3. Macroeconomics for the 21st Century
The Rise of New Keynesian EconomicsNew Keynesian economics emerged in the last three decades as the dominant school of macroeconomic thought for two reasons. First, it successfully incorporated important monetarist and new classical ideas into Keynesian economics. Second, developments in the 1980s and 1990s shook economists' confidence in the ability of the monetarist or the new classical school alone to explain macroeconomic change.