This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Perspectives
  4. Fall 2019
  5. What They Were Thinking Then: The Consequences for Macroeconomics during the Past 60 Years

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

What They Were Thinking Then: The Consequences for Macroeconomics during the Past 60 Years

  • George A. Akerlof
Journal of Economic Perspectives
vol. 33, no. 4, Fall 2019
(pp. 171–86)
Download Full Text PDF
(Complimentary)

Abstract

This article explores the development of Keynesian macroeconomics in its early years, and especially in the Big Bang period immediately after the publication of The General Theory. In this period, as standard macroeconomics evolved into the "Keynesian-neoclassical synthesis," its promoters discarded many of the insights of The General Theory. The paradigm that was adopted had some advantages. But its simplifications have had serious consequences—including immense regulatory inertia in response to massive changes in the financial system and unnecessarily narrow application of accelerationist considerations (regarding inflation expectations).

Citation

Akerlof, George A. 2019. "What They Were Thinking Then: The Consequences for Macroeconomics during the Past 60 Years." Journal of Economic Perspectives, 33 (4): 171–86. DOI: 10.1257/jep.33.4.171

Additional Materials

JEL Classification

  • B22 History of Economic Thought: Macroeconomics
  • E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
  • E31 Price Level; Inflation; Deflation
  • E44 Financial Markets and the Macroeconomy
  • L51 Economics of Regulation
There are no comments for this article.
Login to Comment