Rethinking Macro Policy: Progress or Confusion?

Olivier Blanchard, C. Fred Bergsten Senior Fellow at PIIE, reflects on the state of macroeconomic thinking in the last chapter of a book published by MIT Press that he coedited, entitled Progress and Confusion, The State of Macroeconomic Policy. In particular, the book addresses the profession's self-reassessment following a historic financial crisis that was largely missed by prevailing macroeconomic models. "We are indeed proceeding in the trenches. But where the trenches will eventually lead remains unclear," writes Blanchard.