A statistical definition of the natural unemployment rate hypothesis is advanced and tested. A particular illustrative structural macroeconomic model satisfying the definition is set forth and estimated. The model has "classical" policy implications, implying a number of neutrality propositions asserting the invariance of the conditional means of real variables with respect to the feedback rule for the money supply. The aim is to test how emphatically the data reject a model incorporating rather severe classical hypotheses.

This paper examines those factors which caused Pareto to change his philosophical views with age and the effect of these changes on the man and his work. The approach is essentially biographical. Finally, the present state of economics is viewed in the context of the historical background of the paper in order to provide a perspective often lacking among economists because of their preoccupation with the present.

This paper examines those factors which caused Pareto to change his philosophical views with age and the effect of these changes on the man and his work. The approach is essentially biographical. Finally, the present state of economics is viewed in the context of the historical background of the paper in order to provide a perspective often lacking among economists because of their preoccupation with the present.

The criterion employed to judge successes and failures has been the acceptance or nonacceptance of Smith's theory by his immediate successors. This judgement has been supplemented with a more personal one of scientific fruitfulness. He had one overwhelming and proper success--the theorem on resource allocation under competition--and several minor successes. He also had one modest success that was improper (i.e., unfortunate)--the distinction between productive and unproductive labor. Smith's most important analytical failure was the hierarchy of employments of capital. Three failures that should have been successes receive special attention: his wage theory, his rent theory, and the analysis of the division of labor. The reasons for the differing fates of these theories are examined.