ABSTRACT
In early 1997 a small group of world-class economists, serving as panelists in a session of the American Economics Association meetings, addressed themselves to the question “Is there a core of practical macroeconomics that we should all believe?” Their listeners could hardly imagine that a second group of economists were gathered across the hall to answer a similar question about microeconomics. Dating from the marginalist revolution of the 1870s, microeconomics has had a readily recognizable core – and one that has grown increasingly solid over the past century. By contrast, the Keynesian revolution that began in the 1930s ushered in a macroeconomics that was – at least from one important point of view – essentially coreless. The capital theory that underlay the macroeconomics being developed by the Austrian School was nowhere to be found in the new economics of John Maynard Keynes.
