J.M. Keynes, Neoclassical Synthesis, New Neoclassical Synthesis and the Crisis: the Current State of Macroeconomic Theory

The aim of this paper is to describe chronologically the evolution of macroeconomic theory since the publication of the General Theory of J. M. Keynes in 1936 until the most recent macroeconomic developments motivated by the global economic crisis of 2008-2009. First, the developments made in the field of closed economies will be described, highlighting the contributions of Keynes and the Keynesians and monetarist’s developments, as well as the consensus reached between these two schools in the neoclassical synthesis in the fifties and the sixties of the last century. Subsequently, the contributions of the New Classical and New Keynesian economics made in the last four decades and the consensus among them —the so-called New Neoclassical Synthesis— will be overviewed. Then, given the decisive importance of the external sector to Latin America economies, a presentation of the progress made in the field of open economy macroeconomics will be conducted, with Mundell, Dornbusch, Krugman, Obstfeld and Rogoff as their leading characters. At the end of the section we discuss the future of Macroeconomic Theory and Policy, given the sharp criticism it has received following the international crisis of 2008-2009.