrangement was renewed for a further ten years in 2004. In August 2008, Regis College agreed to move to Christie House, on the corner of Wellesley Street and Queen's Park . It was formerly a female residence building for St. Michael's College administered by the Sisters of St. Joseph who ran St. Joseph's College School next door. The University of Toronto bought
1443-513: A firm basis for agreement and progress in disciplines such as philosophy and theology . Lonergan believed that the lack of an agreed method among scholars in such fields has inhibited substantive agreement from being reached and progress from being made, whereas in the natural sciences, for example, widespread agreement among scholars on the scientific method has enabled remarkable progress. The chapter on "Religious Commitment" in Method in Theology
1554-400: A generalization of empirical method (GEM) to investigate not only data given through exterior sensation, but also the internal data of consciousness. More specifically, objects are known while considering the corresponding operations of the subject and vice versa, experiencing and the subsequent operations of the intellect being components of both knowing and reality. Method, for Lonergan, is not
1665-418: A lesser way, Gadamer, remained under the influence of Kant when they refused to take seriously the possibility of grace and redemption. Lawrence makes the observation that Heidegger—influenced also by Augustine's inability to work out a theoretical distinction between grace and freedom—conflated finitude and fallenness in his account of the human being. "Sin" is therefore absorbed into "fallenness," and fallenness
1776-442: A medium-run equilibrium (or "potential") level, the process would be slow at best. Keynes coined the term liquidity preference (his preferred name for what is also known as money demand ) and explained how monetary policy might affect aggregate demand, at the same time offering clear policy recommendations for an active role of fiscal policy in stabilizing aggregate demand and hence output and employment. In addition, he explained how
1887-420: A parallel division of macroeconomic policies into short-run policies aimed at mitigating the harmful consequences of business cycles (known as stabilization policy ) and medium- and long-run policies targeted at improving the structural levels of macroeconomic variables. Stabilization policy is usually implemented through two sets of tools: fiscal and monetary policy. Both forms of policy are used to stabilize
1998-455: A passage in the Summa theologiae and suggested that the received interpretations were mistaken. A study of Thomas Aquinas on divine grace and human freedom was well-suited to his interest in working out a theoretical analysis of history. The dissertation was completed in 1940; it was rewritten and published as a series of articles in the journal Theological Studies . The articles were edited into
2109-623: A pontifical faculty (a status it retains) by becoming the School of Theology of St. Mary's University in Halifax, Nova Scotia and thus became able to offer ecclesiastical degrees in theology. In 1961, the college moved to a new site on Bayview Avenue in Willowdale, Toronto . There, it taught exclusively theology. The 40-acre site, was offered to the Jesuits as a location for the college by
2220-498: A similar effect. Government spending or tax cuts do not have to make up for the entire output gap . There is a multiplier effect that affects the impact of government spending. For instance, when the government pays for a bridge, the project not only adds the value of the bridge to output, but also allows the bridge workers to increase their consumption and investment, which helps to close the output gap. The effects of fiscal policy can be limited by partial or full crowding out . When
2331-484: A somewhat different manner, formulates what Lonergan calls "theological conclusions" from the hypostatic union regarding the ontological constitution of Christ as one person in two natures (theses 6–9), and his psychological constitution as a single subject of two subjectivities (thesis 10). The fourth part concerns "what belongs to Christ" ( de iis quae christi sunt ), including his grace, knowledge, sinlessness, and freedom (theses 11–14). The fifth and final section regards
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#17327718377132442-545: A special case of the more general Ramsey growth model , where households' savings rates are not constant as in the Solow model, but derived from an explicit intertemporal utility function . In the 1980s and 1990s endogenous growth theory arose to challenge the neoclassical growth theory of Ramsey and Solow. This group of models explains economic growth through factors such as increasing returns to scale for capital and learning-by-doing that are endogenously determined instead of
2553-466: A technique but a concrete pattern of operations. Lonergan maintained what he called critical realism . By realism , he affirmed that we make true judgments of fact and of value, and by critical , he based knowing and valuing in a critique of consciousness . GEM traces to their roots in consciousness the sources of all the meanings and values that make up personality, social orders, and historical developments. A more thorough overview of Lonergan's work
2664-748: A unique way, e.g., Bernard J. Tyrrell, "Christotherapy: A Theology of Christian Healing and Enlightenment Inspired by the Thought of Thomas Hora and Bernard Lonergan" in The Papin Festschrift: Wisdom and Knowledge, Essays in Honour of Joseph Papin, Volume II (ed. Joseph Armenti, Villanova University Press, 1976, pp. 293–329). While at the Gregorian University, Lonergan composed a two-volume Latin textbook, De Deo Trino (third edition, 1964). It has recently appeared in
