March 8, 2012

Special Issue of the Richmond Fed's Economic Quarterly Explores Modern Macroeconomic Theory

Richmond, Va.

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The great recession of 2007--2009 has generated significant external criticism of the way economists study and try to understand aggregate economic outcomes. Modern macroeconomic theory, in particular, has been criticized for its representation of the economy through highly stylized environments that abstract from distributional issues, ignore or minimize linkages between the financial and nonfinancial sectors of the economy, and, in general, rely too much on highly aggregative frameworks. This special issue of Economic Quarterly collects four articles that describe how modern macroeconomic research has dealt with some of these issues as part of a research program that has been ongoing for more than a decade.

You can find the full text of this article and others in the latest issue of Economic Quarterly at:
www.richmondfed.org/publications/research/economic_quarterly/.

In this issue of Economic Quarterly:

• Introduction to the Special Issue on Modern Macroeconomic Theory by Andreas Hornstein
• A Perspective on Modern Business Cycle Theory by Nobuhiro Kiyotaki
• Financial Frictions in Macroeconomic Fluctuations by Vincenzo Quadrini
• Macroeconomics with Heterogeneity: A Practical Guide by Fatih Guvenen
• Recent Developments in Economic Growth by Diego Restuccia
  

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond’s Research Department--Publications at 800.322.0565.

The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.

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