中级宏观经济学英文11 The Macroeconomic Policy Debate

1、Intermediate,Macroeconomics,Lecture 11,1,The Macroeconomic Policy Debate,William McChesney Martin,The fed.s job is to take away the punch bowl,just as the party gets going,联储的工作是在宴会进行时拿走盛满酒的酒杯,The economy is inherently unstable,2,The Macroeconomic Policy Debate,Milton Friedman,我们需要的不是把经济之车的方向盘一直调整到,

2、不可预期的无规则之路上的高超货币司,机,The economy is naturally stable,3,The Macroeconomic Policy Debate,1,2,Active or passive,Free to use discretion or fixed policy rule,4,Should Policy Be Active or Passive,Active,In the absence of an active government role in,the economy, events like the Great,Depression could occur

3、 regularly,fight shocks by fiscal/monetary policy,5,Should Policy Be Active or Passive,Passive,Lags in implementation unemployment insurance,Martin Weitzman: profit sharing,6,Should Policy Be Active or Passive,Passive,Economic forecasting is difficult,index of leading indicators,economic models,7,Sh

4、ould Policy Be Active or Passive,e.g,制造业工人平均生产周数,平均每周州失业保障首次申请,发放的新建筑许可证,敏感原料的价格变动,股票价格指数,根据通货膨胀调整的货币供给,消费者预期指数,8,Should Policy Be Active or Passive,Ignorance, expectations, & the “Lucas Critique,Robert Lucas,Expectations play a crucial role in the economy,Expectations depend on policies,Estimating

5、the effect of a policy change requires knowing,how peoples expectations will respond,Traditional methods of policy evaluation do not,adequately take into account this impact of policy on,expectations,9,The Historical Record,Still cannot settle the debate, because it is,not easy to identify the sourc

6、es of economic,fluctuations. Multiple interpretations are,reasonable,We did better? Or the data did? Is the,stabilization of the economy a figment of the,data? (Christina Romer,10,Should Policy be Conducted by Rule or,by Discretion,The debate over rules v.s. discretion is distinct,from the debate ov

7、er passive v.s. active,policy,e.g. MS will grow steadily at 3% per year,MS will grow at 3%+(u-6,11,Should Policy be Conducted by Rule or,by Discretion,1,2,Why not by discretion,Possible policy rules,12,Why Not by Discretion,Distrust of policy makers & the political process,Incompetence,political pro

8、cess is erratic (reflects shifting,power of special interest groups,economy is complicated while politicians often,do not have sufficient knowledge (charlatans,propose appealing but incorrect solutions,1,13,Why Not by Discretion,1,Distrust of policy makers & the political process,Opportunism,Macroec

9、onomic policy used as electoral ends,political business cycle,14,Why Not by Discretion,Real GDP growth (Democratic,Truman,0.8,8.9,6.1,7.6,4.3,3.7,5.8,Kennedy/Johnson,2.3,Johnson,Carter,Clinton I,Clinton II,Average,6.4,4.7,2.3,3.9,3.1,6.5,5.4,3.5,4.2,5.8,2.5,2.8,2.3,4.5,4,4.7,0.3,3.4,3.7,3.5,15,Why N

10、ot by Discretion,Eisenhower I,4.6,Eisenhower II,1.9,Nixon,3.0,Nixon/Ford,Reagan I,Reagan II,G.H.W.Bush,G.W.Bush,Average,5.8,2.3,3.6,3.4,0.5,3.1,0.7,1.0,0.1,0.6,2.1,3.1,1.2,2.2,0.3,7.1,7.4,3.3,0.4,4.0,2.9,0.9,3.1,3.3,2.0,2.4,5.5,5.4,7.0,3.8,2.7,4.1,16,Why Not by Discretion,Time inconsistency of discr

11、etionary policy,Policy makers tend to announce policy change,in advance to influence the expectations,If private decision-makers really have acted,on the basis of their expectations,policymakers has an incentive to renege,2,17,Rules for Monetary Policy,Money supply grow at a steady rate,Nominal GDP

12、target,Price level target,All 3 are nominal variables - nobody knows,exactly what the real levels are,18,Rules for Fiscal Policy,Balanced-budget rule,Budget deficit or surplus can,help stabilize the economy,be used to minimize the distortion of incentives,caused by the tax system,be used to shift tax burdens between different,generations,19,Conclusions,Lucas: “As an advice,giving profession we are in,way over our heads,There is no simple and compellin