2775-403: A whole intellectural framework - a novel theory of economics that explained why markets might not clear, which would evolve into a school of thought known as Keynesian economics , also called Keynesianism or Keynesian theory. In Keynes' theory, aggregate demand - by Keynes called "effective demand" - was key to determining output. Even if Keynes conceded that output might eventually return to
2886-547: Is affected. Expansionary monetary policy lowers interest rates, increasing economic activity, whereas contractionary monetary policy raises interest rates. In the case of a fixed exchange rate system, interest rate decisions together with direct intervention by central banks on exchange rate dynamics are major tools to control the exchange rate. In developed countries, most central banks follow inflation targeting , focusing on keeping medium-term inflation close to an explicit target, say 2%, or within an explicit range. This includes
2997-482: Is available at the Internet Encyclopedia of Philosophy . Lonergan's ideas include radical unintelligibility , theological critical realism , and functional specialization . Given the fact that no science can today be mastered by a single individual, Lonergan advocated sub-division of the scientific process in all fields. One of the leading voices in the effort to implement functional specialization
3108-477: Is divided into four parts. The first part is an interpretation of the divinity and humanity of Christ as presented in the New Testament (thesis 1). The second part recapitulates the formation of the dogmatic theological tradition of Christology up through the monothelite controversy in the seventh century (theses 2–5). The third part, which covers much the same material as The Constitution of Christ but in
3219-468: Is implemented through automatic stabilizers without any active decisions by politicians. Automatic stabilizers do not suffer from the policy lags of discretionary fiscal policy . Automatic stabilizers use conventional fiscal mechanisms, but take effect as soon as the economy takes a downturn: spending on unemployment benefits automatically increases when unemployment rises, and tax revenues decrease, which shelters private income and consumption from part of
3330-409: Is measured by the unemployment rate, i.e. the percentage of persons in the labor force who do not have a job, but who are actively looking for one. People who are retired, pursuing education, or discouraged from seeking work by a lack of job prospects are not part of the labor force and consequently not counted as unemployed, either. Unemployment has a short-run cyclical component which depends on
3441-507: Is not the methodology of theology as such, but only a very general methodology of science." In fact, by the time of writing Method in Theology , Lonergan had recognized that his proposal was along interdisciplinary lines. Moreover, his proposal was intended to move theology off a "list of academic disciplines" by appealing to patterns of operations yielding progress in "successful sciences." Lonergan's thinking in Method was, indeed, inspirational in bringing theological and psychology together in
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3552-403: Is often associated—with his fellow Jesuits Karl Rahner and Joseph Maréchal —with " transcendental Thomism ", i.e., a philosophy which attempts to combine Thomism with certain views or methods commonly associated with Immanuel Kant 's transcendental idealism . However, Lonergan did not regard this label as particularly helpful for understanding his intentions. Bernard Joseph Francis Lonergan
3663-416: Is referred to as an "environment's source function", and this function is depleted as resources are consumed or pollution contaminates the resources. The "sink function" describes an environment's ability to absorb and render harmless waste and pollution: when waste output exceeds the limit of the sink function, long-term damage occurs. The division into various time frames of macroeconomic research leads to
3774-539: Is simply part of the human condition. Lonergan builds on the "theorem of the supernatural" achieved in medieval times, as well as on the distinction between grace and freedom worked out by Thomas Aquinas, and so is able to remove all the brackets and return to the truly concrete with a unique synthesis of "Jerusalem and Athens." In 1970, he was made a Companion of the Order of Canada . In 1971, Loyola College , one of Concordia University 's founding institutions, awarded him
3885-464: Is that of an economy's openness, economic theory distinguishing sharply between closed economies and open economies . It is usual to distinguish between three time horizons in macroeconomics, each having its own focus on e.g. the determination of output: National output is the total amount of everything a country produces in a given period of time. Everything that is produced and sold generates an equal amount of income. The total net output of
3996-470: Is the product of two inputs: capital and labor. The Solow model assumes that labor and capital are used at constant rates without the fluctuations in unemployment and capital utilization commonly seen in business cycles. In this model, increases in output, i.e. economic growth, can only occur because of an increase in the capital stock, a larger population, or technological advancements that lead to higher productivity ( total factor productivity ). An increase in
4107-608: The Federal Reserve and the European Central Bank , which are generally considered to follow a strategy very close to inflation targeting, even though they do not officially label themselves as inflation targeters. In practice, an official inflation targeting often leaves room for the central bank to also help stabilize output and employment, a strategy known as "flexible inflation targeting". Most emerging economies focus their monetary policy on maintaining
