Journal articles: 'E Macroeconomics and monetary economics'

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Costabile, Lilia. "Istitutions for Social Well-Being: alcune risposte." QA Rivista dell'Associazione Rossi-Doria, no. 3 (August 2009): 103–11. http://dx.doi.org/10.3280/qu2009-003005.

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- Answering the round table participants, the author illustrates the project of this book and its main findings. While the book implies a focus on social policy, the contributors have brought to it their expertise not only in welfare economics but also in macroeconomic and monetary policy. This article outlines how social policy relates to these economic issues, and adopts an international political economy approach both in explaining hierarchies among countries, and in calling into question the "efficiency/equality trade off" as a useful instrument in comparing the economic performance of Europe and the US. Finally, the article discusses the issue of a possible convergence between the social models of Europe towards those of the best performing countries.EconLit Classification: D600, E120, F300, F400, F500Keywords: Welfare Economic, Growth, Globalization, Open Economy Macroeconomics, European Monetary UnionParole chiave: Welfare state, Crescita, Globalizzazione, Macroeconomia delle economie aperte, Unione monetaria europea

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Moiseev, S. R. "The behavioral economics of monetary policy." Voprosy Ekonomiki, no. 5 (May 28, 2018): 139–50. http://dx.doi.org/10.32609/0042-8736-2018-5-139-150.

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Macroeconomics is the basis of monetary policy analysis in most researches. At the same time a new cross disciplinary approach has emerged - at the crossroad of macroeconomics and behavioral economics. Alternative theories describe the impact of personnel independence of monetary authorities, career incentives, staff properties and the gender diversity of central bank governors on monetary policy results. They shed the light on personnel policy characteristics and the staff profile in a central bank.

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Karim, Zulkefly Abdul, and Bakri Abdul Karim. "Interest Rates Targeting of Monetary Policy: An Open Economy SVAR Study of Malaysia." Gadjah Mada International Journal of Business 16, no. 1 (February 28, 2014): 1. http://dx.doi.org/10.22146/gamaijb.5464.

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This paper examines the implementation of monetary policy during the interest rates targeting in a small-open economy (i.e. Malaysia) by using an open-economy structural VAR (SVAR) study. It tests the effect of foreign shocks upon domestic macroeconomic fluctuations and monetary policy, and examines how effective monetary policy is in influencing macroeconomic variables. The results show that during interest rates targeting, monetary policy plays a significant role in affecting macroeconomics variables. This finding suggests that monetary policy has an important role as a stabilization policy in a small-open economy.

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Arestis, Philip. "Fiscal policy is still an effective instrument of macroeconomic policy." Panoeconomicus 58, no. 2 (2011): 143–56. http://dx.doi.org/10.2298/pan1102143a.

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Recent developments in macroeconomics and macroeconomic policy, what has come to be known as ?New Consensus in Macroeconomics?, downgrades the role of fiscal policy and upgrades that of monetary policy. This contribution aims to consider this particular contention by focusing on fiscal policy. We consider fiscal policy within the current ?new consensus? theoretical framework, which views fiscal policy as ineffective, and argue that it deserves a great deal more attention paid to it than it has been recently. We review and appraise recent and not so recent theoretical and empirical developments on the fiscal policy front. The possibility of fiscal and monetary policy coordination is proposed and discussed to conclude that it deserves a great deal more attention and careful consideration than it has been given to in the past. Our overall conclusion is that discretionary application of fiscal and monetary policy in a coordinated and focused manner as a tool of macroeconomic policy deserves serious attention paid to it than hitherto.

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Sargent, Thomas J. "Robert E. Lucas Jr.'s Collected Papers on Monetary Theory." Journal of Economic Literature 53, no. 1 (March 1, 2015): 43–64. http://dx.doi.org/10.1257/jel.53.1.43.

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This paper is a critical review of and a reader's guide to a collection of papers by Robert E. Lucas, Jr. about fruitful ways of using general equilibrium theories to understand measured economic aggregates. These beautifully written and wisely argued papers integrated macroeconomics, microeconomics, finance, and econometrics in ways that restructured big parts of macroeconomic research. (JEL A31, E00, E13, E50)

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Levando, Dmitry. "A survey of strategic market games." Ekonomski anali 57, no. 194 (2012): 63–106. http://dx.doi.org/10.2298/eka1294063l.

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The Strategic Market Game (SMG) is the general equilibrium mechanism of strategic reallocation of resources. It was suggested by Shapley and Shubik in a series of papers in the 70s and it is one of the fundamentals of contemporary monetary macroeconomics with endogenous demand for money. This survey highlights features of the SMG and some of the most important current applications of SMGs, especially for monetary macroeconomic analysis.

