ABSTRACT
Two of the stylized facts about modern macroeconomics are that Maynard Keynes invented it in 1936 with the publication of his General Theory of Employment, Interest and Money and that this basic apparatus was supplanted by the rational expectations revolution in the 1970s. While there is just enough substance behind each of these two myths for them to have become widespread, they hide as much as they reveal about the true evolution of ideas that led to modern macroeconomics. In particular, they hide the fact that Keynes was the first theorist to introduce an explicit analytical model of expectations into macroeconomics. Contrary to the canard begun by Paul Samuelson, in his obituary notice of Keynes, that the General Theory “paves the way for a theory of expectation, but it hardly provides one” (1946:320) it is actually the case that Keynes was the product of an intellectual tradition that had paved the way for a theory of expectation, but he ultimately had to provide it himself.1
