How far Real business cycle, and New Keynesian DSGE is able to define and explain aggregate economic phenomena? DSGE is partially a deterministic model which takes into account agent preferences, but I think it doesn't fully incorporate the dynamics of agent's preferences. It is difficult to generalize preferences using a single model, given that consumption function depends not only on govt. policy variables, but also on a host of other factors that determine aggregate consumption.
Having said that, it is also important to consider that most forecasting models are vulnerable to Lucas critique, whereas the problem of linking micro-founded theories involving individual household and firm's decisions and preferences with macroeconomic variables poses a difficult problem. So, what are the new developments in deterministic philosophy of macroeconomic modelling?
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