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Correa, Amelia. "On the Retail Sector." Journal of Interdisciplinary Economics 21, no. 1 (May 2009): 69–78. http://dx.doi.org/10.1177/02601079x09002100106.

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We append a retail trade sector to the industrial sector of an economy. The macroeconomic model is a variant of the circuit approach to monetary macroeconomics. The conclusion is that an increase in the size of the ‘unproductive’ sector, employment in the ‘productive’ sector remaining constant, leads to a rise in the price level and interest rates.

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Nakamura, Emi, and Jón Steinsson. "Identification in Macroeconomics." Journal of Economic Perspectives 32, no. 3 (August 1, 2018): 59–86. http://dx.doi.org/10.1257/jep.32.3.59.

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This paper discusses empirical approaches macroeconomists use to answer questions like: What does monetary policy do? How large are the effects of fiscal stimulus? What caused the Great Recession? Why do some countries grow faster than others? Identification of causal effects plays two roles in this process. In certain cases, progress can be made using the direct approach of identifying plausibly exogenous variation in a policy and using this variation to assess the effect of the policy. However, external validity concerns limit what can be learned in this way. Carefully identified causal effects estimates can also be used as moments in a structural moment matching exercise. We use the term “identified moments” as a short-hand for “estimates of responses to identified structural shocks,” or what applied microeconomists would call “causal effects.” We argue that such identified moments are often powerful diagnostic tools for distinguishing between important classes of models (and thereby learning about the effects of policy). To illustrate these notions we discuss the growing use of cross-sectional evidence in macroeconomics and consider what the best existing evidence is on the effects of monetary policy.

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Ascari, Guido, and Argia M. Sbordone. "The Macroeconomics of Trend Inflation." Journal of Economic Literature 52, no. 3 (September 1, 2014): 679–739. http://dx.doi.org/10.1257/jel.52.3.679.

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Most macroeconomic models for monetary policy analysis are approximated around a zero inflation steady state, but most central banks target an inflation rate of about 2 percent. Many economists have recently proposed even higher inflation targets to reduce the incidence of the zero lower bound constraint on monetary policy. In this survey, we show that the conduct of monetary policy should be analyzed by appropriately accounting for the positive trend inflation targeted by policymakers. We first review empirical research on the evolution and dynamics of U.S. trend inflation and some proposed new measures to assess the volatility and persistence of trend-based inflation gaps. We then construct a Generalized New Keynesian model that accounts for a positive trend inflation. In this model, an increase in trend inflation is associated with a more volatile and unstable economy and tends to destabilize inflation expectations. This analysis offers a note of caution regarding recent proposals to address the existing zero lower bound problem by raising the long-run inflation target. (JEL E12, E31, E32, E52, E58)

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Altig, David. "Introduction: Recent Developments in Monetary Macroeconomics." Journal of Money, Credit, and Banking 35, no. 6b (2003): 1039–43. http://dx.doi.org/10.1353/mcb.2004.0015.

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Palley, Thomas. "Macroeconomics and monetary policy: competing theoretical frameworks." Journal of Post Keynesian Economics 30, no. 1 (October 1, 2007): 61–78. http://dx.doi.org/10.2753/pke0160-3477300103.

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Marien, Stacey. "Book Review: The Encyclopedia of Central Banking." Reference & User Services Quarterly 55, no. 2 (December 16, 2015): 179. http://dx.doi.org/10.5860/rusq.55n2.179a.

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Rochon is an Associate Professor of Economics, at Laurentian University, in Ontario, Canada, where he is Director of the International Economic Policy Institute. His areas of research include monetary theory and policy, financialization, and post-Keynesian economics. Rossi, is a Full Professor of Economics at the University of Fribourg, Switzerland, where he holds the Chair of Macroeconomics and Monetary Economics, and Senior Research Associate at the International Economic Policy Institute at Laurentian University in Canada. The two editors have co-authored several articles together and now have edited this reference work.

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Wray, L. Randall. "The Monetary Macroeconomics of Dudley Dillard." Journal of Economic Issues 27, no. 2 (June 1993): 547–60. http://dx.doi.org/10.1080/00213624.1993.11505437.

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JENSEN, HENRIK, PETER NORMAN SØRENSEN, and HANS JØRGEN WHITTA-JACOBSEN. "INTRODUCTION TO SPECIAL ISSUE: DYNAMIC MACROECONOMIC THEORY." Macroeconomic Dynamics 12, S1 (April 2008): 1. http://dx.doi.org/10.1017/s1365100507070113.