4218-622: The Jesuit philosophy college on Wellington Street in downtown Toronto in September 1930. It then offered philosophy programmes to Jesuit scholastics preparing for priesthood. It was in 1943 that the programme of offerings was expanded to include theology. In 1954, the Jesuit seminary was formally named Collegium Christi Regis, The College of Christ the King. In 1956 Regis College was accredited as
4329-601: The Parliament of Ontario . It is to the south of St. Michael's College and is next to buildings that previously housed the offices of Marshall McLuhan . The building itself was the former home of William Mellis Christie and after his death it was the residence of his son Robert Jaffrey Christie. In the traditions of Jesuit spirituality, scholarship and service, Regis College promotes an integrated spirituality that emphasizes justice, critical dialogue and academic pursuits. As per all Jesuit institutions, it remains grounded in
4440-599: The Sisters of St. Joseph in 1958. In 1969, Regis College was one of the founding colleges of the Toronto School of Theology . Within its own federation, the University of Toronto granted all but the theology or divinity degrees. In 1970, the college joined the Association of Theological Schools in the United States and Canada . Membership was granted in 1980, and renewed in 2001 and 2011. In 1976,
4551-501: The University of Toronto , Lonergan wrote Insight: A Study of Human Understanding , inaugurating the generalized empirical method (GEM). GEM belongs to the movement of " transcendental Thomism " inaugurated by Joseph Maréchal . This method begins with an analysis of human knowing as divided into three levels – experience, understanding, and judgment – and, by stressing the objectivity of judgment more than Kant had done, develops
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4662-475: The multiplier effect would magnify a small decrease in consumption or investment and cause declines throughout the economy, and noted the role that uncertainty and animal spirits can play in the economy. The generation following Keynes combined the macroeconomics of the General Theory with neoclassical microeconomics to create the neoclassical synthesis . By the 1950s, most economists had accepted
4773-537: The "psychological" analogy of the Trinity . In The Triune God: Systematics , Lonergan develops the theory of intelligible (or spiritual) emanations in God as propounded by Thomas Aquinas . The volume begins with a discussion of the method of systematic theology which seeks an imperfect but highly fruitful understanding of the mysteries of faith by means of analogies. The following chapters develop an analogical conception of
4884-411: The 1940s attempted to build a long-run growth model inspired by Keynesian demand-driven considerations. The Solow–Swan model worked out by Robert Solow and, independently, Trevor Swan in the 1950s achieved more long-lasting success, however, and is still today a common textbook model for explaining economic growth in the long-run. The model operates with a production function where national output
4995-598: The Collected Works together with an interleaf English translation under the title The Triune God: Doctrines (2009) and The Triune God: Systematics (2007). In The Triune God: Doctrines , Lonergan begins with an examination of the dialectical process by which the dogma of the Trinity developed in the first four centuries. This section was previously published in English as The Way to Nicea . The second section of
5106-531: The Collected Works. The plan is to present two volumes, The Incarnate Word , which would include theses 1–14 in Latin with an interleaf English translation, and The Redemption , which would include theses 15–17 and the supplement on Redemption. In the 1930s and early 1940s, Lonergan developed an intense interest in macroeconomic analysis, but never published the manuscript he developed. In later life while teaching at Boston College , Lonergan returned his attention to
5217-499: The Great Depression struck, the reigning economists had difficulty explaining how goods could go unsold and workers could be left unemployed. In the prevailing neoclassical economics paradigm, prices and wages would drop until the market cleared, and all goods and labor were sold. Keynes in his main work, the General Theory , initiated what is known as the Keynesian revolution . He offered a new interpretation of events and
5328-545: The Gregorian University from 1953 to 1964. At the Gregorian, Lonergan taught Trinity and Christology in alternate years, and produced substantial textbooks on these topics. In 1964, he made another hasty return to North America, this time to be treated for lung cancer. He was appointed again to Regis College from 1965 to 1975, was Stillman Professor of Divinity at Harvard University in 1971–72, and distinguished visiting professor at Boston College from 1975 until 1983. He died at
5439-471: The Jesuit infirmary in Pickering, Ontario , on 26 November 1984. Lonergan described the genesis of his thought up to the mid-1950s in an interview. Augustine and John Henry Newman were major influences upon his early thinking. J. A. Stewart's study of Plato's doctrine of ideas was also influential. In the epilogue to Insight , Lonergan mentions the important personal transformation wrought in him by
5550-630: The Jesuit theology faculty in Montreal in 1940, as well as the Thomas More Institute in 1945–46. In the event, he would not formally defend his dissertation and receive his doctorate until a special board of examiners from the Immaculee Conception was convened in Montreal on 23 December 1946. Lonergan taught theology at Regis College (a theological school attached to the University of Toronto ) from 1947 to 1953, and at
