The State of Macro
For a long while after the explosion of macroeconomics in the 1970s, the field looked like a battlefield. Over time however, largely because facts do not go away, a largely shared vision both of fluctuations and of methodology has emerged. Not everything is fine. Like all revolutions, this one has come with the destruction of some knowledge, and suffers from extremism and herding. None of this deadly however. The state of macro is good.
The first section sets the stage with a brief review of the past. The second argues that there has been broad convergence in vision, and the third reviews the specifics. The fourth focuses on convergence in methodology. The last looks at current challenges.
Prepared for the "Annual Review of Economics". Thanks to Daron Acemoglu (one of the editors), Ricardo Caballero, V.V. Chari, Laura Feiveson, Ben Friedman, Jordi Gali, Anil Kashyap, Jaewoo Lee, N.Greg Mankiw, Marianna Riggi, Julio Rotemberg, Robert Shimer, Andrei Shleifer, and Harald Uhlig for their very useful comments. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Olivier Blanchard, 2009. "The State of Macro," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 209-228, 05. citation courtesy of