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This issue collects 11 articles at the frontier of the field of Dynamic Macroeconomic Theory.A majority of the articles discuss theoretical issues related to monetary policy. Many rich economies have now enjoyed a long period of stable monetary conditions, but many researchers remain puzzled as to what are the main mechanisms driving monetary stability. The field is of great importance to policymakers, and this issue's dynamic approaches will advance the debate. The other articles touch on other, equally inherently dynamic issues of macroeconomics, relating to growth, business cycles, and the role of credit. In light of the hard constraints we imposed on the length of the contributed articles, we will let the articles speak for themselves, and hope that the reader will enjoy this research sample as much as we do.

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Spotton Visano, Brenda. "Gendering Post-Keynesian Monetary Macroeconomics With Situated Knowledge." Review of Radical Political Economics 49, no. 4 (July 17, 2017): 567–73. http://dx.doi.org/10.1177/0486613417703661.

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This paper suggests that the conception of fundamental uncertainty grounding post-Keynesian monetary macroeconomics is consistent with a particularly complex type of decision making characterized by the social determination of preferences and outcomes. Contrary to the argument that positivism grounds post-Keynesian analysis, such a framework of analysis reflects a world in which knowledge is situated. As a practical consideration, this paper considers briefly the implications for a gendered theory of financial instability in a Post-Keynesian monetary framework.

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Chari, V. V., and Patrick J. Kehoe. "Modern Macroeconomics in Practice: How Theory Is Shaping Policy." Journal of Economic Perspectives 20, no. 4 (August 1, 2006): 3–28. http://dx.doi.org/10.1257/jep.20.4.3.

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Over the last three decades, macroeconomic theory and the practice of macroeconomics by economists have changed significantly—for the better. Macroeconomics is now firmly grounded in the principles of economic theory. We focus on the role of economic theory in shaping policy. Over the last several decades, the United States and other countries have undertaken a variety of policy changes that are precisely what macroeconomic theory of the last 30 years suggests. The evidence that theoretical advances have had a significant effect on the practice of policy is often hard to see for policymakers and advisers involved in the hurly-burly of day-to-day policymaking, but easy to see if one steps back and takes a longer-term perspective. Examples of the effects of theory on the practice of policy include increased central bank independence; adoption of inflation targeting and other rules to guide monetary policy; increased reliance on consumption and labor taxes instead of capital income taxes; and increased awareness of the costs of policies that distort labor markets.

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ANDERSEN, THOMAS BARNEBECK, and NIKOLAJ MALCHOW-MØLLER. "THE MACROECONOMICS OF A DELAYED RECOVERY FROM THE GLOBAL FINANCIAL CRISIS: A COMPARATIVE APPROACH." Singapore Economic Review 62, no. 05 (December 2017): 1179–94. http://dx.doi.org/10.1142/s0217590815501088.

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This paper compares Denmark's growth performance to that of the other 18 non-Eurozone OECD economies during 2008–2013. Denmark is the only country with a fixed exchange-rate regime; all the other 18 countries have flexible exchange rates, mostly as part of an inflation-targeting (IT) framework. At the same time, Denmark is the worst growth performer of all. Our analysis indicates that the lack of monetary policy independence is central to understanding the meager Danish performance. Monetary easing during 2008–2009 is an important predictor of economic growth during 2008–2013, and Denmark, having outsourced monetary policy to the ECB, did not pursue monetary easing as aggressively as most other countries. In fact, the Danish Central Bank was forced to raise its policy interest rate in 2008Q4 in order to defend the euro-peg. Overall, the Danish experience serves as a reminder that fixed exchange rates can be quite taxing on economic growth in the aftermath of a huge negative shock.

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TUTULMAZ, Onur. "Including the monetary part in macro accounting: A ‘modern’ approach to the macroeconomic accounting." Journal of Economic Development, Environment and People 3, no. 4 (December 20, 2014): 87. http://dx.doi.org/10.26458/jedep.v3i4.83.

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Economic output is placed at the heart of the macroeconomics. To calculate the output one needs to achieve simplifying a high level complexity of economic relationships to form a system. On the flip side, the model should be enough elaborated to be able to reflect the important relationships. In this manner, the classical macroeconomic identity as Keynes suggested is simple enough to understand the main elements but it does not show the financial parts of transactions. Not having the monetary part of the economy it lacks the coherence. With the financial and economic crises getting more frequent, more endeavour to build a more inclusive and coherent macroeconomic system has been observed. However, there are large variety in different options of simplifying and simulating complex relationships among the real and monetary part of the modern economies. Our paper tries to set an analysis comparing some of the recent prominent ideas in building balance sheet and transaction flow matrix in regard to macroeconomic accounting system. We can conclude the new achievement of including the monetary transactions in the frame causes a compromise from the simplicity for a coherent and more complete picture of macro economy.