5661-475: The Keynesian school. A central development in new classical thought came when Robert Lucas introduced rational expectations to macroeconomics. Prior to Lucas, economists had generally used adaptive expectations where agents were assumed to look at the recent past to make expectations about the future. Under rational expectations, agents are assumed to be more sophisticated. Consumers will not simply assume
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#17327718377135772-593: The Loyola Medal. Concordia also awarded Lonergan an honorary doctorate in 1977. An annual Lonergan Workshop is held at Boston College, under the leadership of Frederick G. Lawrence. The proceedings of the Workshop are published under the same name, Lonergan Workshop , edited by Frederick G. Lawrence. The Workshop began in Lonergan's lifetime and continued after his death. The West Coast Methods Institute sponsors
5883-1173: The Lucas critique. Like classical models, new classical models had assumed that prices would be able to adjust perfectly and monetary policy would only lead to price changes. New Keynesian models investigated sources of sticky prices and wages due to imperfect competition , which would not adjust, allowing monetary policy to impact quantities instead of prices. Stanley Fischer and John B. Taylor produced early work in this area by showing that monetary policy could be effective even in models with rational expectations when contracts locked in wages for workers. Other new Keynesian economists, including Olivier Blanchard , Janet Yellen , Julio Rotemberg , Greg Mankiw , David Romer , and Michael Woodford , expanded on this work and demonstrated other cases where various market imperfections caused inflexible prices and wages leading in turn to monetary and fiscal policy having real effects. Other researchers focused on imperferctions in labor markets, developing models of efficiency wages or search and matching (SAM) models, or imperfections in credit markets like Ben Bernanke . By
5994-517: The annual Fallon Memorial Lonergan Symposium at Loyola Marymount University. The Lonergan Symposium has been meeting for 32 years. Boston College has a Lonergan Institute , and also publishes the bi-annual Method: Journal of Lonergan Studies . The journal was founded, and edited until 2013, by Mark D. Morelli. The Lonergan Studies Newsletter is put out four times a year by the Lonergan Research Institute, Toronto; it provides
6105-447: The business cycle, and a more permanent structural component, which can be loosely thought of as the average unemployment rate in an economy over extended periods, and which is often termed the natural or structural rate of unemployment. Cyclical unemployment occurs when growth stagnates. Okun's law represents the empirical relationship between unemployment and short-run GDP growth. The original version of Okun's law states that
6216-459: The case of a very low interest level, the economy may be in a liquidity trap in which monetary policy becomes ineffective, which makes fiscal policy the more potent tool to stabilize the economy. Thirdly, in regimes where monetary policy is tied to fulfilling other targets, in particular fixed exchange rate regimes, the central bank cannot simultaneously adjust its interest rates to mitigate domestic business cycle fluctuations, making fiscal policy
6327-570: The college moved to St. Mary Street in Downtown Toronto , close to its present site. The Bayview site was sold to Ontario Bible College, which became the Tyndale University College and Seminary in 2003. That year, it admitted its first non-Jesuit students. Since 1978, by virtue of a change made in its charter, the University of Toronto has granted theology degrees conjointly with Regis College. Regis College became
6438-485: The competence and honesty of his professors at Heythrop, but was deeply dissatisfied with their Suarezian philosophy. While at Heythrop, Lonergan also took external degrees in mathematics and classics at the University of London . In 1930 he returned to Canada, where he taught for three years at Loyola College, Montreal . In 1933, Lonergan was sent for theological studies at the Pontifical Gregorian University in Rome. He
6549-441: The concept of ad maiorem Dei gloriam , for the greater glory of God. Regis College confers three major types of theological degrees: basic degree programmes, graduate degree programmes, and ecclesiastical degrees. Civil degrees are awarded conjointly by Regis College and the University of Toronto and ecclesiastical degrees are awarded solely by Regis College. The Jesuit Honor Society's chapter of Alpha Sigma Nu
6660-409: The consequences of international trade in goods , financial assets and possibly factor markets like labor migration and international relocation of firms (physical capital). It explores what determines import , export , the balance of trade and over longer horizons the accumulation of net foreign assets . An important topic is the role of exchange rates and the pros and cons of maintaining
6771-445: The death and resurrection of Christ, the cross of Christ, the satisfaction given by Christ, and the work of Christ. Among Lonergan's more noteworthy contributions to Christology include his theory about the ontological and psychological constitution of Christ, his interpretation of Christ's human knowing, and his interpretation of Christ's redemptive work. Both De Verbo Incarnato and the supplement on Redemption are in preparation for
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#17327718377136882-404: The development of the macroeconomic research mainstream . Macroeconomics encompasses a variety of concepts and variables, but above all the three central macroeconomic variables are output, unemployment, and inflation. Besides, the time horizon varies for different types of macroeconomic topics, and this distinction is crucial for many research and policy debates. A further important dimension
