Development of Keynesian theory, mainly inspired in the USA, especially by Professor Alvin Hansen of Harvard. 'Macro-economics' becomes a widely accepted term for the Keynesian analysis, named by Norwegian economist Robert Frisch. Defined as economics concerned with 'unemployment, economic instability, inflation and economic growth', or as 'income and employment analysis', or by Samuelson as 'aggregate performance of the whole GNP and of the general price level'. Econometrics established as a separate branch of economics, involves application of statistical techniques to economic analysis. Aims at collecting empirical evidence to test theories of the 'New Economics' (macro-economics). The focus of the new economics includes 'national income' (or 'national dividend'), 'national output', and 'national expenditure', for which statistics are therefore collected and analysed by government departments (for example, the Central Statistical Office was established in the United Kingdom in 1941 to help direct the allocation of resources for the war effort in the UK, and in the USA the National Income Unit was established). Other government agencies were established to advise and monitor economic activity. For example in the USA the National Bureau of Economic Research under Veblen, the National Recovery Administration, Agricultural Adjustment Administration, all under Roosevelt's New Deal programme; in the UK the Economic Advisory Council in 1930 to monitor developments in trade and industry domestically and internationally and study the effect of fiscal policy.

Previous to this statistical approach, Pigou, Fisher, Mitchell, Bowley and Clark were active in developing concepts and methods of econometric analysis. Later, IS-LM analysis is a response of neo-Keynesians to the monetarist critique. The IS curve shows the relationship between interest rates and output where planned investment and planned saving is equal. LM curve relates interest rates and output where supply and demand for money are equal. The point of interrelation defines the macro equilibrium. This became a popular modern tool for application to the fiscal and monetary policy mix.

Wesley Mitchell
Business Cycles 1913. Investigates statistical evidence for business cycle in USA.

Colin Clark
The National Income 1924 - 1931 1932, collects and studies UK national income figures.

Sir Roy Allen
Macro-economic Theory, A Mathematical Treatment 1967, gives comprehensive advanced statement of macro-economic theory.

A. E. Feaveryear
Spending the National Income 1931, comprehensive study of national expenditure.

Sir Roy Harrod
Harrod-Domar model investigates conditions required to secure long term full employment under the Keynesian approach. International Economics 1939 gives Harrod's theory on the foreign trade multiplier effect. Toward a Dynamic Economics 1948, typical of the post-Keynesian modern analysis, establishes mathematically the pattern of growth in an economy where capital is the only factor of production (hence, does not attempt to be realistic though later neo-Keynesians make modifications in order to achieve realism).

Kaldor
Proposes export led growth as remedy for a recessionary climate.

Professor Paul Anthony Samuelson
MIT, first American to win Nobel Prize for economics. Foundations of Economic Analysis 1947, attacks decadence in economics pre-1930, notable for blend of advanced mathematical method and skillful literary exposition on a wide range of economic problems. Economics 1948 and thirteen further editions, two with Nordhaus, becomes standard work for students of macro and micro-economics.

Schumpeter
? - 1949. The Theory of Economic Development 1912. Stresses technological change as impetus for economic growth, includes quality changes as important measure of development, most importantly identifies entrepreneurs as responsible for credit creation and inflation by financing their ventures on bank money, thus eventually creating over-production and recession.

Wassily Leontif
American economist, proposes replacement of Keynesian ideas with input-output analysis. Studies in the Structure of the American Economy: Theoretical and Empirical Explorations in Input-Output Analysis 1953. Analyses the output of industries and thus identifies them as inputs for other industries, develops mathematical relationships between inputs and outputs, uses the relationships to define optimal allocation of resources. Bases theory on Walrasian equilibrium and adds empirical evidence.