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1、PREFACETOTHEHANDBOOKPurposeTheHandbookofMacroeconomicsaimstoprovideasurveyofthestateofknowledgeinthebroadareathatincludesthetheoriesandfactsofeconomicgrowthandeconomicfluctuations,aswellastheconsequencesofmonetaryandfiscalpoliciesforgeneraleconomicconditions.ProgressinMacroe
2、conomicsMacroeconomicissuesarecentralconcernsineconomics.Henceitissurprisingthat(withtheexceptionofthesubsetofthesetopicsaddressedintheHandbookofMonetaryEconomics)noreviewofthisareahasbeenundertakenintheHandbookofEconomicsseriesuntilnow.Surprisingornot,wefindthatnowisanespec
3、iallyauspicioustimetopresentsuchareviewofthefield.Macroeconomicsunderwentarevolutioninthe1970'sand1980's,duetotheintroductionofthemethodsofrationalexpectations,dynamicoptimization,andgeneralequilibriumanalysisintomacroeconomicmodels,tothedevelopmentofnewtheoriesofeconomicflu
4、ctuations,andtotheintroductionofsophisticatedmethodsfortheanalysisofeconomictimeseries.Thesedevelopmentswerebothimportantandexciting.However,therapidchangeinmethodsandtheoriesledtoconsiderabledisagreement,especiallyinthe1980's,astowhethertherewasanycoreofcommonbeliefs,evenab
5、outthedefiningproblemsofthesubject,thatunitedmacroeconomistsanylonger.The1990'shavealsobeenexciting,butforadifferentreason.Inourview,themodernmethodsofanalysishaveprogressedtothepointwheretheyarenowmuchbetterabletoaddresspracticalorsubstantivemacroeconomicquestions-whethertr
6、aditional,new,empirical,orpolicy-related.Indeed,wefindthatitisnolongernecessarytochoosebetweenmorepowerfulmethodsandpracticalpolicyconcerns.Webelievethatboththeprogressandthefocusonsubstantiveproblemshasledtoasituationinmacroeconomicswheretheareaofcommongroundisconsiderable,
7、thoughwecannotyetannouncea"newsynthesis"thatcouldbeendorsedbymostscholarsworkinginthefield.Forthisreason,wehaveorganizedthisHandbookaroundsubstantivemacroeconomicproblems,andnotaroundalternativemethodologicalapproachesorschoolsofthought.xixiiPrefaceTheextenttowhichthefieldha
8、schangedoverthepastdecadeisconsiderable,andwethinkthatthereisagreatneedfort