6993-678: The difference may be considerable. Economists interested in long-run increases in output study economic growth. Advances in technology, accumulation of machinery and other capital , and better education and human capital , are all factors that lead to increased economic output over time. However, output does not always increase consistently over time. Business cycles can cause short-term drops in output called recessions . Economists look for macroeconomic policies that prevent economies from slipping into either recessions or overheating and that lead to higher productivity levels and standards of living . The amount of unemployment in an economy
7104-565: The divine processions (as intelligible emanations), relations, persons, and the two missions of the Word and Spirit. Lonergan produced two textbooks in Christology . In 1956 he produced a supplemental volume De Constitutione Christi Ontologica et Psychica ; the fourth and final edition of 1964 was presented in the Collected Works with an interleaf translation as The Ontological and Psychological Constitution of Christ (2002). Lonergan clarifies
7215-545: The economic interests of his younger days. From 1978 until 1983, Lonergan taught the course "Macroeconomics and the Dialectic of History" at Boston College for one semester each year. The University of Toronto Press has published his two works on economics : For a New Political Economy and Macroeconomic Dynamics: An Essay in Circulation Analysis Lonergan described his philosophical program as
7326-440: The economic system is dependant upon the environment. In this case, the circular flow of income diagram may be replaced by a more complex flow diagram reflecting the input of solar energy, which sustains natural inputs and environmental services which are then used as units of production . Once consumed, natural inputs pass out of the economy as pollution and waste. The potential of an environment to provide services and materials
7437-529: The economy , i.e. limiting the effects of the business cycle by conducting expansive policy when the economy is in a recession or contractive policy in the case of overheating . Structural policies may be labor market policies which aim to change the structural unemployment rate or policies which affect long-run propensities to save, invest, or engage in education or research and development. Central banks conduct monetary policy mainly by adjusting short-term interest rates . The actual method through which
7548-454: The economy is usually measured as gross domestic product (GDP). Adding net factor incomes from abroad to GDP produces gross national income (GNI), which measures total income of all residents in the economy. In most countries, the difference between GDP and GNI are modest so that GDP can approximately be treated as total income of all the inhabitants as well, but in some countries, e.g. countries with very large net foreign assets (or debt),
7659-502: The economy was sufficient to explain the Great Depression , and that aggregate demand oriented explanations were not necessary. Friedman also argued that monetary policy was more effective than fiscal policy; however, Friedman doubted the government's ability to "fine-tune" the economy with monetary policy. He generally favored a policy of steady growth in money supply instead of frequent intervention. Friedman also challenged
7770-463: The economy, could hardly generate the large short-run output fluctuations that we observe. In addition, there is strong empirical evidence that monetary policy does affect real economic activity, and the idea that technological regress can explain recent recessions seems implausible. Despite criticism of the realism in the RBC models, they have been very influential in economic methodology by providing
7881-601: The entire economy is called inflation . When prices decrease, there is deflation . Economists measure these changes in prices with price indexes . Inflation will increase when an economy becomes overheated and grows too quickly. Similarly, a declining economy can lead to decreasing inflation and even in some cases deflation. Central bankers conducting monetary policy usually have as a main priority to avoid too high inflation, typically by adjusting interest rates. High inflation as well as deflation can lead to increased uncertainty and other negative consequences, in particular when
7992-466: The exogenous technological improvement used to explain growth in Solow's model. Another type of endogenous growth models endogenized the process of technological progress by modelling research and development activities by profit-maximizing firms explicitly within the growth models themselves. Since the 1970s, various environmental problems have been integrated into growth and other macroeconomic models to study their implications more thoroughly. During
8103-405: The fall in market income. There is a general consensus that both monetary and fiscal instruments may affect demand and activity in the short run (i.e. over the business cycle). Economists usually favor monetary over fiscal policy to mitigate moderate fluctuations, however, because it has two major advantages. First, monetary policy is generally implemented by independent central banks instead of
8214-478: The first examples of general equilibrium models based on microeconomic foundations and a specification of underlying shocks that aim to explain the main features of macroeconomic fluctuations, not only qualitatively, but also quantitatively. In this way, they were forerunners of the later DSGE models. New Keynesian economists responded to the new classical school by adopting rational expectations and focusing on developing micro-founded models that were immune to
