Karl Brunner, Scholar: An Appreciation

This paper discusses the contributions of Karl Brunner and the enormous influence of his insights and analysis. It considers his work on economic policy--and monetary policy in particular--as well as his ideas for broadening the utility maximizing hypothesis of textbooks by describing how individuals search and grope as they confront incomplete information and uncertainty. It shows how, early on, he highlighted information, institutions and uncertainty as well as the importance of microanalysis in macroeconomics. Karl Brunner explained that nominal monetary impulses changed real variables by changing the relative price of assets to output prices. And he concluded that economic fluctuations occurred because of an unstable public sector—especially the monetary sector—that disturbs a more stable private sector, a policy lesson forgotten or never learned by many central banks.