The Counter-Attack

Michael Carter and Rodney Maddock
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Michael Carter: The Australian National University
Rodney Maddock: The Australian National University

Chapter 5 in Rational Expectations, 1984, pp 103-120 from Palgrave Macmillan

Abstract: Abstract Many of the important advances in economic knowledge arise from confrontations. The Great Depression posed a fundamental challenge to the then prevailing conventional wisdom of the self-equilibrating economy. It refused to go away. Into this environment, Keynes introduced a radically different theoretical perspective, which threatened many cherished notions of the economics profession. His contribution was not greeted with universal acclaim and a counter-attack was mounted with vigour. The theoretical fundamentals of the General Theory were carefully examined and debated. New lines of empirical research were spawned. In response, Keynes and his followers were forced to amend, clarify and adapt the theory. The publication of the General Theory provoked a flurry of activity in macroeconomics, a thorough reassessment of both theory and evidence, and quite novel lines of research. Gradually, out of all this activity there emerged a new consensus founded on a much deeper and more thorough knowledge of macroeconomics.

Keywords: Monetary Policy; Money Supply; Real Interest Rate; Rational Expectation; Natural Rate (search for similar items in EconPapers)
Date: 1984
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-17644-1_5

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DOI: 10.1007/978-1-349-17644-1_5

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