A history of the golden dream of economists: from the configuration of the neoclassical synthesis to the present day

Abstract

Ever since the work of Keynes, and the consensus that emerged together with the neoclassical synthesis, it seemed that a situation was looming on the horizon in which control of the economy was possible. The limitations of this approach soon became apparent. On the one hand, policymakers act on a complex and uncertain reality in which agents design strategies that affect the effectiveness of public actions. On the other hand, it was questioned whether public decision-makers have the omniscience and benevolence needed to maximize the social welfare function. On that basis, market solutions and skepticism regarding the effectiveness of a discretionary policy have been strengthened. Nevertheless, there is ample room to improve economic policy based on the redefinition of its basic objectives, on the importance that institutions have proven to have and on proposals for solving specific problems.