TY  - JOUR
AU  - Kehoe,Patrick
AU  - Chari,Varadarajan V.
TI  - Modern Macroeconomics in Practice: How Theory is Shaping Policy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12476
PY  - 2006
Y2  - August 2006
UR  - http://www.nber.org/papers/w12476
L1  - http://www.nber.org/papers/w12476.pdf
N1  - Author contact info:
Patrick Kehoe
Research Department
Federal Reserve Bank of Minneapolis
90 Hennepin Avenue
Minneapolis, MN  55480-0291
Tel: 612/204-5525
Fax: 612/204-5515
E-Mail: pkehoe@res.mpls.frb.fed.us

Varadarajan V. Chari
Department of Economics
University of Minnesota
1035 Heller Hall
271 - 19th Avenue South
Minneapolis, MN 55455
Tel: 612/626-5171
Fax: (612) 624-0209
E-Mail: varadarajanvchari@gmail.com
AB  - Theoretical advances in macroeconomics made in the last three decades have had a major influence on macroeconomic policy analysis. Moreover, over the last several decades, the United States and other countries have undertaken a variety of policy changes that are precisely what macroeconomic theory of the last 30 years suggests. The three key developments that have shaped macroeconomic policy analysis are the Lucas critique of policy evaluation due to Robert Lucas, the time inconsistency critique of discre-tionary policy due to Finn Kydland and Edward Prescott, and the development of quantitative dynamic stochastic general equilibrium models following Finn Kydland and Edward Prescott.
ER  -