Considerations on the State of the Debate in Macroeconomic Theory

Authors

  • Francisco Rosende Gerencia de Estudios Banco Central de Chile image/svg+xml

Keywords:

macroeconomic theory, rational expectations, macroeconomic debate, economic policy, monetarism, Keynesianism

Abstract

This paper tries to present the central issues around the macroeconomic debate, emphasizing the prominent role played today by the rational expectations school. The main propositions out of this school are explained, as well as the critiques advanced by its opponents.

Downloads

Download data is not yet available.

References

Alchian, A. (1971). Information, costs, pricing and resource allocation. In E. Phelps (Ed.), Microeconomic foundations of employment and inflation theory.

Azariadis, C. (1975). Implicit contracts and underemployment equilibria. Journal of Political Economy, 83(6), 1183–1202. https://doi.org/10.1086/260388

Bailey, M. (1962). National income and the price level. McGraw-Hill.

Barro, R. (1976). Rational expectations and the role of monetary policy. Journal of Monetary Economics, 2(1), 1–32.

Barro, R. (1978). Unanticipated money, output, and the price level in the United States. Journal of Political Economy, 86(4), 549–580.

Barro, R. (1981a). The equilibrium approach to business cycles. In R. Barro, Money, expectations and business cycles: Essays in macroeconomics. Academic Press.

Barro, R. (1981b). Unanticipated money growth and economic activity in the United States. In R. Barro, Money, expectations and business cycles: Essays in macroeconomics. Academic Press.

Barro, R. (1984a). Macroeconomics. John Wiley & Sons.

Barro, R. (1984b). Rational expectations and macroeconomics in 1984. American Economic Review, 74(2), 179–182.

Barro, R., & Fischer, S. (1976). Recent developments in monetary theory. Journal of Monetary Economics, 2(2), 133–167. https://doi.org/10.1016/0304-3932(76)90031-3

Barro, R., & Grossman, H. (1971). A general disequilibrium model of income and employment. American Economic Review, 61(1), 82–93.

Begg, D. K. (1982). The rational expectations revolution in macroeconomics: Theories and evidence. Johns Hopkins University Press.

Bernanke, B. (1983). Nonmonetary effects of the financial crisis in the propagation of the Great Depression. American Economic Review, 73(3), 257–276.

Brunner, K., & Meltzer, A. (1971). The uses of money: Money in the theory of an exchange economy. American Economic Review, 61(5), 784–805.

Cass, D., & Yaari, M. (1966). A re-examination of the pure consumption loans model. Journal of Political Economy, 74(4), 353–367. https://doi.org/10.1086/259178

De la Cuadra, S., & Cortés, H. (1983). Análisis de las políticas macroeconómicas aplicadas en Chile en el período 1925-1982. Instituto de Economía, Universidad Católica de Chile.

Fernández, R. (1983, junio). La crisis financiera argentina 1980-1982. Desarrollo Económico.

Fischer, S. (1977). Long-term contracts, rational expectations, and the optimal money supply rule. Journal of Political Economy, 85(1), 191–205. https://doi.org/10.1086/260551

Fischer, S. (Ed.). (1980). Rational expectations and economic policy. National Bureau of Economic Research.

Fisher, I. (1933). The debt-deflation theory of great depressions. Econometrica, 1(4), 337–357. https://doi.org/10.2307/1907327

Friedman, M. (1968). The role of monetary policy. American Economic Review, 58(1), 1–17.

Friedman, M. (1969). Money and business cycles. In The optimum quantity of money and other essays. Aldine.

Friedman, M. (1970). A theoretical framework for monetary analysis. Journal of Political Economy, 78(2), 193–238. https://doi.org/10.1086/259720

Friedman, M., & Schwartz, A. (1963). A monetary history of the United States, 1867-1960. Princeton University Press.

Friedman, M., & Schwartz, A. (1982). Monetary trends in the United States and the United Kingdom: Their relation to income, prices, and interest rates, 1867-1975. National Bureau of Economic Research. https://doi.org/10.7208/chicago/9780226264257.001.0001

Gale, D. (1982). Money in equilibrium. Cambridge University Press.

Grossman, H. (1980). Rational expectations, business cycles, and government behavior. In S. Fischer (Ed.), Rational expectations and economic policy. National Bureau of Economic Research.

Haberler, G. (1980). Critical notes on rational expectations. Journal of Money, Credit and Banking, 12(4), 833–836.

Hart, A. (1935). The Chicago plan for banking reform. Review of Economic Studies, 2(2), 104–116.

Hayek, F. (1939). Price expectations, monetary disturbances and malinvestments. In Profits, interest and investment.

Hicks, J. R. (1939). Value and capital. Clarendon Press.

Hicks, J. R. (1970). Ensayos críticos en teoría monetaria. Ariel.

Hoover, K. (1984). Two types of monetarism. Journal of Economic Literature, 22(1), 58–76.

Keynes, J. M. (1936). The general theory of employment, interest and money. Macmillan.

King, R., & Plosser, C. (1984). Money, credit, and prices in a real business cycle. American Economic Review, 74(3), 363–380.

Klamer, A. (1984). The new classical macroeconomics. Wheatsheaf Books.

Klein, L., & Goldberger, A. (1955). An econometric model of the United States, 1929-1952. North-Holland.

