How did economics reach a point where modeling strategy became a key driving force to the development of economic theories of how the world works? This project investigates the applied mathematics that emerged during World War II and the Cold War when economists, statisticians, mathematicians, and engineers worked together on designing mechanisms and operations of warfare. The algorithmic solution protocols underwritten by a US government at war embody not just a mathematical model but also a strategy of how to model a problem and solve it with an executable algorithm that approximates a solution in the form of a rule of action. The relevance of this history of economic thought project to examining the context of our current financial instability lies with understanding the development of modeling strategies that drove macroeconomic theory in the direction of the analysis of general equilibrium systems while championing the rationality of consumers and the efficiency of markets.
This research project examines how US military needs during World War II and the Cold War steered engineers and applied mathematicians to an economic way of thinking about scarce resources, including limited computational resources, and how economists subsequently incorporated that into mathematics.
Leaders