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Prascevic, Aleksandra. "The return to keynesianism in overcoming cyclical fluctuations?" Ekonomski anali 53, no. 177 (2008): 30–58. http://dx.doi.org/10.2298/eka0877030p.

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The problems faced by the American economy in the second half of 2007, which intensified in 2008, have once again asked economic science, and even more so economic policy, questions relating to business cycles - the reasons for cyclical fluctuations, the character of business cycles and, naturally, economic policy measures that can be implemented to alleviate and overcome an economic recession. Since the 1970s, business cycle theories have been intensively developed - ranging from monetary theories, developed within monetarism and the first phase of New Classical Macroeconomics, to the real business cycle theory of New Classical Macroeconomics. Consequently, the triggers for the beginning of a cycle can be monetary (monetary theories) or real in the form of technological shocks (real business cycles). In essence economic policy conducted since the 1970s, has rejected the Keynesian explanations of the functioning of the economic system, and thus the policy of aggregate demand management. However, the measures that are now being implemented in the USA point to a return to Keynesianism. This refers, above all, to attempts to compensate for the inefficiency of monetary policy with fiscal expansion. All three psychological propensities (propensity to consume, propensity to invest and liquidity preference) in Keynes's theory and applied in Keynesian economic policy, are still the significant determinants of monetary and fiscal policies. The return to Keynesianism points to the depth of the crisis faced by the USA, but also confirms the vitality of Keynesian economics and affirms the view that - although Keynes wished to present his theory as being "general" - it is actually the theory of economic depression.

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Rowthorn, Robert. "The Godley-Tobin lecture." Review of Keynesian Economics 8, no. 1 (January 22, 2020): 1–20. http://dx.doi.org/10.4337/roke.2020.01.01.

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This paper surveys some of the main developments in macroeconomics since the anti-Keynesian counter-revolution 40 years ago. It covers both mainstream and heterodox economics. Amongst the topics discussed are: New Keynesian economics, Modern Monetary Theory, expansionary fiscal contraction, unconventional monetary policy, the Phillips curve, hysteresis, and heterodox theories of growth and distribution. The conclusion is that Keynesian economics is alive and well, and that there has been a degree of convergence between heterodox and mainstream economics.

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Romer, David. "Keynesian Macroeconomics without the LM Curve." Journal of Economic Perspectives 14, no. 2 (May 1, 2000): 149–70. http://dx.doi.org/10.1257/jep.14.2.149.

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Changes in both the macroeconomy and in macroeconomics suggest that the IS-LM-AS model is no longer the best baseline model of short-run fluctuations for teaching and policy analysis. This paper presents an alternative model that replaces the assumption that the central bank targets the money supply with an assumption that it follows a simple interest rate rule. The resulting model is simpler, more realistic, and more coherent than IS-LM-AS, not just in its treatment of monetary policy but in many other ways. The paper also discusses other alternatives to IS-LMAS.

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Listokin, Yair, and Daniel Murphy. "Macroeconomics and the Law." Annual Review of Law and Social Science 15, no. 1 (October 13, 2019): 377–96. http://dx.doi.org/10.1146/annurev-lawsocsci-032719-110419.

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This article surveys recent work on the role of law in determining economic aggregates such as gross domestic product, unemployment, inflation, and productivity growth. We provide a brief overview of macroeconomics and discuss how legal interventions and institutional arrangements such as monetary, fiscal policy, financial regulation, and other legal changes can stabilize business cycles. Finally, we discuss the role of the law in promoting economic growth.

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SNOWDON, BRIAN. "OUTSIDE THE MAINSTREAM: AN INTERVIEW WITH AXEL LEIJONHUFVUD." Macroeconomic Dynamics 8, no. 1 (January 30, 2004): 117–45. http://dx.doi.org/10.1017/s1365100503030050.

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Axel Leijonhufvud made an enormous impact on macroeconomics in the late 1960s with the publication of his bookOn Keynesian Economics and the Economics of Keynes: A Study of Monetary Economics(1968). In this famous book, Leijonhufvud argued that the standard neoclassical synthesis (Hicks–Hansen IS-LM) interpretation of the General Theory totally misunderstood and misinterpreted Keynes. However, during the 1970's, interest in Keynes and Keynesian models waned as new classical equilibrium models became all the rage. Nevertheless, Leijonhufvud, from a position outside the mainstream, continued his research into problems of unemployment, business cycles, and inflation—issues that from his perspective are problems of coordination failure in complex dynamical systems. Axel Leijonhufvud is currently Professor Emeritus at the University of California, Los Angeles, and, since 1995, Professor of Monetary Economics at the University of Trento, Italy. In this interview the author discusses with Leijonhufvud a wide range of issues relating to his own work as well as his views on the development of macroeconomics after Keynes.

