David Colander and

The macro economy is complex; everyone knows that. Complex systems are difficult to analyze and manage; everyone knows that too. The best approach to teaching and describing the complex macro economy is something we know much less well. Currently, in teaching macro to both graduate and undergraduate students, we don’t stress just how complex the economy really is. The argument in this paper is that we should emphasize that complexity to frame the macro question.1 Having done that, we can get on with what we do, and much of the structure of both the graduate and undergraduate macro can be taught as it currently is. But instead of seeing the approaches at the two levels as substitutes for one another, complexity helps to frame as what they really are: complementary approaches to addressing a challenging set of questions. The standard academic approach employed today at the graduate level is to downplay the complexity and to de-emphasize the interactions among agents that make the macro economy so complex. Given their assumptions, the graduate models are intellectually satisfying and internally consistent. They may even help to shed light on certain key macro questions such as the need for policy consistency, and the importanc