Macroeconomics - Which Way Now? Old versus New Styles
This paper contrasts the new style of doing macroeconomics, where the emphasis is on propositions rigorously derived from neoclassical micro foundations, with the old style associated with the work of Keynes in particular. The paper argues that the latter type of model, which is based on more realistic albeit informal behavioural micro foundations, is better suited to the concerns of policy makers. However, emphasis on the new style has led to an abandonment of research on adapting the old paradigms to new concerns, with a consequent loss for practical policy making especially with respect to macro stabilization. A perspective on how the new style can and cannot be helpful is provided.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andvig, Jens Christopher, 1988. "From macrodynamics to macroeconomic planning : A basic shift in Ragnar Frisch's thinking?," European Economic Review, Elsevier, vol. 32(2-3), pages 495-502, March.
- Hendry, David F., 2000. "Econometrics: Alchemy or Science?: Essays in Econometric Methodology," OUP Catalogue, Oxford University Press, number 9780198293545, April.
- Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
- Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
- Lars Peter Hansen & James J. Heckman, 1996. "The Empirical Foundations of Calibration," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 87-104, Winter.
- Karl Ove Moene & Asbjorn Rodseth, 1991. "Nobel Laureate: Trygve Haavelmo," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 175-192, Summer.
- Hoover,Kevin D., 2001.
"The Methodology of Empirical Macroeconomics,"
Cambridge University Press, number 9780521802727, December.
- Hoover,Kevin D., 2001. "The Methodology of Empirical Macroeconomics," Cambridge Books, Cambridge University Press, number 9780521003216, November.
- Phelps, Edmund S & Taylor, John B, 1977. "Stabilizing Powers of Monetary Policy under Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 163-190, February.
- Christopher A. Sims, 1996. "Macroeconomics and Methodology," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 105-120, Winter.
- Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
- Matthew Rabin., 1997. "Psychology and Economics," Economics Working Papers 97-251, University of California at Berkeley.
- Rabin, Matthew, 1997. "Psychology and Economics," Department of Economics, Working Paper Series qt8jd5z5j2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
When requesting a correction, please mention this item's handle: RePEc:noj:journl:v:30:y:2004:p:11-26. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Halvor Mehlum)
If references are entirely missing, you can add them using this form.