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Goodhart, Charles. "Whatever Became of the Monetary Aggregates?" National Institute Economic Review 200 (April 1, 2007): 56–61. http://dx.doi.org/10.1177/0027950107080389.

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My title intentionally harks back to Maurice Peston's slim, but excellent, 1980 book, entitled Whatever Happened to Macro-economics. In this book, a compilation of three lectures, Maurice asks how much then remained of traditional Keynesian macroeconomics in the aftermath of the monetarist counter-revolution, and of the development of Lucasian rational expectations. Maurice was much more impressed by the new contributions of the rational expectations school than he was of those by the more traditional monetarists.

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Henning, C. Randall. "Systemic Conflict and Regional Monetary Integration: The Case of Europe." International Organization 52, no. 3 (1998): 537–73. http://dx.doi.org/10.1162/002081898550653.

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Existing explanations of European monetary integration, emphasizing economic interdependence, issue linkage, institutions, and domestic politics, take a predominantly regional approach. In the international monetary thesis developed here, I argue that U.S. policy disturbances, transmitted through the international monetary system, created compelling incentives for European states to cooperate on exchange-rate and monetary policy. I develop a general theory of macroeconomic power, based on open economy macroeconomics, and show how the exercise of such influence can drive regional monetary integration. This article then tests the international thesis with reference to monetary integration within the European Union by examining four periods in which the United States acted to stabilize the international monetary system and seven episodes in which it disrupted the system. European governments and central banks reduced regional monetary cooperation when the United States supported system stability and strengthened it after each episode of disruption. The evidence thus strongly supports the inference that the link is causal.

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Makrevska, Trajanka, and Gorica Popovska Nalevska. "MONETARY POLICY IN SMALL OPEN ECONOMY." Knowledge International Journal 28, no. 1 (December 10, 2018): 143–46. http://dx.doi.org/10.35120/kij2801143m.

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Money and stabilization are the central problems of macroeconomics and macroeconomic policy today. Since the Great Depression money policy has been getting significant meaning. Dirigible money is created in the true sense of the word, i.e. money that is fully subordinated to the purposes of the national economic policy.By leaving the automatism of the golden rule regarding the mechanism of the monetary regulation, not just inside the economy but also in the external economy, it led to taking over the responsibility of the state for the development of internal monetary situation and a system of international payment relations, i. e. external liquidity of the economy. The state takes over directly (with the Central bank) the responsibility for the monetary credit policy in general, for the regulation of money supply, and also for the regulation of the basic commodity-money relations inside the economy, the stability of the economy, prices and the exchange rate. Is monetary policy able to substantially support development, especially in small open economy? Yes. Adequate liquidity with relative price stability, credible monetary institutions and a high degree of confidence in the domestic currency and financial institutions and markets are one of the pillars of sustainable economic development. Small open economies are still far from these standards and still much can be improved.

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ROCHON, LOUIS-PHILIPPE, and SERGIO ROSSI. "Inflation targeting, economic performance, and income distribution: a monetary macroeconomics analysis." Journal of Post Keynesian Economics 28, no. 4 (July 1, 2006): 615–38. http://dx.doi.org/10.2753/pke0160-3477280405.

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Valcarcel, Victor J. "Instituting a Monetary Economy in a Semester-Long Macroeconomics Course." Journal of Economic Education 44, no. 2 (April 2013): 129–41. http://dx.doi.org/10.1080/00220485.2013.770337.

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Croushore, Dean, and Hossein S. Kazemi. "Teaching courses in macroeconomics and monetary policy with Bloomberg analytics." Journal of Economic Education 50, no. 2 (March 29, 2019): 108–28. http://dx.doi.org/10.1080/00220485.2019.1582383.

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Alvarez, Fernando, Francesco Lippi, and Aleksei Oskolkov. "The Macroeconomics of Sticky Prices with Generalized Hazard Functions." Quarterly Journal of Economics 137, no. 2 (November 8, 2021): 989–1038. http://dx.doi.org/10.1093/qje/qjab042.

