My thesis in this lecture is that macroeconomics in this original sense has succeeded: Its
central problem of depression prevention has been solved, for all practical purposes, and has
in fact been solved for many decades. There remain important gains in welfare from better
fiscal policies, but I argue that these are gains from providing people with better incentives
to work and to save, not from better fine-tuning of spending flows. Taking U.S. performance
over the past 50 years as a benchmark, the potential for welfare gains from better long-run,
supply-side policies exceeds by far the potential from further improvements in short-run
demand management.
