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Don Patinkin
Neo-Keynesian economics
Birth January 8, 1922(1922-01-08)
Chicago, Illinois
Death August 7, 1995 (aged 73)
Jerusalem, Israel
Nationality American/Israeli
Institution Hebrew University of Jerusalem
Field Monetary economics
Alma mater University of Chicago
Influences Oskar Lange
Frank Knight
John Maynard Keynes

Don Patinkin (Hebrew: דן פטינקין) (January 8, 1922 – August 7, 1995) was an influential Israeli/American monetary economist. Trained at Chicago under the tutelage of Oskar Lange and half-participating in the goings-on at the Cowles Commission next door, Patinkin emerged as an authority in monetary theory in the post-war years.



Patinkin was born in Chicago, Illinois, the son of a Jewish emigrant from Russia. He graduated from the University of Chicago in 1943, the same year he completed a decade of study of the Talmud at the Chicago Yeshiva.[1]

His book Money, Interest and Prices (1956) is a remembered today as a landmark investigation and summary of the state of the Neo-Keynesian macroeconomic theory of its time, and is frequently described as a 'classic'.[2][3] It investigated theoretical problems within Keynesian economics, and drew up points which would later be of interest to many different fields: a "disequilibrium" formulation of macroeconomics, the problems arising from the distinction between stocks and flows, stability and path-dependency of equilibria, etc.

The book's central goal, already announced in a series of articles from 1948 to 1954, was to try to integrate monetary theory and Walrasian value theory. This task not only became central to Neo-Keynesian economics but was also instrumental in giving birth to various strands of Post-Walrasian theory. That integration, which had long eluded the marginalists, rested on the abandonment of Say's Law and the placing of money in the utility function—thus violating the principle of homogeneity of demand. The Quantity Theory, Patinkin claimed, indeed could not work without that violation.

An important criticism of Patinkin's utility function in which real money balances appear along with other goods came from Frank Hahn in “On Some Problems of Proving the Existence of an Equilibrium in a Monetary Economy” in Theory of Interest Rates (1965), edited by Hahn and Brechling. Hahn showed that Patinkin's formulation could not ensure a non-zero price for money in equilibrium. Hence Patinkin's was a model in which money might not be held and therefore failed a vital requirement of a monetary economy.

The "Patinkin Controversy" highlighted the inability of Neoclassical theory to satisfactorily incorporate money and led to a reassessment of the micro-macro link by the Post-Walrasians in the 1960s and 1970s as well as numerous attempts to reformulate a modern theory of money and credit.

Patinkin was also instrumental (1948, 1949) in constructing the "rigidity" interpretation of Keynes that was to become central to the Neo-Keynesian synthesis. While recurrently engaged in the monetary debate he began, Don Patinkin, in his later years, began a deeper study of the works of J.M. Keynes, producing two books (1976, 1982) and a series of papers which challenged the Post Keynesian interpretation. His parallel work on the history of the Chicago School (1981) also challenged Milton Friedman's claims that he was working in its "oral tradition".

Don Patinkin worked at the Hebrew University of Jerusalem for most of his post-Chicago life.

In 1970, Patinkin was awarded the Israel Prize, for social sciences.[4]


  • "Mercantilism and the Readmission of Jews in England", 1946, Jewish Social Studies
  • "Multiple-Plant Firms, Cartels and Imperfect Competition", 1947, QJE.
  • "Relative Prices, Say's Law, and the Demand for Money", 1948, Econometrica.
  • "Price Flexibility and Full Employment", 1948, AER.
  • "The Indeterminacy of Absolute Prices in Classical Economic Theory", 1949, Econometrica.
  • "Involuntary Unemployment and the Keynesian Supply Function", 1949, EJ.
  • "A Reconsideration of the General Equilibrium Theory of Money", 1950, RES.
  • "The Invalidity of Classical Monetary Theory", 1951, Econometrica.
  • "Further Considerations of the General Equilibrium Theory of Money", 1951, RES.
  • "The Limitations of Samuelson's `Correspondence Principle'", 1952, Metroeconomica.
  • "Wicksell's `Cumulative Process'", 1952, EJ.
  • "Dichotomies of the Pricing Process in Economic Theory", 1954, Economica.
  • "Keynesian Economics and the Quantity Theory", 1954, in Kurihara, editor, Post-Keynesian Economics.
  • "Monetary and Price Developments in Israel", 1955, Scripta Hierosolymitana.
  • "Money, Interest and Prices: An integration of monetary and value theory", 1956.
  • "Liquidity Preference and Loanable Funds: Stock and flow analysis", 1958, Economica.
  • "Secular Price Movements and Economic Development: Some theoretical aspects", in Bonne, editor, The Challenge of Development.
  • "The Israel Economy: The first decade", 1959.


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