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Abstract We give a full analytic characterization of a large class of sticky-price models where the firm’s price-setting behavior is described by a generalized hazard function. Such a function allows for a vast variety of empirical hazards to be fitted. This setup is microfounded by random adjustment costs, as in Caballero and Engel (1999), or by information frictions, as in Woodford (2009). We establish two main results. First, we show how to identify all the primitives of the model, including the distribution of the fundamental adjustment costs and the implied generalized hazard function, using the distribution of price changes. Second, we derive a sufficient statistic for the aggregate effect of a monetary shock: given an arbitrary generalized hazard function, the cumulative impulse response of output to a once-and-for-all monetary shock is proportional to the ratio of the kurtosis of the steady-state distribution of price changes over the frequency of price adjustment. We prove that Calvo’s model yields the upper bound and Golosov and Lucas’s model the lower bound on this measure in the class of random menu cost models.

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Klein, Michael W., and Jay C. Shambaugh. "Rounding the Corners of the Policy Trilemma: Sources of Monetary Policy Autonomy." American Economic Journal: Macroeconomics 7, no. 4 (October 1, 2015): 33–66. http://dx.doi.org/10.1257/mac.20130237.

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A central result in international macroeconomics is that a government cannot simultaneously opt for open financial markets, fixed exchange rates, and monetary autonomy; rather, it is constrained to choosing no more than two of these three. This paper considers whether partial capital controls and limited exchange rate flexibility allow for full monetary policy autonomy. We find partial capital controls do not generally allow for greater monetary control than with open capital accounts, unless they are quite extensive, but a moderate amount of exchange rate flexibility does allow for some degree of monetary autonomy, especially in emerging and developing economies. (JEL E52, F32, F33)

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Whalen, Charles J. "Symposium on the Monetary Macroeconomics of John R. Commons." Journal of Economic Issues 54, no. 4 (October 1, 2020): 903–6. http://dx.doi.org/10.1080/00213624.2020.1816115.

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Humphrey, Thomas M., and O'Brien (D P.). "Thomas Joplin and Classical Macroeconomics: A Reappraisal of Classical Monetary Thought." Economic Journal 104, no. 425 (July 1994): 979. http://dx.doi.org/10.2307/2235007.

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Clark, William Roberts, and Mark Hallerberg. "Mobile Capital, Domestic Institutions, and Electorally Induced Monetary and Fiscal Policy." American Political Science Review 94, no. 2 (June 2000): 323–46. http://dx.doi.org/10.2307/2586015.

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The literature on global integration and national policy autonomy often ignores a central result from open economy macroeconomics: Capital mobility constrains monetary policy when the exchange rate is fixed and fiscal policy when the exchange rate is flexible. Similarly, examinations of the electoral determinants of monetary and fiscal policy typically ignore international pressures altogether. We develop a formal model to analyze the interaction between fiscal and monetary policymakers under various exchange rate regimes and the degrees of central bank independence. We test the model using data from OECD countries. We find evidence that preelectoral monetary expansions occur only when the exchange rate is flexible and central bank independence is low; preelectoral fiscal expansions occur when the exchange rate is fixed. We then explore the implications of our model for arguments that emphasize the partisan sources of macroeconomic policy and for the conduct of fiscal policy after economic and monetary union in Europe.

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Krawczyk, Marcin. "O problemie skuteczności polityki fiskalnej i pieniężnej." Kwartalnik Kolegium Ekonomiczno-Społecznego. Studia i Prace, no. 2 (December 5, 2015): 11–28. http://dx.doi.org/10.33119/kkessip.2015.2.1.

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The article reviews theoretical analyses of effectiveness of fiscal and monetary policies. The first part concentrates on classical and new classical arguments on ineffectiveness of fiscal and monetary stimulus, i.e. proving that the stimulus does not influence real economic aggregates. These arguments include laissez-fairedoctrine and rational expectations, aggregate supply, and continuous market clearing hypotheses. The second part contains detailed description of adjustment processes brought about by fiscal and monetary expansions considered by contemporary theorists (e.g. D. Elmendorf and G. N. Mankiw) as “conventional macroeconomics”. These processes serve as theoretical argument in favor of a monetary accommodation of fiscal expansion. The third part forms a concise review of macroeconomic concepts which show that conventional adjustment process can be interrupted or even stopped during any of their phases (ricardian equivalencetheorem, Friedman's money illusion liquidity trap, investment insensitivity, Tobin's crowding out effect). In the final part, the author points out that monetary accommodation can weaken effectiveness of fiscal expansion.

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Taresh A., Abdulrahman, Dyah Wulan Sari, and Rudi Purwono. "Joint Determinants of Monetary, Macroeconomic, Social and Income Inequality." Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan 21, no. 2 (December 30, 2020): 134–60. http://dx.doi.org/10.23917/jep.v21i2.11254.

