Dear friends and colleagues: this is to inform you that the second issue 2005 of Storia del Pensiero Economico just appeared in print. Please see below for the table of content and abstracts of the articles. Best Luca Fiorito Storia del Pensiero Economico Address fo subscription and submission: [log in to unmask] Abstracts � 2005/2 Frank Hahn GENERAL EQUILIBRIUM FOR INTELLECTUAL HISTORIANS Pages: 5-12 The paper discusses the sense in which Adam Smith's vision of the market encompasses general equilibrium theory. Increasing abstraction, and increasing neglect of Marshallian qualifications, made general equilibrium the core of Neo-classical theory. The paper argues that Neo-classical theory has been enormously fruitful because it contained within it the seeds of further advance in our understanding. Through the lens of general equilibrium even Keynes's analysis of unemployment can be usefully interpreted as a case of market failure. But Neo-classical theory in general, and general equilibrium in particular, has been given more empirical weight than it can support. JEL Classification: B120, B200, D500 Key-words: General equilibrium theory; Neo-classical theory Marcello Basili and Carlo Zappia AN INTERVIEW WITH FRANK HAHN ON THE OCCASION OF HIS 80TH BIRTHDAY Pages: 13-18 This interview, conducted in Cambridge in January 2005, mostly deals with Frank Hahn's view of economics. Hahn kindly accepted to discuss both the theoretical aspects concerning his contribution to the development of general equilibrium theory and the methodological issues inherent in his viewpoint that theoretical models can prove useful in the study actual economic phenomena. A few notes related to his period at the Economics Department in Siena close the interview. JEL Classification: A110, B410, D520 Key-words: Economic theory; General equilibrium; Methodology Warren J. Samuels, Kirk D. Johnson and Marianne Johnson EDWIN L. GODKIN AS PRECURSOR TO HAYEK ON THE RELATION OF IGNORANCE TO POLICY Pages: 19-38 This paper is the fourth and final part of a long essay examining the ideas of the 8th Duke of Argyll and Edwin L. Godkin that anticipate Hayek on the principle of unintended and unforeseen consequences. In this part, the authors provide a synthesis of the ideas of Argyll, Godkin, and Hayek on unforeseen and unintended consequences and structure a general model of ignorance which analyses key questions around: i. the source of ignorance; ii. the structure of ignorance and the forms which ignorance takes; iii. the consequences of ignorance. JEL Classification: B130, B310 Key Words: Argyll, Godkin, Hayek, unforeseen and unintended consequences Stefano Figuera THE BANK DEPOSIT MULTIPLIER AND THE MONEY SUPPLY: A CRITICAL APPRAISAL Pages: 29-80 Theoretical considerations by economists of the neoclassical school regarding the process of multiplying deposits reveal a growing interest in problems concerning the nature of money supply and the role of the banking system in a capitalist economy. These reflections have proved unsatisfactory under some profiles. The Keynesian theory, underlining the importance of the credit side of money, offers instruments for a correct approach to these theoretical aspects. Keynes' analysis remains essential to define the nature of money supply and the various functions of the banking system and offers the basis for subsequent theoretical developments which have proved decisive for understanding the monetary nature of the capitalist economy. JEL Classification: E120, E510, G210. Keywords: Bank deposit multiplier, money supply, neoclassical theory of money, Keynesian theory of money, monetary theory of production. Piero Barucci ON THE CIRCULAR PROCESS OF THE EVOLUTION OF ECONOMIC THEORY Pages: 81-97 This paper presents an interpretative model for the evolution of economic knowledge. The central theme is that in the history of economic thought we can discern a continuous interdependence between the environment and the evolution of economic theory. This interdependence may be divided into three distinct phases each discussed in the paper. The first has to do with the theorizing; the second with the spreading of theoretical results; the third with the influence that political economy has managed to obtain in shaping economic policy decisions. As far as the actors of this process are concerned, we can distinguish between those who produce the analytical advancement, those who make it circulate, those who utilize it and endeavour to have some of its results to be eventually applied by Parliaments, governments, industries, banks and independent Authorities. The process is of a circular/cumulative kind, in the sense that the third phase (policy decisions) has in its turn a feedback on the environment, stimulating new theoretical responses from the economic profession, therefore starting a new "cycle". JEL Classification: B0; B4. Keywords: Economic knowledge; evolution of economic thought; historical reconstruction; rational reconstruction.