+Handbook. Edited

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The History of Macroeconomics from Keynes’s 
General Theory to the Present
M. De Vroey and P. Malgrange
Discussion Paper 2011-28

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The History of Macroeconomics from Keynes’s General Theory to the 
Present 
Michel De Vroey and Pierre Malgrange 
◊
June 2011 
Abstract 
This paper is a contribution to the forthcoming Edward Elgar Handbook of the History of 
Economic Analysis volume edited by Gilbert Faccarello and Heinz Kurz. Its aim is to 
introduce the reader to the main episodes that have marked the course of modern 
macroeconomics: its emergence after the publication of Keynes’s General Theory, the 
heydays of Keynesian macroeconomics based on the IS-LM model, disequilibrium and 
non-Walrasian equilibrium modelling, the invention of the natural rate of unemployment 
notion, the new classical attack against Keynesian macroeconomics, the first wave of new 
Keynesian models, real business cycle modelling and, finally, the second wage of new 
Keynesian models, i.e. DSGE models. A main thrust of the paper is the contrast we draw 
between Keynesian macroeconomics and stochastic dynamic general equilibrium 
macroeconomics. We hope that our paper will be useful for teachers of macroeconomics 
wishing to complement their technical material with a historical addendum.
Keywords: Keynes, Lucas, IS-LM model, DSGE models 
JEL classification: B 22, E 10, E 20, E 30
 
◊
IRES, Louvain University and CEPREMAP, Paris. Correspondence address : 
[e-mail]
The authors are grateful to Liam Graham for his comments on an earlier version of the paper.

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