Which Paradigm for Macroeconomics?

Last week the WSJ had two articles on business cycles. The first on economist John Genakoplos working on a new theory that he refers to as a leverage cycle theory. The attempt is to find a new paradigm to explain why banks and other financial institution over-leverage generating a financial crisis. The goal is to come up with a better model that can help the Fed eliminate the problem of cycles. What seem to be missing from the theory are the institutional arrangements of financial markets and the role of the Fed and regulations in that market. The second article "The Man Who Predicted the Depression" appeared a couple of days later and explains how Ludwig von Mises offered a theory to explain business cycles. A theory expanded by F.A. Hayek that led to him being awarded the Nobel Prize in Economics. Today known as Austrian business cycle theory it argues that the Fed’s credit policy, which can create the over-leverage, is at the root cause of business cycles. The Austrian theory has gone in and out of prominence over the years. One reason I would argue that it has been ignored is because it argues that the Fed does not stabilize or prevent cycles, but creates them. If economists think the Fed is necessary than the Austrian business cycle theory may continue to be ignored. However, before economists look for new ways to predict business cycles perhaps we should look at the existing theories that have proven to hold in the past.