8325-400: The foundation of every kind of inquiry and the basic pattern of operations undergirding methodical investigation in every field. A second key, one which subsumes the first, is a global "turn to the idea" of functionally specialized collaboration. Lonergan's hope was that his discovery and articulation of eight dynamically-related but distinct tasks would, in good time, subsume, if not replace,
8436-429: The government takes on spending projects, it limits the amount of resources available for the private sector to use. Full crowding out occurs in the extreme case when government spending simply replaces private sector output instead of adding additional output to the economy. A crowding out effect may also occur if government spending should lead to higher interest rates, which would limit investment. Some fiscal policy
8547-498: The inflation (or deflation) is unexpected. Consequently, most central banks aim for a positive, but stable and not very high inflation level. Changes in the inflation level may be the result of several factors. Too much aggregate demand in the economy will cause an overheating , raising inflation rates via the Phillips curve because of a tight labor market leading to large wage increases which will be transmitted to increases in
8658-538: The interest rate is changed differs from central bank to central bank, but typically the implementation happens either directly via administratively changing the central bank's own offered interest rates or indirectly via open market operations . Via the monetary transmission mechanism , interest rate changes affect investment , consumption , asset prices like stock prices and house prices , and through exchange rate reactions export and import . In this way aggregate demand , employment and ultimately inflation
8769-466: The late 1990s, economists had reached a rough consensus. The market imperfections and nominal rigidities of new Keynesian theory was combined with rational expectations and the RBC methodology to produce a new and popular type of models called dynamic stochastic general equilibrium (DSGE) models. The fusion of elements from different schools of thought has been dubbed the new neoclassical synthesis . These models are now used by many central banks and are
8880-417: The macro economy. RBC models were created by combining fundamental equations from neo-classical microeconomics to make quantitative models. In order to generate macroeconomic fluctuations, RBC models explained recessions and unemployment with changes in technology instead of changes in the markets for goods or money. Critics of RBC models argue that technological changes, which typically diffuse slowly throughout
8991-434: The macro/micro divide is institutionalized in the field of economics. Most economists identify as either macro- or micro-economists. Macroeconomics is traditionally divided into topics along different time frames: the analysis of short-term fluctuations over the business cycle , the determination of structural levels of variables like inflation and unemployment in the medium (i.e. unaffected by short-term deviations) term, and
9102-423: The metaphysical principles of Christ's constitution as one person in two distinct natures, and transposes that framework to address the consciousness of Christ as a single subject of two distinct conscious subjectivities. Beginning with an edition of 1960, Lonergan introduced his own textbook for his Christology course, De Verbo Incarnato . Subsequent editions were published in 1961 and in 1964. De Verbo Incarnato
9213-464: The money market is modeled as giving equilibrium between the money supply and liquidity preference (equivalent to money demand). Regis College, Toronto Regis College is a postgraduate theological college of the University of Toronto . Founded in 1930, it is the Jesuit school of theology in Canada and a member institution of the Toronto School of Theology . Regis College began as
9324-425: The most up-to-date bibliographical information on the Lonergan movement. Recently, Seton Hall University has put out The Lonergan Review . Lonergan Centres have been set up in various places (see below, External links). The Lonergan Research Institute at Toronto holds the Lonergan archives as well as a good collection of secondary material, including a complete collection of dissertations on Lonergan's work. Much of
9435-420: The new classical real business cycle models , microfounded computable general equilibrium (CGE) models used for medium-term (structural) questions like international trade or tax reforms, Dynamic stochastic general equilibrium (DSGE) models used to analyze business cycles, not least in many central banks, or integrated assessment models like DICE . The IS–LM model, invented by John Hicks in 1936, gives
9546-564: The oil crises of the 1970s when scarcity problems of natural resources were high on the public agenda, economists like Joseph Stiglitz and Robert Solow introduced non-renewable resources into neoclassical growth models to study the possibilities of maintaining growth in living standards under these conditions. More recently, the issue of climate change and the possibilities of a sustainable development are examined in so-called integrated assessment models , pioneered by William Nordhaus . In macroeconomic models in environmental economics ,
9657-606: The only usable tool for such countries. Macroeconomic teaching, research and informed debates normally evolve around formal ( diagrammatic or equational ) macroeconomic models to clarify assumptions and show their consequences in a precise way. Models include simple theoretical models, often containing only a few equations, used in teaching and research to highlight key basic principles, and larger applied quantitative models used by e.g. governments, central banks, think tanks and international organisations to predict effects of changes in economic policy or other exogenous factors or as
