Barro, Grossman, and the domination of equilibrium macroeconomics

Romain Plassard

MPRA Paper from University Library of Munich, Germany

Abstract: Under which conditions did Robert Lucas’s microfoundational program come to dominate the field? My article sheds new light on this question. The focus is on why models incorporating rational expectations and market-clearing seduced macroeconomists. My case study is Robert Barro and Herschel Grossman. Drawing on Grossman’s archives, I define a framework for explaining their modeling choices. I show that methodological principles, tractability constraints, and research strategies explained why, at the end of the 1970s, Barro and Grossman preferred equilibrium over disequilibrium macroeconomics.

Keywords: fluctuations; non-neutrality of money; fixed-price equilibrium models; contract theory; disequilibrium macroeconomics; equilibrium macroeconomics (search for similar items in EconPapers)
JEL-codes: B21 B22 B23 E10 E32 (search for similar items in EconPapers)
Date: 2021-04-15
New Economics Papers: this item is included in nep-cta, nep-cwa, nep-his, nep-hpe and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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