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This study discusses all the potential relationships between monetary, macroeconomic, social and income inequality in an integrated manner by making Indonesia a concrete case study. This empirical study discussed the relationship based on theoretical modelling and carried out through appropriate estimators applied to the data of 33 provinces in Indonesia. To achieve this objective, the simultaneous model of seemingly unrelated regressions (SUR) was used. The results concluded that there are variables that jointly determined the monetary, macroeconomic and social also income inequality. Like, consumption can increase inflation and macroeconomic while at the same time can reduce population growth and human development, and increases income inequality. Savings which determine credit also pushes macroeconomics while simultaneously increasing population growth, and it can reduce income inequality. Minimum wages can reduce inflation and encourage production growth, while increases human development and reduces population growth also can reduce income inequality. Unemployment can also reduce inflation and increase economic growth, at the same time reduces population growth and human development while increases income inequality. Education and health encourages economic growth and the level of human development then can reduce income inequality.

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Foote, Christopher L. "Macroeconomics and Monetary Economics: The Redistribution Recession: How Labor Market Distortions Contracted the Economy." Journal of Economic Literature 51, no. 4 (December 1, 2013): 1194–98. http://dx.doi.org/10.1257/jel.51.4.1183.r6.

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Christopher L. Foote of Federal Reserve Bank of Boston reviews, “The Redistribution Recession: How Labor Market Distortions Contracted the Economy” by Casey B. Mulligan. The Econlit abstract of this book begins: “Explores the decline of employment in the United States after the financial crisis and its failure to recover and considers the role of economic activity and public policy. Discusses the rise of labor productivity; the expanding social safety net; supply and demand—labor market consequences of safety net expansions; means-tested subsidies and economic dynamics since 2007; cross-sectional patterns of employment and hours changes; Keynesian and other models of safety net stimulus; recession-era effects of factor supply and demand—evidence from the seasonal cycle, the construction market, and minimum wage hikes; incentives and compliance under the federal mortgage modification guidelines; and uncertainty, redistribution, and the labor market. Mulligan is Professor of Economics at the University of Chicago.”

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Skaggs, N. T. "Thomas Joplin and Classical Macroeconomics: A Reappraisal of Classical Monetary Thought." History of Political Economy 27, no. 1 (January 1, 1995): 209–11. http://dx.doi.org/10.1215/00182702-27-1-209.

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Mohan, Deepanshu. "The macroeconomics of "Oil Prices" and "Economic Shocks": Lessons from the 1970s." Risk Governance and Control: Financial Markets and Institutions 5, no. 4 (2015): 79–90. http://dx.doi.org/10.22495/rgcv5i4art7.

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This paper examines the relationship between oil price shocks and recessions and focuses particularly on the period of stagflation in the 1970s. Nearly every recession in the U.S. since WWII has been preceded by an oil price shock, and examining the literature as to the causal mechanisms finds there are a range of opinions from supply and demand side factors to the precipitated monetary policy response. Evaluating these across a number of countries finds that the mechanisms at play are complex and disputed. This paper reviews the literature and evaluates the various theories put forward before concluding that whilst oil plays a key role in the economy, the recessions following oil price shocks are more likely to be as a result of monetary policy decisions than the oil price shocks per se.

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40

Kuzheliev, Mykhailo, Dmytro Zherlitsyn, Ihor Rekunenko, Alina Nechyporenko, and Guram Nemsadze. "The impact of inflation targeting on macroeconomic indicators in Ukraine." Banks and Bank Systems 15, no. 2 (May 18, 2020): 94–104. http://dx.doi.org/10.21511/bbs.15(2).2020.09.

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The correlation between macroeconomic dynamics and the inflation rate is the subject of many economic studies. The principles of monetary policy are developed in classical economics studies, which are based on the theories of Keynes, Phillips, Campbell, etc. However, classic approaches require practical validation, especially with regard to modern economic trends in times of crisis and emerging economies. Therefore, the purpose of the paper is to investigate and summarize the impact of inflation targeting and other key monetary policy instruments on fundamental economic indicators in Ukraine during periods of stability and crises. An empirical analysis is based on official statistics from Ukraine for 2011–2019. This study uses econometric methods (multivariate regression and simultaneous equation model), which are applied for the general and transmission impact of inflation on the estimation of economic growth. The results prove that inflation does not affect (less than 0.46 linear correlation) fundamental economic indicators during periods of real GDP growth and a quarterly CPI level of less than 2%. On the other hand, there are significant simultaneous regressions (more than 0.8 coefficients of determination) between unemployed, spending on real final consumption, hryvnia exchange rate and monetary policy instruments (discount rate, international reserves, amount of government bonds, M3 monetary aggregate) for periods when the quarterly CPI (consumer price index) is more than 2%. Therefore, the traditional monetary policy implications are discussed for emerging economies.

