This paper critically evaluates two different approaches to teaching macroeconomics at the undergraduate level through the comparison of two popular, recent handbooks: Olivier Blanchard's Macroeconomics (2021) and William Mitchell, Randall Wray and Martin Watts's Macroeconomics (2019). These...

We describe the interactive Fed Chairman Game available on the San Francisco Federal Reserve's website. We describe how the game can be used in a principles of macroeconomics class and provide an assignment to go along with it. Also, we discuss an assignment that can be used to adapt the game...

The Queen of England famously asked her economic advisers why none of them had seen "it" (the global financial crisis) coming. Obviously, the answer is complex, but it must include reference to the evolution of macroeconomic theory over the postwar period - from the "Age of Keynes" through the...

This paper compares various proposals for monetary policy rules according to the standard of political economy. It first presents an argument for why rules-based monetary policy is preferable to discretionary policy. Next it discusses at a general level two kinds of rules: those that can be...

While the IS/LM-AS/AD model is still the central tool of macroeconomic teaching in most macroeconomic textbooks, it has been criticised by several economists. Colander [1995] has demonstrated that the framework is logically inconsistent, Romer [2000] has shown that it is unable to deal with a...

While the IS/LM-AS/AD model is still the central tool of macroeconomic teaching in most macroeconomic textbooks, it has been criticised by several economists. Colander [1995] has demonstrated that the framework is logically inconsistent, Romer [2000] has shown that it is unable to deal with a...

Economics as introduced to undergraduate students tends to discourage many from pursuing a major. One problem is the unfortunate combination in our macroeconomic models of scientifically necessary rigor and far-reaching abstraction from the real world. Recent contributions have improved real...

Over the last decade a new consensus model has emerged in monetary macroeconomics, labelled New Keynesian macroeconomics (Clarida et al., 1999). It consists of three simple building blocs: a forward-looking IS-equation that is derived from the optimization problem of a representative household,...

The aim of this paper is to solve the inconsistency problem à la Barro and Gordon within a New Keynesian model and to derive time-consistent (stable) interest rate rules of Taylor-type. We find a multiplicity of stable rules. In contrast to the Kydland/Prescott-Barro/Gordon approach,...

This paper integrates a money and credit market into a static approximation of the baseline New Keynesian model based on a money-and-credit-in-the-utility approach, in which real balances and borrowing contribute to the household’s utility. In this framework, the central bank has no direct...