The innovation to the monetary base being identified here, therefore, creates responses that are consistent with what macroeconomic theory
predicts will happen in response to an exogenous change in monetary policy.
It is the achievement of New Keynesian macroeconomic theory
and the great moderation to understand that this is the job of monetary policy.
The crisis has not reached its peak yet, and that is why we still cannot talk about a new macroeconomic theory
developed for its solving.
Say's Law and the Keynesian Revolution: How Macroeconomic Theory
Lost its Way.
First, our coverage of macroeconomic theory
is typically based on microeconomic foundations.
The decline in political contents of monetary policy decisions probably reflects, among other factors, both the post-1970s neo-Keynesian consensus in macroeconomic theory
and the realization of political independence of the Federal Reserve System during the Volcker-Greenspan years.
Over the years, significant developments in macroeconomic theory
(not to mention computing technology) have seen a major evolution in the nature of models used at the Bank.
Although the author scores some valid points in suggesting different emphases for economists, much of the criticism falls flat, suggesting lacunae in his understanding of some of the concepts and logic of macroeconomic theory
This case would be appropriate for a money and banking class, a monetary economics class, a financial economics class, an intermediate or an advance macroeconomic theory
What made macroeconomic theory
Keynesian was its admission that when the price mechanism was aggregated to the economy as a whole, the quantity of goods and services supplied did not necessarily equilibrate with the quantity demanded.
The role of expectations about policy became a central feature of macroeconomic theory
in the 1970s.
The awareness creation effort was initially based on conceptual developments in the macroeconomic theory
of growth ("endogenous growth models"), and subsequently on the empirical process of documenting the magnitude and impact of intangibles.