For policy, the central fact is that Keynesian policy recommendations have no sounder basis, in a scientific sense, than recommendations of non-Keyne… - Thomas J. Sargent

Q: “Professor Sargent, can you tell me what CD rates will be in two years?”
Sargent: “No.”

My recollection is that Bob Lucas and Ed Prescott were initially very enthusiastic about rational expectations econometrics. After all, it simply involved imposing on ourselves the same high standards we had criticized the Keynesians for failing to live up to. But after about five years of doing likelihood ratio tests on rational expectations models, I recall Bob Lucas and Ed Prescott both telling me that those tests were rejecting too many good models.

What policymakers (and econometricians) should recognize, then, is that societies face a meaningful set of choices about alternative economic policy regimes.