9768-480: The original simple Phillips curve relationship between inflation and unemployment. Friedman and Edmund Phelps (who was not a monetarist) proposed an "augmented" version of the Phillips curve that excluded the possibility of a stable, long-run tradeoff between inflation and unemployment. When the oil shocks of the 1970s created a high unemployment and high inflation, Friedman and Phelps were vindicated. Monetarism
9879-465: The political institutions that control fiscal policy. Independent central banks are less likely to be subject to political pressures for overly expansionary policies. Second, monetary policy may suffer shorter inside lags and outside lags than fiscal policy. There are some exceptions, however: Firstly, in the case of a major shock, monetary stabilization policy may not be sufficient and should be supplemented by active fiscal stabilization. Secondly, in
9990-449: The price level are directly caused by changes in the money supply . Whereas there is empirical evidence that there is a long-run positive correlation between the growth rate of the money stock and the rate of inflation, the quantity theory has proved unreliable in the short- and medium-run time horizon relevant to monetary policy and is abandoned as a practical guideline by most central banks today. Open economy macroeconomics deals with
10101-518: The price of the products of employers. Too little aggregate demand will have the opposite effect of creating more unemployment and lower wages, thereby decreasing inflation. Aggregate supply shocks will also affect inflation, e.g. the oil crises of the 1970s and the 2021–2023 global energy crisis . Changes in inflation may also impact the formation of inflation expectations , creating a self-fulfilling inflationary or deflationary spiral. The monetarist quantity theory of money holds that changes in
10212-855: The primary archival material is available online at the Bernard Lonergan Archive (see below, External links), and a site for secondary material has also been set up, thanks to the work of Robert M. Doran. Macroeconomics Heterodox Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies . Macroeconomists study topics such as output / GDP (gross domestic product) and national income , unemployment (including unemployment rates ), price indices and inflation , consumption , saving , investment , energy , international trade , and international finance . Macroeconomics and microeconomics are
10323-639: The redemptive work of Christ, in three theses: redemption in the New Testament (thesis 15), the satisfaction given by Christ (thesis 16), and "Understanding the Mystery: The Law of the Cross," presenting Lonergan's synthetic understanding of Christ's work (thesis 17). He also produced a separate treatise on the Redemption, of uncertain date and never published. This treatise treats, in six chapters divided into 45 articles, good and evil, divine justice,
10434-416: The same predictions even as the underlying model generating the data changed. He advocated models based on fundamental economic theory (i.e. having an explicit microeconomic foundation ) that would, in principle, be structurally accurate as economies changed. Following Lucas's critique, new classical economists, led by Edward C. Prescott and Finn E. Kydland , created real business cycle (RBC) models of
10545-494: The savings rate leads to a temporary increase as the economy creates more capital, which adds to output. However, eventually the depreciation rate will limit the expansion of capital: savings will be used up replacing depreciated capital, and no savings will remain to pay for an additional expansion in capital. Solow's model suggests that economic growth in terms of output per capita depends solely on technological advances that enhance productivity. The Solow model can be interpreted as
10656-551: The service of a Christian understanding of the universe. Lonergan's program was to come to terms with modern scientific, historical, and hermeneutical thinking in a comparable way. He pursued this program in his two most fundamental works, Insight and Method in Theology . One key to Lonergan's project is self-appropriation , that is, the personal discovery and personal embrace of the dynamic structure of inquiry, insight, judgment, and decision. By self-appropriation, one finds in one's own intelligence, reasonableness, and responsibility
10767-464: The site from the Sisters of St. Joseph and leases it to the college. Construction started to make the house suitable for the college in time for the start of the academic year in September 2009. As part of the leasing agreement with the university, the half of the building closest to the school was converted so that it could be used by the university's Faculty of Music. The building is located opposite
10878-451: The splintered and oftentimes isolated results of what he called "field specialization" and "subject specialization" that prevail in the modern university. Along the same lines, in the 1969 essay "The Future of Christianity," he wrote that the transition from "classicist culture" to "modern culture" would require "a complete restructuring of Catholic theology." The needed restructuring applies to all academic disciplines and all creeds. Lonergan
10989-506: The study of St. Thomas' accounts of knowledge and cognition . The articles were later collected and published under the title Verbum: Word and Idea in Aquinas . In 1945 Lonergan gave a course at the Thomas More Institute in Montreal that extended from September to April 1946 entitled "Thought and Reality," and the success of that course was the inspiration behind his decision to write the book Insight . While teaching theology at Collegium Christi Regis, now Regis College affiliated with
