10. Big Ideas in Macroeconomics: A Nontechnical View

Abstract

Economy is a popular subject of conversation. In a typical conversation like that, the greater scope of the discipline of economics is often reduced to public policy and macroeconomics domain of this subject. This may give one the impression that people are quite up-to-date about the developments in macroeconomics among different branches of economics. Unfortunately, the reality is different. Even though macroeconomics is discussed widely, the discussions on this subject are centred on the Keynesian ideas, which have been put forward by John Maynard Keynes in his magnum opus The General Theory of Employment, Interest and Money published in early 1936. Today, many thousands of researchers are devoted to the exploration of non-Keynesian ideas in macroeconomics. The Keynesian policies often suffered serious setbacks. As an instance, Japan saw persistent recession in the 1990s in spite of being faithful to the Keynesian policy prescriptions.