Three Revolutions in Macroeconomics: Their Nature and Influence
AbstractHarry Johnson’s 1971 ideas about the factors affecting the success of the Keynesian Revolution and the Monetarist Counter-revolution are summarised and extended to the analysis of the Rational Expectations - New Classical (RE-NC) Revolution. It is then argued that, whereas Monetarism brought about a revival of the quantity theory of money from the limbo into which Keynesianism had pushed it, RE-NC modelling was responsible for that theory’s most recent disappearance. This happened despite the fact that, initially, RE-NC economics appeared to be a mainly technical extension and refinement of Monetarism, rather than a radically new economic doctrine. Some implications of this story for todays’ macroeconomics are briefly discussed.
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Bibliographic InfoPaper provided by University of Western Ontario, Economic Policy Research Institute in its series University of Western Ontario, Economic Policy Research Institute Working Papers with number 20134.
Date of creation: 2013
Date of revision:
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Postal: Economic Policy Research Institute, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2
Phone: 519-661-2111 Ext.85244
Web page: http://economics.uwo.ca/research/research_papers/epri_workingpapers.html
Keynesianism; Monetarism; Rational expectations New Classical economics Quantity Theory; Money; Velocity; Monetary policy; Inflation; Unemployment; Business cycle; Phillips curve;
Find related papers by JEL classification:
- B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-20 (All new papers)
- NEP-HIS-2013-07-20 (Business, Economic & Financial History)
- NEP-HPE-2013-07-20 (History & Philosophy of Economics)
- NEP-MAC-2013-07-20 (Macroeconomics)
- NEP-MON-2013-07-20 (Monetary Economics)
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- Craig Freedman & Geoff C. Harcourt & Peter Kriesler & John Nevilet, 2013. "Milton Friedman: Constructing an Anti-Keynes," Discussion Papers 2013-35, School of Economics, The University of New South Wales.
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