Convergence? Thoughts about the Evolution of Mainstream Macroeconomics over the Last 40 Years

This year marks the fortieth anniversary of the NBER Macroeconomics Annual Conference, founded in 1986. This paper reviews the evolution of mainstream macroeconomics since then. It presents my views, informed by a survey of a number of researchers who have made important contributions to the field. I develop two main arguments.The first is that, starting from strikingly different positions, there has been substantial convergence in terms of methodology, architecture, and main mechanisms. Methodology: Explicit micro foundations, explicit treatment of distortions, with at the same time an increased willingness to deviate from rational expectations, neoclassical utility, and profit maximization. Architecture: The wide acceptance of nominal rigidities as an essential distortion, although with mixed feelings. Mechanisms: The wide nature of the shocks to both the demand and the supply side.The second is that this convergence has been, for the most part, good convergence, that is, the creation of a generally accepted conceptual and analytical structure, a core to which additional distortions can be added, allowing for discussions and integration of new ideas and evidence rather than fights about basic methodology. Not everything is right, however, with too much emphasis on general equilibrium implications from the start rather than first considering partial equilibrium analysis of the phenomenon at hand.The appendix to the paper gives a sample of the views of the members of the survey on each of these arguments.