ABSTRACT
John Maynard Keynes is the father of macroeconomics. The obstacles to the establishment of a new macroeconomic equilibrium included long-term contracts such as mortgages and leases, which bound individuals and firms to a series of payments in nominal terms. One of the key ideas of Keynesian macroeconomics was the “Phillips curve,” which postulated that there was a trade-off between unemployment and inflation. In any event, as far as neoclassical macroeconomics is concerned, everyone is supposed to be the same. The analysis of macroeconomic phenomena assuming that the society is a collection of identical individuals without interaction effects is known as the “fallacy of composition,” or the “aggregation problem.” Macroeconomics has been in disarray for some time, but the Meltdown of 2008 and its aftermath demonstrated vividly that in the absence of a consensus within the elite of the economics profession there cannot be effective government policy.
