The covid-19 pandemic is forcing a rethink in macroeconomics
It is not yet clear where it will lead
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IN THE FORM it is known today, macroeconomics began in 1936 with the publication of John Maynard Keynes’s “The General Theory of Employment, Interest and Money”. Its subsequent history can be divided into three eras. The era of policy which was guided by Keynes’s ideas began in the 1940s. By the 1970s it had encountered problems that it could not solve and so, in the 1980s, the monetarist era, most commonly associated with the work of Milton Friedman, began. In the 1990s and 2000s economists combined insights from both approaches. But now, in the wreckage left behind by the coronavirus pandemic, a new era is beginning. What does it hold?
This article appeared in the Briefing section of the print edition under the headline "Starting over again"
From the July 25th 2020 edition
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