With emphasis on the adjective and the normative verb should, my answer to the question of this session is a resounding yes. Indeed, I spent a good deal of time between January 1993 and January 1996 acting on the belief that there is such a macro model; so I certainly hope it exists.' This believable falls well short of perfection, leaves many questions unanswered, and is subject to substantial stochastic errors. Nonetheless, it is both useful and extensively used in policy analysis, where contact with reality is a necessity, and you cannot beat something with nothing. It also closely resembles, but does not quite match, the way macroeconomics is taught to beginning and intermediate (but not to graduate) students. In this short presentation, I will describe briefly the main practical elements that I think we should agree on, without worrying too much about their theoretical underpinnings. Then I will turn to two critical failings of the standard macro which cry out for theoretical and empirical repair. My organizing principle is the textbook exposition that has been standard, though not universal, in teaching intermediate macroeconomics for years. The question is: how does it differ from the core model used in policy analysis?

In one of those marvelous coincidences of intellectual history, Robert Lucas was born the year after the publication of Keynes' General Theory. For the first thirty-five years of their mutual lives, the two apparently coexisted in harmony. But their relationship has been tumultuous ever since. Lucas has frequently criticized Keynesian economics as poor science; and it is precisely in that spirit that I want to address the debate today. We all know the old joke about the professor who uses the same exam questions year after year, but changes the answers. That joke encapsulates all too well what has happened to macroeconomics these last fifteen years and seems to reflect poorly on economics as a science. Or does it? On second thought, the best answers to scientific questions do change as new observations are made, as new experiments are run, and as better theories are developed. The issue is whether the answers to important questions in macroeconomics have changed for good scientific reasons or for other reasons. The joke provides the framework for my talk. I will pose eight exam questions; and for each one I will summarize the answers given by Keynes, by Lucas and his followers, and by modern Keynesians. I pick only questions that are answered differently by Keynesians and Lucasians and that are central to contemporary macroeconomic debates. The focus is on whether the Keynesian or new classical answers have greater claim to being scientific. Each student must answer every question. I. Are Expectations Rational?

The US economy has performed better when the president of the United States is a Democrat rather than a Republican, almost regardless of how one measures performance. For many measures, including real GDP growth (our focus), the performance gap is large and significant. This paper asks why. The answer is not found in technical time series matters nor in systematically more expansionary monetary or fiscal policy under Democrats. Rather, it appears that the Democratic edge stems mainly from more benign oil shocks, superior total factor productivity (TFP) performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future.