The Quest for Microfoundations

The Fairy Tale History of Macroeconomics is, like all such stories, a tale of triumph. Once upon a time, there were the Dark Days of Macroeconomics when Keynesian IS-LM curves roamed the land. Then came the Troubled Times when the Keynesian models floundered in the Great Stagflation of the 1970s. But, along came an intrepid set of warriors, bearing new and better models, sorting through the wreckage of the Great Destruction of the Keynesian model. After Keynesian Economics came the promised l..