NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Macroeconomics After Two Decades of Rational Expectations

Bennett T. McCallum

NBER Working Paper No. 4367 (Also Reprint No. r1911)
Issued in May 1993
NBER Program(s):Economic Fluctuations and Growth, Monetary Economics

This expository paper describes major developments during the second decade of rational-expectations macroeconomics, roughly 1982-1991. Topics attracting the most attention from researchers differed from those of 1972-1981, with considerable emphasis being devoted to technical mailers. Here the discussion focuses on four prominent areas: real business cycle analysis, growth theory and its empirical application, issues involving unit roots in macroeconomic time series, and sticky-price models of aggregate supply. The paper concludes by arguing that the current state of knowledge in macroeconomics is not as bad as is often suggested.

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Document Object Identifier (DOI): 10.3386/w4367

Published: Journal of Economic Education, Vol. 25, no. 3, pp. 219-234, (Summer 1994).

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