11100-749: The study of long-term economic growth. It also studies the consequences of policies targeted at mitigating fluctuations like fiscal or monetary policy , using taxation and government expenditure or interest rates, respectively, and of policies that can affect living standards in the long term, e.g. by affecting growth rates. Macroeconomics as a separate field of research and study is generally recognized to start in 1936, when John Maynard Keynes published his The General Theory of Employment, Interest and Money , but its intellectual predecessors are much older. Since World War II, various macroeconomic schools of thought like Keynesians , monetarists , new classical and new Keynesian economists have made contributions to
11211-414: The synthesis view of the macroeconomy. Economists like Paul Samuelson , Franco Modigliani , James Tobin , and Robert Solow developed formal Keynesian models and contributed formal theories of consumption, investment, and money demand that fleshed out the Keynesian framework. Milton Friedman updated the quantity theory of money to include a role for money demand. He argued that the role of money in
11322-505: The two most general fields in economics. The focus of macroeconomics is often on a country (or larger entities like the whole world) and how its markets interact to produce large-scale phenomena that economists refer to as aggregate variables. In microeconomics the focus of analysis is often a single market, such as whether changes in supply or demand are to blame for price increases in the oil and automotive sectors. From introductory classes in "principles of economics" through doctoral studies,
11433-419: The underpinnings of aggregate demand (itself discussed below). It answers the question "At any given price level, what is the quantity of goods demanded?" The graphic model shows combinations of interest rates and output that ensure equilibrium in both the goods and money markets under the model's assumptions. The goods market is modeled as giving equality between investment and public and private saving (IS), and
11544-402: The word "macroeconomics" itself in a journal title in 1946. but naturally several of the themes which are central to macroeconomic research had been discussed by thoughtful economists and other writers long before 1936. In particular, macroeconomic questions before Keynes were the topic of the two long-standing traditions of business cycle theory and monetary theory . William Stanley Jevons
11655-699: The work advances dogmatic theses on (1) the consubstantiality of the Son with the Father, (2) the divinity of the Holy Spirit, (3) the distinction of the divine persons by relations of origin, and (4) the procession of the Holy Spirit from the Father and the Son (the Filioque ). The fifth and final thesis is that the Trinity is a theological mystery in the strict sense and can only be understood analogically. A concluding scholion presents New Testament evidence in favor of
11766-499: Was Philip McShane . Frederick G. Lawrence has made the claim that Lonergan's work may be seen as the culmination of the postmodern hermeneutic revolution begun by Martin Heidegger . Heidegger replaced Edmund Husserl 's phenomenology of pure perception with his own linguistic phenomenology. Hans-Georg Gadamer worked out this seminal insight into his philosophical hermeneutics. According to Lawrence, however, Heidegger, and in
11877-734: Was born on 17 December 1904 in Buckingham, Quebec , Canada. After four years at Loyola College (Montreal) , he entered the Upper Canada (English) province of the Society of Jesus in 1922 and made his profession of vows on the Feast of St Ignatius of Loyola , 31 July 1924. After two further years of formation and education, he was assigned to study scholastic philosophy at Heythrop College , then in Oxfordshire, in 1926. Lonergan respected
11988-480: Was delivered in a lecture at The Villanova University Symposium and published in: The Pilgrim People: A Vision with Hope , Volume IV (ed. Joseph Papin, Villanova University Press, 1970). Karl Rahner, S.J., however, criticized Lonergan's theological method in a short article entitled: "Some Critical Thoughts on 'Functional Specialties in Theology'" where he states: "Lonergan's theological methodology seems to me to be so generic that it really fits every science , and hence
12099-468: Was one of the pioneers of the first tradition, whereas the quantity theory of money , labelled the oldest surviving theory in economics, as an example of the second was described already in the 16th century by Martín de Azpilcueta and later discussed by personalities like John Locke and David Hume . In the first decades of the 20th century monetary theory was dominated by the eminent economists Alfred Marshall , Knut Wicksell and Irving Fisher . When
12210-661: Was ordained to the Catholic priesthood in 1936. After a year of Jesuit formation (" tertianship ") in Amiens , Lonergan returned to the Gregorian University in 1937 to pursue doctoral studies in theology. Due to the Second World War , he was whisked out of Italy and back to Canada in May 1940, just two days before the scheduled defence of his doctoral dissertation . He began teaching theology at College de l'Immaculee Conception,
12321-416: Was particularly influential in the early 1980s, but fell out of favor when central banks found the results disappointing when trying to target money supply instead of interest rates as monetarists recommended, concluding that the relationships between money growth, inflation and real GDP growth are too unstable to be useful in practical monetary policy making. New classical macroeconomics further challenged
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