Kydland, F., & Prescott, E. (1980). Time to build and aggregate fluctuations [Mimeo].

Lipsey, R. (1960). The relation between unemployment and the rate of change of money wage rates in the United Kingdom, 1862-1957: A further analysis. Economica, 27(105), 1–31. https://doi.org/10.2307/2551424

Long, J., & Plosser, C. (1983). Real business cycles. Journal of Political Economy, 91(1), 39–69. https://doi.org/10.1086/261128

Lucas, R. (1972). Expectations and the neutrality of money. Journal of Economic Theory, 4(2), 103–124. https://doi.org/10.1016/0022-0531(72)90142-1

Lucas, R. (1977). Understanding business cycles. In Studies in business-cycle theory. MIT Press.

Lucas, R. (1980). Methods and problems in business cycle theory. Journal of Money, Credit and Banking, 12(4), 696–715.

Lucas, R. (1981a). Rules, discretion, and the role of the economic advisor. In Studies in business-cycle theory. MIT Press.

Lucas, R. (1981b). Tobin and monetarism: A review article. Journal of Economic Literature, 19(2), 558–567.

Lucas, R., & Sargent, T. (1981). After Keynesian macroeconomics. In Rational expectations and econometric practice. University of Minnesota Press.

Muth, J. (1961). Rational expectations and the theory of price movements. Econometrica, 29(3), 315–335. https://doi.org/10.2307/1909635

Okun, A. (1980). Rational-expectations-with-misperceptions as a theory of the business cycle. Journal of Money, Credit and Banking, 12(4), 817–825.

Patinkin, D. (1981). Essays on and in the Chicago tradition. Duke University Press.

Phelps, E. (1967). Phillips curves, expectations of inflation and optimal unemployment over time. Economica, 34(135), 254–281. https://doi.org/10.2307/2552025

Phelps, E. (1971). Introduction. In E. Phelps (Ed.), Microeconomic foundations of employment and inflation theory.

Phillips, A. (1958). The relation between unemployment and the rate of change of money wage rates in the United Kingdom, 1861-1957. Economica, 25(100), 283–299. https://doi.org/10.2307/2550759

Rosende, F. (1985). Institucionalidad financiera y estabilidad económica [Mimeo].

Samuelson, P. (1958). An exact consumption-loan model of interest with or without the social contrivance of money. Journal of Political Economy, 66(6), 467–482. https://doi.org/10.1086/258100

Sargent, T. (1976). A classical macroeconometric model for the United States. Journal of Political Economy, 84(2), 207–237. https://doi.org/10.1086/260429

Sargent, T. (1979). Macroeconomic theory. Academic Press.

Sargent, T. (1982). Beyond demand and supply curves in macroeconomics. American Economic Review, 72(2), 382–389.

Sargent, T., & Wallace, N. (1975). «Rational» expectations, the optimal monetary instrument, and the optimal money supply rule. Journal of Political Economy, 83(2), 241–254. https://doi.org/10.1086/260321

Simons, H. (1948). Rules versus authorities in monetary policy. In Economic policy for a free society. University of Chicago Press.

Slutsky, E. (1937). The summation of random causes as the source of cyclic processes. Econometrica, 5(2), 105–146.

Stigler, G. (1961). The economics of information. Journal of Political Economy, 69(3), 213–225. https://doi.org/10.1086/258464

Taylor, J. (1979). Estimation and control of a macroeconomic model with rational expectations. Econometrica, 47(5), 1267–1286. https://doi.org/10.2307/1911962

Taylor, J. (1980). Recent developments in the theory of stabilization policy. Center for the Study of American Business.

Tobin, J. (1972). Inflation and unemployment. American Economic Review, 62(1), 1–18.

Tobin, J. (1980a). Are new classical models plausible enough to guide policy? Journal of Money, Credit and Banking, 12(4), 788–799.

Tobin, J. (1980b). Asset accumulation and economic activity: Reflections on contemporary macroeconomic theory. University of Chicago Press.

Weiss, L. (1980). The role for active monetary policy in a rational expectations model. Journal of Political Economy, 88(2), 221–233. https://doi.org/10.1086/260863

Woglom, G. (1979). Rational expectations and monetary policy in a simple macroeconomic model. Quarterly Journal of Economics, 93(1), 91–105. https://doi.org/10.2307/1882600

Zarnowitz, V. (1984). Recent work on business cycles in historical perspective: A review of theories and evidence (NBER Working Paper N.º 1503). National Bureau of Economic Research.

Published

1986-04-30

How to Cite

Rosende, F. (1986). Considerations on the State of the Debate in Macroeconomic Theory. Economic Analysis Review, 1(1), 89–107. Retrieved from https://www.rae-ear.org/index.php/rae/article/view/311

Issue

Section

Articles

Article usage

ViewsTimes this article's page was opened since the journal started recording statistics. One person can visit more than once.
115
DownloadsTimes the full text of this article (usually the PDF) was opened or downloaded.
340

All time, as recorded by the journal.

Last 2 years: 52 views, 278 downloads.

2.96 downloads per view (journal average 1.65).Downloads of the full text for every abstract view of this article, compared with the whole journal.

Explore the journal's metrics

Most read articles by the same author(s)