In New Classical theory, periods of declining employment - business cycle downturns - may be caused by an unexpected decline in aggregate demand, which leaves workers mistakenly holding out for nominal wages that exceed the new market-clearing level.
In the late 1960s, the New Classical economists saw the same weaknesses in the microfoundations of macroeconomics that have motivated me. They hated its lack of rigor. And they sacked it.
I think what Bob Shiller and I are doing is we're focusing on macroeconomics and the role of psychology in macroeconomics.
I would never have been a good reporter because I am not accurate regarding facts.
I've always been a macroeconomist. That's what I teach. And I guess that's what I've been concerned with ever since I've been very young.