A couple of comments:

First I agree with Roy that there has been a massive retreat from theory in micro of the type many of us old codgers remember. That was the key finding of my latest Making of an Economist study.  Empirical micro is now king, and much of it is empirical work without theory. Whereas previously economists did a theoretical model and added an empirical section as an afterthought or to get it published, now they do an empirical study, and add a theoretical section as an afterthought--or to get it published.  That's how the graduate students distinguished an economist--the best empirical social scientist. I wrote about some of this in my "What We Teach and What We Do" article in the JEE back in 2005.

Macro is a different story, which I won't discuss here, but in macro, theory of the dynamic stochastic general equilibrium variety, gets much more emphasis, and while there is lip service paid to empirical work, much of it is only lip service. Kevin Hoover has done some interesting work here, and there is what I see as a movement led by him, Soren Johansen, and Katarina Juselius to make macro an empirical field as well. (See their article in the latest AEA paper and proceedings.)

Micro theory is still being done, but it is more involved with changing the key assumptions--giving up rationality, selfishness, and integrating in much more complicated models--non-linear dynamic stochastic models. It is here where I differ slightly from Roy. I think the development of behavioral and complexity work is connected to the demise of simple theory. That research has led us to give up the simple theoretical models, since, at the core, the pillars of those models are questionable. We've accepted that but it isn't so clear what we do with that. So we retain the deductive theory--at least in our teaching, but then we do research that doesn't strongly rely on it.

        My interest in these areas is primarily trying to follow the developments, and think how they relate to how we teach economics. I'm primarily a teacher, and consolidator of ideas, and my interest in history of thought is derivative of that interest. I think most historians of thought are truer historians, which means that they would naturally be less interested in these modern developments. So I am less concerned that most historians do not follow these latest developments--their interest is elsewhere. However, I agree with Roy that those who are talking about modern economics should be aware of all these developments, because they define modern economics.

        One of the things I concluded is that each of these areas is highly technical and is beyond what anyone but a polymath can pick up in grad school, so what I see happening is a separation of economics into different groups or even different fields. The people in these various fields don't significantly interact much with each other.  This raises a number of interesting questions about the teaching of economics for both graduate and undergraduate majors. My latest mission is to try to include discussions of what modern economics is in my principles textbook so that students can put what they are being taught into perspective.  Thus, I have a new chapters "Thinking like a Modern Economist" and "Thinking like a Modern Macro Economist" drafted for my text, and I'm struggling to get them through the reviewing process that is strongly biased against change in the texts.

David Colander