Clothes for the Emperor or Can Graduate Schools Learn From Undergraduate Macroeconomics?
The current crisis is not only one of financial markets, but also of macroeconomics. Leading scholars call for a paradigm shift away from dynamic general equilibrium models, though some argue that the profession's arsenal already contains the tools and historical lessons needed to deal with such crises. Taking this view to the limit, this note demonstrates that the workhorse models of undergraduate macroeconomics not only permit a refined view and classification of financial crises. These models also identify scenarios under which either policymakers would be ill advised to follow conventional prescriptions, or full-scale depressions loom that cannot be fought by means of fiscal or monetary policy alone.
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- Peter Bofinger & Eric Mayer & Timo Wollmershäuser, 2009.
"Teaching New Keynesian Open Economy Macroeconomics at the Intermediate Level,"
The Journal of Economic Education,
Taylor & Francis Journals, vol. 40(1), pages 80-102, January.
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- Bofinger, Peter & Mayer, Eric & Wollmershäuser, Timo, 2009. "Teaching New Keynesian Open Economy Macroeconomics at the Intermediate Level," Munich Reprints in Economics 20213, University of Munich, Department of Economics.
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- David Romer, 2000. "Keynesian Macroeconomics without the LM Curve," NBER Working Papers 7461, National Bureau of Economic Research, Inc.
- Joseph E Stiglitz, 2009. "The Current Economic Crisis and Lessons for Economic Theory," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 35(3), pages 281-296. Full references (including those not matched with items on IDEAS)
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