Macro-Economics: Theory Performance and Policy

The keys to understanding the machinations of the markets writ large, contend the authors, is rational expectations. It may seem entirely reasonable to suggest and to suppose the a population en bloc will display tendencies that spring from anticipated reactions to their actions,but the notion was resisted mightily by theoreticians who preferred to consult their charts ratherr than the prevailing winds.That is not to say that there is no firm mathematical grounding in these theories; indeed there is, and in plenty, but there is also verification in observed behavior. Hall and Taylor had the burden of proof to support their then novel theories, and one can suppose that they supplied more than enough evidence.Young economists and enlightened humanists, as well as mathematicians and statisticians will find much to satisfy their disciplines, and they must all be careful to take what is presented in small bites lest they find themselves having bitten off more than they can comfortably...chew.