One troublesome aspect is the place of rational expectations macroeconomics in the often political debate over Keynesian economics. At least implicit… - Robert Barro

The last chapter modeled technological progress as an increase in the number of types of products, N. In this chapter, we allow for improvements in the quality or productivity of each type. This approach has come to be known as the Schumpeterian approach to endogenous growth. We can think of increases in N as basic innovations that amount to dramatically new kinds of goods or methods of production. In contrast, increases in the quality of the existing products involve a continuing series of improvements and refinements of goods and techniques.

Adam Smith is, of course, justly lauded for his advocacy of free markets and limited government. Particularly famous is his idea that each person’s pursuit of self-interest leads, as if by an invisible hand, to socially efficient outcomes.

If we look beyond the issue of monetary nonneutrality, then we do find areas of macroeconomics that use rational expectations and in which important recent progress has been made.