PART III

N. Gregory Mankiw, “A Quick Refresher Course in Macroeconomics.” Journal of Economic Literature, Vol. XXVIII (December 1990), pp.1645-1600.

The consensus in macroeconomics that prevailed until the early 1970s faltered because of two flaws, one empirical and one theoretical. The empirical flaw was that the consensus view could not adequately cope with the rising rates of inflation and unemployment experienced during the 1970s. The theoretical flaw was that the consensus view left a chasm between microeconomic principles and macroeconomic practice that was too great to be intellectually satisfying.

In the text above:

Item 3 - There was an unacceptable gap between micro and macroeconomics.