Chapter 16 - Assignment 1: Business Cycles

1. Explain why Farmer argues that Keynesians and monetarists had a common framework for debate. On what did they agree? What were the major sources of disagreement?
2. Why did the economic experience of the late 1970s and early 1980s lead to some dissatisfaction with the existing Keynesian and monetarist theories?
3. According to this discussion, on what grounds did Lucas critique Keynesian and monetarist theories?
4. How is the debate between new Keynesians and new classical economists similar to the earlier debate between Keynesians and monetarists? In what ways does the argument differ?