Economic Events and Keynesian Ideas : The 1930s and the 1970s

Like the proverbial chicken and the egg, economic events and macroeconomic theory have borne an ongoing ambiguous relationship to one another. Keynes himself, in his scathing indictment of the influence of "academic scribblers" on actual policy, pointed to one such avenue of impact. George Stigler in his Nobel lecture "The Process and Progress of Economics" pointed to a channel leading in the exact opposite direction. Singling out macroeconomics as "notorious" for "its responsiveness to contemporary events," Stigler cited the unemployment of the 1930s as the reason for the success of Keynes' General Theory and the inflation of the 1970s as the reason for its demise