Thread by @ben_moll

Want some insight into the evolution of macro but weren’t around in the 70s & 80s?

Read Tom Sargent’s 1979/1987 “Macroeconomic Theory” (1st/2nd edn). h/t @GregWKaplan for recommending it!

Intro and ToC: benjaminmoll.com/sargent_ToC_in…

So many gems! These are the first two chapters:

Definitely make sure to read the whole intro in full benjaminmoll.com/sargent_ToC_in… for passages like this:

This is the book’s very last paragraph – sounds familiar?

There is a section entitled “In Defense of Keynesian Analyses that ‘Ignore’ the Government’s Budget Constraint” 😃 – the argument seems to be a version of Sargent and Wallace (1981)

Here is the famous “just because things move doesn’t mean they’re inefficient” argument

I found both the choice of material and exposition very interesting from today's point of view:

Some chapters are very similar to what we teach grad students today, e.g. Chapter III on investment, user cost of capital, etc...

... but others look much less familiar, e.g. this analysis of the Keynesian model with adaptive expectations:

... and even if the substance is familiar, the way it is presented often isn't: here an RBC model but everything is linear-quadratic

The whole book has much much more!

Hope you find this brief trip in time to being a macro grad student in the 70s and 80s as fascinating as I did.

(And if you already knew or remember the book, maybe looking back at it will bring back some fond memories)

@Undercoverhist I'm sure you knew this book, but thought you'd enjoy this anyway...