Tom Sargent textbook on Dynamic Macro gives credit to Levhari Srinivasan

February 26, 2014

Thomas Sargent’s textbook on Dynamic Macroeconomic Theory gives credit to Levhari Srinivasan instead of to Nils Hakansson for the infinite horizon one risky asset multiperiod consumption savings investment decision.

http://en.wikipedia.org/wiki/Thomas_J._Sargent

Page 68 of text. Search on Levhari

The exercise manual shows this on page 6. Search on Levhari or Srinivasan in the book.

The Hakansson paper published in 1970 contains this as a special case and this was in the 1966 working paper sent to a distribution list by UCLA.

http://www.hakansson.com/nils/papers/optimal70.htm

Thomas Sargent won the Nobel Prize.  He got his Ph.D. at Harvard in 1968 the same year as Hayne Leland.  Leland’s thesis was on intertemporal dynamic programming. He is now at Berkeley.   Has Sargent known Hakansson was the real inventor the entire time?

Published by Harvard University Press in 1987.

http://www.hup.harvard.edu/catalog.php?isbn=9780674218772

Leland O’Brien Rubinstein (LOR) made a fortune pushing portfolio insurance before the Crash of 1987.  Portfolio insurance not only did not work but many claim it helped cause the crash.

LOR Portfolio Insurance

Did Stanley Fischer also use the 1968 Hayne Leland thesis in Fischer’s 1969 MIT thesis?  Robert C. Merton claims he was unaware of the Leland thesis because according to Merton, Leland was a graduate student “at the time”.  But Merton was published in 1969, when Leland was no longer a graduate student.  Is this also to help cover for Stanley Fischer using it in Fischer’s thesis?  Merton and Fischer shared an office at MIT.

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