Macroeconomic Confusion

Schlicht, Ekkehart (February 2006): Macroeconomic Confusion. A Marshallian Perspective. Discussion Papers in Economics 2006-6

Abstract

This note critically evaluates the New Classical Macroeconomics from a Marshallian perspective. Revisiting the famous Keynes-Tinbergen controversy, it is argued that Keynes' criticism comprises the "Lucas critique," and that it is misleading to label this a critique of Keynesian economics. The postulate of immutable economic structures carries Tinbergen's approach to the extreme and neglects the possibility of slowly changing structures, as conceived by Marshall. The position is defended by arguments about equilibrium and rationality that are admittedly empty.

• Item Type: Paper
• Keywords: macroeconomics; real business cycles; Lucas critique; Marshall; Keynes; Tinbergen; time-varying coefficients; adaptive estimation; Kalman filter; equilibrium
• Faculties: Economics; Economics > Munich Discussion Papers in Economics; Economics > Munich Discussion Papers in Economics > Macro-Economics; Economics > Munich Discussion Papers in Economics > History of Economic Thought; Economics > Chairs > Chair of Institutional Economics (closed)
• Subjects: 300 Social sciences > 300 Social sciences, sociology and anthropology; 300 Social sciences > 330 Economics
• JEL Classification: E1, B22
• Place of Publication: Tübingen
• Language: English