THE RELEVANCE FOR DEVELOPING COUNTRIES OF RECENT DEVELOPMENTS IN MACROECONOMIC THEORY

1 January 1987

journal article
Published by Oxford University Press (OUP) in The World Bank Research Observer

Vol. 2 (2) , 171-188
https://doi.org/10.1093/wbro/2.2.171

Abstract

This article reviews recent developments in macroeconomic theory and considers their relevance for developing countries. Particular emphasis is given to the rational expectations revolution. The article asks whether government policies are systematic and suggests the need to study the expectations on which governments base their decisions. Also discussed are the neo-Ricardian theorem, the implications of real wage rigidity and of supply side models with sectoral income effects, and recent models involving large group interaction.

Keywords

MODELS
MACROECONOMIC THEORY
POLICIES
REVIEWS RECENT
GOVERNMENTS
WAGE RIGIDITY
RICARDIAN
EXPECTATIONS REVOLUTION

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