account for most of the correlations between money and real economic activity This verdict does not invalidate some of the major successes of the new lassical approach. In terms of methodology, these successes include the application of equilibrium modeling to macroeconomic analysis, the use of rational expectations as part of this modeling, and the revolution ir pproaches licy evaluation, One specific application in which the equilibrium approach has achieved some success is in analyses of fiscal policy(see Barro, 1989b, for a survey). Some of this research revolves around the Ricardian equivalence theorem, which provides conditions under which substitutions of budget deficits for taxes are of no consequence. I But further developments have brought out the real effects from government purchases and public services, the composition and timing of distorting taxes, and so on. Another interesting off-shoot from the new classical approach is the application of game theory to the interaction between government policymakers and the private sector. The results here involve the distinction between rules and discretion, and the related roles of commitment, credibility, and reputation(see, Rogoff, 1989, for a survey). Some of the early analyses in this area dealt with monetary models; specifically, with the Phillips curve and the tradeoff between unemployment and inflation. But subsequent applications, such as to tax and regulatory policies and to international debt, do not rely on an important role for money in business fluctuations 1 Bartley(1989) claims more than I would by describing Ricardian uivalence as "an Exocet aimed at the heart of the Keynesian notion that deficits stimulate the economy