This book retraces the history of macroeconomics from Keynes's General Theory to the present. Central to it is the contrast between a Keynesian era and a Lucasian - or dynamic stochastic general equilibrium (DSGE) - era, each ruled by distinct methodological standards. In the Keynesian era, the book studies the following theories: Keynesian macroeconomics, monetarism, disequilibrium macroeconomics (Patinkin, Leijongufvud and Clower), non-Walrasian equilibrium models, and first-generation new Keynesian models. Three stages are identified in the DSGE era: new classical macroeconomics (Lucas), RBC modelling, and second-generation new Keynesian modeling. The book also examines a few selected works aimed at presenting alternatives to Lucasian macroeconomics. While not eschewing analytical content, Michel De Vroey focuses on substantive assessments, and the models studied are presented in a pedagogical and vivid yet critical way.
Author(s): Michel De Vroey
Year: 2016
Language: English
Pages: 427
Introduction
Part I. Keynes and Keynesian Macroeconomics:
1. Keynes's General Theory
2. Keynesian macroeconomics
3. The neoclassical synthesis program: Klein and Patinkin
4. Monetarism
5. Phelps and Friedman: the natural rate of unemployment
6. Leijonhufvud and Clower
7. Non-Walrasian equilibrium models
8. Assessment
Part II. DSGE Macroeconomics:
9. Lucas and the emergence of DSGE macroeconomics
10. A methodological breach
11. Assessing Lucas
12. Early reactions to Lucas
13. Reacting to Lucas: first generation new Keynesians
14. Reacting to Lucas: alternative research lines
15. Real business cycle modeling: Kydland and Prescott's contribution
16. Real business cycle modeling: critical reactions and further developments
17. Real business cycle modeling: assessment
18. Second generation new Keynesian modeling
Part III. A Broader Perspective:
19. The history of macroeconomics against the Marshall–Walras divide
20. Standing up to DSGE macroeconomics
21. Looking back, looking ahead.
