Three Revolutions in Macroeconomics: Their Nature and Influence
David Laidler ()
No 20134, University of Western Ontario, Economic Policy Research Institute Working Papers from University of Western Ontario, Economic Policy Research Institute
Harry Johnson’s 1971 ideas about the factors affecting the success of the Keynesian Revolution and the Monetarist Counter-revolution are summarised and extended to the analysis of the Rational Expectations - New Classical (RE-NC) Revolution. It is then argued that, whereas Monetarism brought about a revival of the quantity theory of money from the limbo into which Keynesianism had pushed it, RE-NC modelling was responsible for that theory’s most recent disappearance. This happened despite the fact that, initially, RE-NC economics appeared to be a mainly technical extension and refinement of Monetarism, rather than a radically new economic doctrine. Some implications of this story for todays’ macroeconomics are briefly discussed.
Keywords: Keynesianism, Monetarism, Rational expectations New Classical economics Quantity Theory; Money; Velocity; Monetary policy; Inflation; Unemployment; Business cycle; Phillips curve (search for similar items in EconPapers)
JEL-codes: B21 E31 E41 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his, nep-hpe, nep-mac and nep-mon
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Journal Article: Three revolutions in macroeconomics: their nature and influence (2015)
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