MAINSTREAM macroeconomics has a pretty poor reputation these days, both among the public at large and among economists in other fields. This is hardly surprising. There is little consensus on even the most basic questions in macro. Ask top academics why America’s post-crisis recovery has been so slow and you will get many different conflicting answers. But the most obvious reason for the widespread disdain is that the profession failed to predict that the biggest and most painful downturn since the Great Depression was even possible.
Now, several groups of economists are trying to rebuild macro, often melding previously discarded ideas with sophisticated new mathematical and computational techniques. This week’s print edition gives an overview of some of the interesting new developments, but in this post, I want to look more at the history of the field. The following slideshow by Markus Brunnermeier and Delwin Olivan of Princeton is a good place to start: