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A History of Macroeconomics from Keynes to Lucas and Beyond

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  • Date Published: January 2016
  • availability: Available
  • format: Paperback
  • isbn: 9781107584945
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About the Authors
  • This book retraces the history of macroeconomics from Keynes's General Theory to the present. Central to it is the contrast between a Keynesian era and a Lucasian – or dynamic stochastic general equilibrium (DSGE) – era, each ruled by distinct methodological standards. In the Keynesian era, the book studies the following theories: Keynesian macroeconomics, monetarism, disequilibrium macro (Patinkin, Leijongufvud, and Clower) non-Walrasian equilibrium models, and first-generation new Keynesian models. Three stages are identified in the DSGE era: new classical macro (Lucas), RBC modelling, and second-generation new Keynesian modeling. The book also examines a few selected works aimed at presenting alternatives to Lucasian macro. While not eschewing analytical content, Michel De Vroey focuses on substantive assessments, and the models studied are presented in a pedagogical and vivid yet critical way.

    • Retraces the history of macroeconomics from Keynes's General Theory to the present
    • Examines a few selected works aiming at presenting alternatives to Lucasian macro
    • Studies the following theories: Keynesian macroeconomics, monetarism, disequilibrium macro (Patinkin, Leijonhufvud and Clower) non-Walrasian equilibrium models, and first-generation new Keynesian models
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    Reviews & endorsements

    "Michel De Vroey does not simply record what he finds. He has a vision of the kind of macroeconomics he would like to see, perhaps one he developed gradually over the years he has worked on this book. What makes this book enjoyable is that he has high hopes for economics, he flatters us that we are important, and he praises the progress we have achieved. In the end he has the integrity not to hide his disappointments, his conviction that while there is no turning back, there is still a long way to go."
    Robert E. Lucas, Jr, John Dewey Distinguished Service Professor in Economics, University of Chicago

    "No branch of economics has witnessed as many revolutions and counter-revolutions as macroeconomics, starting from Keynes' General Theory eighty years ago. Michel De Vroey's book provides a thorough but highly readable account of the main developments in the field over that period. It conveys a sense of the excitement generated by the advent of every new paradigm, as well as of the growing tension between the requirements of theoretical purity and those of empirical and policy relevance that macroeconomists keep facing these days."
    Jordi Galí, Research Centre for International Economics (CREI), Universitat Pompeu Fabra and Barcelona Graduate School of Economics

    "Macroeconomics research has largely proceeded through 'revolutions'. One wishes for a more linear and evolutionary process, one where most new contributions would naturally fit and the common core become steadily stronger. But the immense complexity of modern economies, the difficult methodological choices, may be such that 'revolutions' will keep happening, with their share of destruction, confusion, and eventual reconstruction. Understanding the nature of these revolutions is essential to understanding where we are today, and Michel De Vroey's book does a masterful job of doing just that. A thoroughly illuminating and enjoying read."
    Olivier J. Blanchard, Robert M. Solow Professor of Economics, Massachusetts Institute of Technology

    "Macroeconomics is a complex evolving system of thinking. Michel De Vroey's latest book dives into that evolving complexity and, by distinguishing between Marshallian and Walrasian macroeconomics, helps make the history of macroeconomics a bit more understandable. It's sad that more economists don't make that distinction."
    David Colander, Distinguished College Professor, Middlebury College

    "De Vroey's book reads like a travelogue recounting his life journey as a macroeconomist, and his considered response to key texts he encountered along the way. Always thoughtful and penetrating, he stimulates this reader to reflect anew on how we got to where we are today, and what might lie ahead."
    Perry Mehrling,

    'Michel De Vroey’s interpretation of the history of macroeconomics through analysis of the most important macro models built and developed in the last decades, from Keynes’s General Theory to the present days, is presented here.' Danilo Freitas Ramalho da Silva, The European Journal of the History of Economic Thought

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    Customer reviews

    29th Jun 2016 by Pgalbacs

    This new work of his is directed at guiding us through the history of modern macroeconomics from its birth, i.e. from the time when Keynes’ General theory was published, to our present. This period covers 70-80 years. According to the author, the history of modern macroeconomics has been established by two breaches. One of them was the transition from the General theory to Keynesian economics, while the other one often referred to as the Lucasian revolution throughout the book was the break between Keynesian theory and new classical macroeconomics. The importance of the label “Lucasian revolution” will only be revealed in the second half of the book, where Prof. De Vroey definitely interprets the RBC-theory of Kydland and Prescott domineering in the 1980s and the second generation of the new Keynesian modelling as the after-effect and continuation of new classical macroeconomics and DSGE-methodology set off by Lucas. So, in De Vroey’s hands, the history of modern macroeconomics becomes a history giving account of the changes and distortions of the theory of Keynes on one hand, and a history of the attacks coming from various directions against the Keynesian theory on the other hand. De Vroey’s book gives us a detailed description of the sophisticated evolution of modern macroeconomics, but a reader must have considerable previous knowledge in order to explore the genuine merits of this outstanding work. The author carries out his analyses and comments on most of the theories assuming them to be previously known, since this is the only way how we can appreciate the refinement and the unique emphases of his own interpretations. It is undoubted that Prof. De Vroey’s book will be a standard textbook in the forthcoming years or even for decades – a textbook not only for the history of economic thought but also for methodology. Having read this outstanding work an idea has entered my mind: to put it simply, De Vroey knows everything. Although he would definitely refuse a judgement like this, we can be certain of his having read everything that is worth reading as to the problem under study. The book is closed by a tremendous bibliography that almost makes the book of source value. Even if we are not willing to accept all his arguments and statements, even if we do not agree with him in every aspect of his notions, his work will definitely be a must for professionals, students and researchers interested in the history, the theories and the methodology of modern macroeconomics.

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    Product details

    • Date Published: January 2016
    • format: Paperback
    • isbn: 9781107584945
    • length: 446 pages
    • dimensions: 228 x 152 x 25 mm
    • weight: 0.64kg
    • contains: 35 b/w illus.
    • availability: Available
  • Table of Contents

    Part I. Keynes and Keynesian Macroeconomics:
    1. Keynes's General Theory
    2. Keynesian macroeconomics
    3. The neoclassical synthesis program: Klein and Patinkin
    4. Monetarism
    5. Phelps and Friedman: the natural rate of unemployment
    6. Leijonhufvud and Clower
    7. Non-Walrasian equilibrium models
    8. Assessment
    Part II. DSGE Macroeconomics:
    9. Lucas and the emergence of DSGE macroeconomics
    10. A methodological breach
    11. Assessing Lucas
    12. Early reactions to Lucas
    13. Reacting to Lucas: first generation new Keynesians
    14. Reacting to Lucas: alternative research lines
    15. Real business cycle modeling: Kydland and Prescott's contribution
    16. Real business cycle modeling: critical reactions and further developments
    17. Real business cycle modeling: assessment
    18. Second generation new Keynesian modeling
    Part III. A Broader Perspective:
    19. The history of macroeconomics against the Marshall–Walras divide
    20. Standing up to DSGE macroeconomics
    21. Looking back, looking ahead.

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    A History of Macroeconomics from Keynes to Lucas and Beyond

    Michel De Vroey

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  • Author

    Michel De Vroey, Université Catholique de Louvain, Belgium
    Michel De Vroey is a Professor Emeritus at the University of Louvain and visiting professor at the Université Saint Louis, Brussels. He has published several books, including Involuntary Unemployment: The Elusive Quest for a Theory (2007) and Keynes, Lucas: D'une macroéconomie à l'autre (2009). He has also published extensively in scholarly journals.

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