The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

New Classical Macroeconomics

  • Stanley Fischer
Reference work entry


The new classical macroeconomics (NCM) attempts to build macroeconomics entirely on the foundations of market clearing and optimization by economic agents. It is also known as the rational expectations–equilibrium approach to macroeconomics. The leading figures are Robert Lucas of the University of Chicago and Thomas Sargent of the University of Minnesota, whose 1981 volume contains many of the formative contributions. Lucas (1977) and Sargent (1982) provide nontechnical accounts of the approach. Other leading figures include Edward Prescott and Neil Wallace of the University of Minnesota and Robert Barro of the University of Rochester.

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Stanley Fischer
    • 1
  1. 1.