Hayek, Keynes, and modern macroeconomics

Roger Koppl, William J. Luther

Research output: Contribution to journalArticlepeer-review

16 Scopus citations


The Great Recession seems to be creating a change in the trend of macroeconomic thinking. Prior to the financial crisis of 2008, dynamic stochastic general equilibrium (DSGE) models dominated the macroeconomics literature without any apparent challengers on the horizon. Since then, however, we have seen an increasing interest in macroeconomic models that address the state of confidence ("animal spirits"), complexity, cognition, and radical uncertainty. Most of the renewed interest in animal spirits, complexity, cognition, and radical uncertainty has come from a more or less "Keynesian" perspective. We discuss the potential to emphasize these elements from a more "Hayekian" perspective and argue that Austrian approaches to macroeconomics along these lines are more likely to resonate with mainstream economists than in years past.

Original languageEnglish (US)
Pages (from-to)223-241
Number of pages19
JournalReview of Austrian Economics
Issue number3
StatePublished - Sep 2012
Externally publishedYes


  • Animal spirits
  • Cognition
  • Complexity
  • Great recession
  • Hayek
  • Keynes
  • Radical uncertainty
  • State of confidence

ASJC Scopus subject areas

  • General Economics, Econometrics and Finance


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