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The end of the consensus ? The economic crisis and the crisis of macroeconomics

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  • Francesco Saraceno

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

The New Consensus that has dominated macroeconomics since the 1980s was based on a fundamentally neoclassical structure: efficient markets that on their own converged on a natural equilibrium with a very limited role for macroeconomic (mostly monetary) policy to smooth fluctuations. The crisis shattered this consensus and saw the return of monetary and fiscal activism, at least in academic debate. The profession is reconsidering the pillars of the Consensus, from the size of the multipliers to the implementation of reform, including the links between business cycles and trends. It is still too soon to know what macroeconomics will look like tomorrow, but hopefully it will be more eclectic and open.

Suggested Citation

  • Francesco Saraceno, 2018. "The end of the consensus ? The economic crisis and the crisis of macroeconomics," SciencePo Working papers Main hal-03443466, HAL.
    • Handle: RePEc:hal:spmain:hal-03443466
    DOI: 10.3917/reof.157.0319
    Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03443466
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    References listed on IDEAS

    as
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