Taylor, Lance 1940–
Lance Taylor is an economist who has contributed widely to development economics and nonorthodox economic theory. After receiving his PhD in economics at Harvard in 1968, he taught at the leading economics departments of Harvard and Massachusetts Institute of Technology and then moved to a self-proclaimed heterodox department at the New School, a university in New York.
Taylor’s early work deals with mainstream development topics, such as the econometric and simulation modeling of changes in the sectoral distribution of production in the course of development. He also explored development planning models, including research on numerical methods in nonlinear programming. While working in Chile in the 1970s, Taylor was exposed to the heterodox structuralist ideas of the United Nations Economic Commission for Latin America, and he observed firsthand how distributional conflict affects the economy. His subsequent models are more heterodox, departing from the orthodox neoclassical “closure” with full employment of labor; instead, they stress the role of aggregate demand and distributional conflict.
These ideas crystallized into what Taylor (1983, 1991) calls the structuralist approach to development macroeconomics. The starting point is a model of demand-determined output along Keynes-Kalecki lines that examines the relationship between output growth and income distribution. The model is then extended to deal with interactions between industrial and agricultural sectors, asset markets and financial fragility, wage-price inflation due to distributional conflict, fiscal constraints on growth, international issues including debt and foreign exchange problems, and the interaction between rich and poor countries. Drawing on these theoretical contributions, Taylor, with his colleagues, developed structuralist computable macroeconomic models for a number of developing countries. From a sole focus on developing countries, Taylor’s (1991, 2004) emphasis shifted to macroeconomic theory more generally, as applied to both developed and developing countries. Thus, while in mainstream economics there has been a trend toward applying theories constructed for developed countries to development issues, for Taylor there is a reverse tendency.
Taylor also worked extensively on economic policy in developing countries, leading numerous projects with collaborators from many countries. He provided some of the most rigorous and comprehensive criticisms of International Monetary Fund stabilization policies (see Taylor 1988). He also addressed the macroeconomic, distributional, and environmental consequences of economic liberalization policies adopted by developing and postso-cialist economies, as well as the impact of such policies on the international financial system. This work not only draws on his theoretical models, but also his broader political economy perspective and his deep knowledge of the institutions of developing countries.
Taylor’s opposition to neoliberal one-size-fits-all policies has been very influential, both because of his firm analytical grounding and his insistence that appropriate policies should take into account the specific structures and institutions of individual countries. His theoretical contributions, however, have not received the attention from mainstream economists that they deserve because of his departure from their protocol of using optimization as a basis of economic theorizing. But his structuralist alter-native—of starting with macroeconomic accounting identities, then adding appropriate equations representing the behavior of relevant groups and the institutional attributes of particular economies based on careful historical and empirical work—may yet prove to be a more productive way of analyzing the operations of actual economies.
Taylor, Lance. 1988. Varieties of Stabilization Experience: Towards Sensible Macroeconomics in the Third World. Oxford: Clarendon.
Taylor, Lance. 1991. Income Distribution, Inflation, and Growth: Lectures on Structuralist Macroeconomic Theory. Cambridge, MA: MIT Press.
Taylor, Lance. 2004. Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream. Cambridge, MA: Harvard University Press.
Amitava Krishna Dutt