Neil Wallace

Neil Wallace (born 1939) is an American economist and professor at Pennsylvania State University. Wallace is considered one of the main proponents of new classical macroeconomics.[1]

Neil Wallace
Born1939 (age 7980)
New York City, New York, U.S.
InstitutionPenn State University
University of Miami
University of Minnesota
FieldMonetary economics
School or
New classical economics
Alma materUniversity of Chicago
Columbia University
Milton Friedman
Robert M. Townsend
S. Rao Aiyagari
Randall Wright
Lars Ljungqvist
Per Krusell
InfluencesJohn Muth
Robert Lucas, Jr.
Information at IDEAS / RePEc

He became professor at Penn State in 1997, after holding professorships at the University of Minnesota (1974–1994), and the University of Miami (1994–1997).

Wallace earned his Bachelor of Arts in Economics at Columbia University in 1960, and his Doctor of Philosophy in Economics at the University of Chicago under Milton Friedman in 1964.

Since 1969 Wallace has been a consultant to the Federal Reserve Bank of Minneapolis.

In 2012 he was elected Distinguished Fellow of the American Economic Association.

In 1975 he and Thomas J. Sargent proposed the Policy-ineffectiveness proposition, which refuted a basic assumption of Keynesian economics.

Selected publications

  • Ricardo De O. Cavalcanti and Neil Wallace, 1999. "Inside and Outside Money as Alternative Media of Exchange," Journal of Money, Credit and Banking, 31(3, Part 2), pp. 443–457.
  • Thomas J. Sargent and Neil Wallace, "Rational Expectations and the Dynamics of Hyperinflation," International Economic Review, 14(2), (Jun., 1973), pp. 328–350.
  • _____ and _____, 1973. The Stability of Models of Money and Growth with Perfect Foresight," Econometrica, 41(6), pp. 1043–1048.
  • Sargent, Thomas & Wallace, Neil (1975). "'Rational' Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule". Journal of Political Economy. 83 (2): 241–254. doi:10.1086/260321.
  • Sargent, Thomas & Wallace, Neil (1976). "Rational Expectations and the Theory of Economic Policy" (PDF). Journal of Monetary Economics. 2 (2): 169–183. doi:10.1016/0304-3932(76)90032-5.
  • _____ and _____, 1981. "Some Unpleasant Monetarist Arithmetic," Federal Reserve Bank of Minneapolis Quarterly Review, 5(3), pp. 1–17.
  • Neil Wallace, 1980. The Overlapping Generations Model of Fiat Money," in Models of Monetary Economies, Federal Reserve Bank of Minneapolis, pp. 49–82. Abstract.
  • _____, 2001. "Whither Monetary Economics?," International Economic Review, 42(4), pp. p. 847–869.


  1. Galbács, Peter (2015). The Theory of New Classical Macroeconomics. A Positive Critique. Contributions to Economics. Heidelberg/New York/Dordrecht/London: Springer. doi:10.1007/978-3-319-17578-2. ISBN 978-3-319-17578-2.

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