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Macroeconomics of Self-Fulfilling Prophecies

by Roger E.A. Farmer

  • ISBN: 9780262062039
  • ISBN10: 0262062038

Macroeconomics of Self-Fulfilling Prophecies

by Roger E.A. Farmer

  • List Price: $60.00
  • Binding: Hardcover
  • Edition: 2
  • Publisher: Mit Pr
  • Publish date: 06/01/1999
  • ISBN: 9780262062039
  • ISBN10: 0262062038
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Description: For many years it was fashionable to treat macroeconomics and microeconomics as separate subjects without looking too deeply at the relationship between the two. But in the 1970s there occurred an episode of high inflation and high unemployment, which was inconsistent with orthodox theory. As a result, macroeconomists began to pay much greater attention to the microfoundations of their subject.

In this book Roger E. A. Farmer takes a somewhat controversial point of view, arguing for the future of macroeconomics as a branch of applied general equilibrium theory. His main theme is that macroeconomics is best viewed as the study of equilibrium environments in which the welfare theorems break down. This approach makes it possible to discuss the role of government policies in a context in which policy may serve some purpose.

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