In welfare economics, the theory of second best is inextricably linked to an article by Richard George Lipsey and Kelvin John Lancaster, published in 1956 in the Review of Economic Studies. The publication of this article was encouraged by Harry Gordon Johnson, who was a member of the journal's...

We provide a brief primer on how the core of usable macroeconomic theory for monetary policymakers has evolved over the past 50 years. Today's policy discussions center on the New Keynesian (NK) synthesis, which builds on the Neoclassical growth model and the AS-AD framework. It incorporates...