The Standard Narrative on History of Macroeconomics: Central Banks and DSGE Models

Francesco Sergi, University of Bristol

 

How do macroeconomists write the history of their own discipline?

This article provides a careful reconstruction of the history of macroeconomics told by the practitioners working today in the dynamic stochastic general equilibrium (DSGE) approach. Such a tale is a 'standard narrative': a widespread and 'standardising view of macroeconomics as a field evolving toward 'scientiffic progress'.

The standard narrative explains 'scientiffic progress' as resulting from two factors: 'consensus' about theory and 'technical change' in econometric tools and computational power. This interpretation is a distinctive feature of central banks' technical reports about their DSGE models.

Furthermore, such a view on 'consensus' and 'technical change' is a signifficantly different view with respect to similar tales told by macroeconomists in the past - which rather emphasized the role of 'scientic revolutions' and struggles among competing 'schools of thought'. Thus, this difference raises some new questions for historians of macroeconomics.