Charles Plosser’s review paper entitled ‘Understanding real business cycles‘ is a must for all those interested in the modern theories of the business cycles. A major advantage of the paper that it is written in plain English, it has a well-organized structure and summarizes by giving a clear vision of future development. Some of the most important suggestions of the paper:
- Keynesian macro is not a theory judged by the modern choice-theoretic standards. Keynesian models had significant empirical success but failed to trace the macro-level back to solid microfoundations.
- The aim of general equilibrium modelling is to help us to understand the role played by optimization and equilibrating tendencies at the agent-level. It makes no sense to postulate a disequilibrium framework or market failures before understanding the contribution of a general macroeconomic equilibrium. Large-scale fluctuations may be triggered even in the absence of market failures.
- RBC-theory has common…
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Utopia, you are standing in it! 
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