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Modern Business Cycle Theory

Modern Business Cycle Theory

Edited by Robert J. Barro

ISBN 9780674578609

Publication date: 01/01/1989

The new classical approach to macroeconomics, which assumes that people gather and use economic information efficiently, has been the most important theoretical advance since the Keynesian revolution of the 1930s. This book surveys the major contributions of the “second generation” of proponents of the new classical approach, emphasizing real business cycle theories and applying them to a variety of phenomena.

The chapters include expositions of growth theory, real models of business fluctuations, the informational role of prices, consumption, fiscal policy, rules versus discretion in monetary policy, time consistency and policy, and monetary models. Although the chapters are aimed at advanced undergraduate- and graduate-level students, they will also be of interest to researchers who are looking for a compact and original exposition of the new classical macroeconomics.


  • This book contains essays written by distinguished authors, each surveying some recent developments in a particular area of macroeconomics, and all written or revised expressly for this volume. The book emphasizes research that assumes market clearing and rational expectations—what Barro in his introduction calls new classical macroeconomics.

    —Kenneth D. West, Journal of Economic Literature


  • Robert J. Barro is Professor of Economics at Harvard University and has written widely on macroeconomic and monetary economics.

Book Details

  • 348 pages
  • 6-1/8 x 9-1/4 inches
  • Harvard University Press