New classical macroeconomics

economics concept

school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework

new classical macroeconomics model in which business-cycle fluctuations are efficient responses to exogenous changes in the real economic environment

macroeconomic method applying general equilibrium theory and microeconomic principles to postulate economic phenomena, e.g. economic growth, business cycles, policy effects or market shocks

conceptual critique of macroeconomic models of the 1960s, that the decision rules of Keynesian models cannot be considered as structural, i.e. invariant with respect to changes in government policy

Microfoundations are an effort to understand macroeconomic phenomena in terms of individual agents' economic behavior and interactions. Research in microfoundations explores the link between macroeconomic and microeconomic principles in order to explore the aggregate relationships in macroeconomic models.

fusion of new classical macroeconomics/real business cycle theory and early New Keynesian economics into a consensus view on the best way to explain short-run fluctuations in the economy