The Dismal State of Macroeconomics and the Opportunity for a New Beginning

摘要

What passed for macroeconomics on the verge of the global financial collapse had nothing to do with reality. As a result, the ensuing crisis exploded the reigning orthodoxy--rational expectations and continuous market clearing, New Classical and real business cycle approaches, neutral money, the New Monetary Consensus, the Taylor rule, the Great Moderation, the efficient markets hypothesis, Ricardian equivalence and other versions of the policy irrelevance doctrine, and claims made by advocates of deregulation and self-regulation. None of these ideas should be taught in any serious economics course, says Senior Scholar L. Randall Wray. It is time to throw out neoclassical theory and update John Maynard Keynes's theory so that it is relevant to the world we now live in.