The New Classical Counter-Revolution: False Path or Illuminating Complement?

Abstract

In this paper the author responds to Laurence Seidman’s recent article, ‘The New Classical Counter-Revolution: A False Path for Macroeconomics’. The author challenges the view that new classical macroeconomics has been a false path and provides a critique of Seidman’s arguments with respect to his interpretation of the 1970s ‘stagflation’, the relevance of new classical macroeconomics for practical policymaking, the contribution of real business cycle theory, and the new classical content of contemporary macroeconomic textbooks. The author concludes that the new classical counter-revolution has had an extremely productive influence on the current mainstream new neoclassical synthesis framework.