Macroeconomics [antikvár]

Preface Many exciting—some say revolutionary—research developments occurred in macroeconomics in the 1970s and 1980s. Their influence is everywhere apparent in the discipline. In this book we have tried to capture the spirit and content of these developments, in a form that is manageable in the intermediate-level college course. Many of the new ideas in macroeconomics draw upon "rational expectations" research. Originally this term referred to a microeconomic model of expectations, much needed for macroeconomic theory, and we use it in this sense. As such, its influence permeates the book. Each of the chapters on consumption, investment, foreign trade, and money has the theory of rational expectations intrinsic to its discussion. So do the chapters on the new classical theories, forward-looking price setting, and policy rules. Our own view is that there is much that is worth retaining of traditional macroeconomics—both Keynesian and monetarist—even as we change the old models and incorporate the new ideas. But this is not a view shared by all. An extreme view of rational expectations, sometimes identified with Robert Lucas of the University of Chicago and Thomas Sargent of the University of Minnesota, rejects Keynesianism and monetarism. Lucas, for instance, has said, "Keynesianism doesn't lead anywhere. It is a dead end." And Sargent has said, "Keynesianism and monetarism? They're both gone. They're dead.'" We disagree, but readers will have to make their own judgments, and we believe we have provided them with the theory and facts to do so. At the least we hope we can share some of our enthusiasm for the research that underlies our own position. ^Forbes Magazine, December 17, 1984, p. 150.