What’s Right with Macroeconomics?
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What’s Right with Macroeconomics?

Edited by Robert M. Solow and Jean-Philippe Touffut

Global crises are very rare events. After the Great Depression and the Great Stagflation, new macroeconomic paradigms associated with a new policy regime emerged. This book addresses how some macroeconomic ideas have failed, and examines which theories researchers should preserve and develop. It questions how the field of economics – still reeling from the global financial crisis initiated in the summer of 2007 – will respond.
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Chapter 8: Round table discussion: where is macro going?

Wendy Carlin, Robert J. Gordon and Robert M. Solow


Robert M. Solow (MIT) A round table about the current state or the future of macroeconomics should not start from the opposition of good and bad models. Even the simplest fundamentalist dynamic stochastic general equilibrium (DSGE) models contain a certain amount of ordinary common-sense economics that no one would be against in principle. In response to criticism, the naive versions of that kind of model have been fixed up with some financial intermediation, with sticky prices, with what are now called ‘rule-of-thumb’ consumers. It is better not to try to take positions for or against the whole school of modelling, which has good things and bad things about it, but to try to be careful about what characteristics of that modelling style one likes or doesn’t like.

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