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Rethinking Expectations – The Way Forward for Macroeconomics - Princeton Scholarship Online
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Rethinking Expectations: The Way Forward for Macroeconomics

Roman Frydman and Edmund S. Phelps


This book originated from a 2010 conference marking the fortieth anniversary of the publication of the landmark “Phelps microfoundations volume,” Microeconomic Foundations of Employment and Inflation Theory, a book that is often credited with pioneering the currently dominant approach to macroeconomic analysis. However, this book argues that the vast majority of macroeconomic and finance models developed over the last four decades derailed, rather than built on, the Phelps volume's “microfoundations” approach. Whereas the contributors to the 1970 volume recognized the fundamental importance of ... More

Keywords: macroeconomic analysis, Rational Expectations Hypothesis, financial crisis, employment, inflation, expectations, macroeconomic models, asset prices, Phelps microfoundations volume, microfoundations

Bibliographic Information

Print publication date: 2013 Print ISBN-13: 9780691155234
Published to Princeton Scholarship Online: October 2017 DOI:10.23943/princeton/9780691155234.001.0001


Affiliations are at time of print publication.

Roman Frydman, editor
New York University

Edmund S. Phelps, editor
Columbia University

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Front Matter

Part One Back to the Foundations

Part Two Autonomous Expectations in Long Swings in Asset Prices

Part Three Rethinking Unemployment-Inflation Trade-offs and the Natural Rate Theory

Chapter Eleven Stabilization Policies and Economic Growth

Philippe Aghion and Enisse Kharroubi

Part Four Policymaking after “Rational Expectations”

End Matter