Editing Economics (section)

====New neoclassical synthesis====
{{Main|New neoclassical synthesis}}

After decades of often heated discussions between Keynesians, monetarists, new classical and new Keynesian economists, a synthesis emerged by the 2000s, often given the name ''the [[new neoclassical synthesis]]''. It integrated the rational expectations and optimizing framework of the new classical theory with a new Keynesian role for nominal rigidities and other market imperfections like [[imperfect information]] in goods, labour and credit markets. The monetarist importance of monetary policy in stabilizing<ref>{{cite journal |last1=Woodford |first1=Michael |title=Convergence in Macroeconomics: Elements of the New Synthesis |journal=American Economic Journal: Macroeconomics |date=2009 |volume=1 |issue=1 |pages=267–279 |doi=10.1257/mac.1.1.267 |jstor=25760267 |url=https://www.jstor.org/stable/25760267 |issn=1945-7707}}</ref> the economy and in particular controlling inflation was recognised as well as the traditional Keynesian insistence that fiscal policy could also play an influential role in affecting [[aggregate demand]]. Methodologically, the synthesis led to a new class of applied models, known as [[dynamic stochastic general equilibrium]] or DSGE models, descending from real business cycles models, but extended with several new Keynesian and other features. These models proved useful and influential in the design of modern monetary policy and are now standard workhorses in most central banks.<ref>Blanchard et al. (2017), pp. 517–518.</ref>