Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/323348 
Year of Publication: 
2025
Series/Report no.: 
GLO Discussion Paper No. 1644
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
The aim of our paper is to assess what we call the 'discrepancy hypothesis'. It states that the transformation of macroeconomics triggered by Lucas, Kydland and Prescott has failed to percolate in the contents of undergraduate textbooks. In the theoretical part of the paper, we draw a contrast between AS-AD and DGE modeling based on three benchmarks: the presence of microfoundations, the expectations assumption and the equilibrium concept used. In its empirical part, we measure how undergraduate textbooks fare with respect to AS-AD/DGE divide. We use two sources, the WorldCat database, and a survey of the undergraduate textbooks used for teaching in leading universities. The discrepancy hypothesis is confirmed. Thirty-four out of the thirty-nine textbooks retained from the WorldCat catalogue are based on the AS-AD, and three on the DGE core model. Eleven out of twelve most used undergraduate textbooks of the teaching sample adopt the AS-AD line.
Subjects: 
macroeconomics
textbooks
IS-LM/AS-AD
DGE
JEL: 
A22
A23
E00
Document Type: 
Working Paper

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