by Guido Tabellini
I first learnt about Axel when I was an undergraduate student in Italy in the late 1970s. His strange surname was easy to remember, but there were much deeper reasons to pay attention to him than just his surname. These were the times of the debate between Monetarists and Keynesians, and Axel’s ideas provided a fresh new perspective. I avidly read his book Keynes and the Keynesians (probably without understanding much of it), and I was thrilled when admitted to UCLA’s PhD program, at the prospect of being his student.
My expectations were not disappointed. Axel was a key mentor and an exceptionally generous supervisor. Besides his classes, he held a regular evening workshop attended by several PhD students. We presented our preliminary work and debated controversial ideas – the more controversial and weirder, the better. The discussion continued in a Chinese restaurant in Westwood, and touched on any topic. These informal but regular interactions were probably some of the most fun and memorable experiences of my years as a graduate student.
Axel’s teaching went way beyond Keynesian economics. He taught me how to write, and insisted that any good idea is wasted unless it is expressed in a clear and convincing way. He encouraged us to learn economic history – something that was neglected at the time by our profession. He pushed us to explore new problems, neglected by others. If you see a lot of bright people working on an important problem with a particular approach, he used to say, don’t join the crowd. Chances are that someone brighter or luckier than you will get there first. Instead, he insisted, seek new and unexplored paths, and don’t get lost in the technical details.
Although he refrained from using mathematics, Axel was a theorist at heart, and went after the big theoretical issues in macroeconomics. Without being constrained by the straight-jacket of formal modeling, he could discuss fundamental problems from new perspectives, and this was of immense value to his students. Many of his ideas withstood the test of time and are now active areas of research. His notion of monetary regimes emphasized the importance of central banking institutions and the interaction between monetary and fiscal policy. He realized that expectations of future policy have to be consistent with policymakers’ incentives, which in turn are shaped by institutions. Although he mostly focused on monetary institutions, often with a historical perspective, his ideas induced many of his students, myself included, to study institutions as fundamental drivers of policy choices and of economic behavior. He was also a fierce critic of the emerging notion of rational expectations, and insisted that the study of belief formation was fundamental but much less simple than assumed in most macroeconomic models. In this too he was ahead of his time, although here he did not outline an alternative approach.
Besides sharing many deep and long-lasting insights with his students and colleagues, Axel was also a great example as a human being. His wit, generosity and empathy for the people around him made him one of the most popular PhD supervisors. And when I joined UCLA’s department of economics as a young assistant professor, his engaging and fun personality made Axel one of the more trusted senior colleagues. We became close friends and we remained in contact over the years. I will miss him dearly.