What can civil society expect from academic macroeconomics?

Michel De Vroey

No 2013022, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: Academic macroeconomics as it has been practiced for the last three decades has a bad reputation, especially after the onset of the 2008 recession. The aim of this paper is to reflect on this state of affairs. To begin, I draw a comparison between Keynesian and Lucasian macroeconomics, bringing to light that they are based on different tenets. Next, I claim that because of its higher internal consistency, Lucasian macroeconomics is superior to Keynesian. However, I also claim that espousing it bears a heavy price — in particular a limited usefulness for policymaking and an inability to come to grips with economic crises.

Keywords: Keynesian macroeconomics; Lucas; Real Business Cycle models (search for similar items in EconPapers)
JEL-codes: B22 E12 E13 (search for similar items in EconPapers)
Pages: 20
Date: 2013-05-31
New Economics Papers: this item is included in nep-dge, nep-hpe and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2013022

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