Date Added: Jun 2010
The "New Classical Macroeconomists" seem to pride themselves of pursuing a rigorous approach to macroeconomic phenomena (LUCAS and SARGENT, 1979). Yet its foundations are shaky, and its terminology is confused. This will be outlined in the following. Section 1 starts by explaining TINBERGEN's approach to estimating economic relationships. This approach, involving time-invariant behavioral relations, has been carried to the extreme by the New Classical Macoeconomists. KEYNES criticised the assumption that the parameters in economic models are to be taken as remaining constant over decades or even centuries.