Abstract

Over the last three decades the theory and practice of macroeconomics began to evolve into what M.Goodfriend and R.King (1997) have called a "New Neoclassical Synthesis ". Therefore, there is now more of a consensus on hat constitutes a "core of practical macroeconomics" than was the case thirty years ago. This consensus, is the result of the methodological convergence that has occurred hetıveen New Classical/Real Business Cycle theory and New Keynesian Economics. The New Neoclassic al Synthesis inherits the spirit of the old, in that it combines Keynesian and Classical elements into a single frarnework by using dynamic general stochastic equilibrium model.Methodologically tlhesis can be explained by a common reference to the microeconomic foundations of macroeconomics.From this standpoint, it involves intertemporal optimization and rational expectations along the New Classical Real Business Cycle theory and applies these ideas with imperfect competition and costly price adjustments along the Keynesian theory.Moreover, it embodies the insights of monetarists regarding the them and practice of monetary policy. This study shows that by combining pragmatically crucial rnacroeconomic element' of different school, of thought in to a unifiied framework, a methodological convergence between New Keynesian and New Classical Real Business Cvcle theory has occured and the gap between macroeconomics and microeconomics is narrowed.Nevertheless, the fact that new synthesis models include same Keynesian elements does not mean that they are a synthesis of different schools of thought and ideological differences does not exist.From this point of view, today there is a consensus on macroeconomic modeliing characteristics and the theory and practice of monetary policy. Therefore, macroeconomics is stil maving or evolving toward a Neoclassical Synthesis.

Key words: New Neoclassical Synthesis, Monetary Policy, IS-AS-MP Model, lnflation Targeting

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