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41

Waluyo, Joko. "PENGARUH PEMBIAYAAN DEFISIT ANGGARAN TERHADAP INFLASI DAN PERTUMBUHAN EKONOMI: SUATU SIMULASI MODEL EKONOMI MAKRO INDONESIA 1970 – 2003." KINERJA 10, no. 1 (January 26, 2017): 1–22. http://dx.doi.org/10.24002/kinerja.v10i1.915.

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The objective of this research is to identify the impact of budget deficit financing oninflation and economic growth. Simulation are conducted using the small open macroeconomics model specified by Waluyo (2005) with 10.000 replication on the stochastic simulation. Using the secondary data of the Indonesian economy from 1970 to 2003, simulation results show that budget deficit financing from foreign debt and monetary policies would increase the economic growth, but inflationary. On the other hand, tax effort policies are considered to be better, since simulation results show that they would improve economic growth without being inflationary.Keywords: budget deficit, macroeconomic model, economic growth, simulation

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Garnaut, R. "Is Macroeconomics Dead? Monetary and Fiscal Policy in Historical Context." Oxford Review of Economic Policy 21, no. 4 (December 1, 2005): 524–31. http://dx.doi.org/10.1093/oxrep/gri030.

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Pedrosa, Ítalo, and Maryse Farhi. "Macroeconomic theory in the aftermath of the crisis: mainstream and new Keynesianism." Nova Economia 25, no. 2 (August 2015): 237–60. http://dx.doi.org/10.1590/0103-6351/1737.

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Abstract: The failure of mainstream macroeconomics to provide a suitable set of instruments to understand and fight against the economic crisis has triggered a debate among the dominant theoretical tendency, on its own foundations and on the macroeconomic policy that should be implemented after the crisis. The aim of this paper is to investigate to what extent the crisis affected mainstream macroeconomic theory and policy guidelines. We argue that new Keynesians did not pass unharmed by the crisis, themselvesacknowledging the need to adapt their models through the incorporation of new variables and ideas. The main change is the recognition of the non-neutrality of the financial system, which calls into question monetary policy guided by one instrument, the short-term interest rate, and by one target, the inflation rate, which would be insufficient to simultaneously lead to a stable and near potential output growth whilemaintainingthe stability of the financial system.

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Lawn, Philip A. "On Heyes' IS–LM–EE proposal to establish an environmental macroeconomics." Environment and Development Economics 8, no. 1 (December 23, 2002): 31–56. http://dx.doi.org/10.1017/s1355770x03000032.

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A decade has now passed since Daly made a plea for an environmental macroeconomics. Despite an expanding literature on ‘green’ national accounting and the efforts of ecological economists to measure the sustainable net benefits of a growing macroeconomy, it is only recently that Daly's plea has been adequately answered. This has been achieved with the incorporation by Heyes of an ‘environmental equilibrium’ or EE curve into the familiar IS–LM model. However, the IS–LM–EE model proposed by Heyes is incomplete. By extending Heyes' model to include the role of technological progress and the sustainable net benefits of economic activity, this paper shows that conclusions regarding the desirability of expansionary fiscal and monetary policies alter quite radically. Moreover, it sends out a clear message that environmental concerns should be incorporated into macroeconomic models. They should not be solely confined to microeconomics.

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Taresh A., Abdulrahman, Dyah Wulan Sari, and Rudi Purwono. "Analysis of The Relationship among Macroeconomics, Monetary and Income Inequality." Economics Development Analysis Journal 9, no. 4 (November 6, 2020): 427–42. http://dx.doi.org/10.15294/edaj.v9i4.38946.

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Income inequality in Indonesia remains a controversial issue in the context of Indonesian macroeconomic condition that is evolving in output and government spending, and its increase in consumption accompanied by inflation and slowing of bank credit. The purpose of this study is to investigate the relationship among macroeconomics, monetary and income inequality through a broad theoretical model by adopting a panel Structural Vector Auto-regression (SVAR) model to get more sample size during the period 2005-2018 at 33 provinces in Indonesia. The main results indicate that the variables of output and inflation have positive relationships. The relationship between output and income inequality is also significantly correlated, and those results supported by Kuznets's theory reveal that the relationship between economic growth and income inequality is positive in the short term. The relationship between inflation and income inequality is positive as well in Indonesia. This result is by the fact that low-income families are considered more vulnerable to inflation. The impact of non-food consumption shocks increases income inequality, while Indonesian government spending and bank credit shocks reduce income inequality. Then the response of savings and bank credit to the shock of income inequality is positive.

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Malik, Wasim Shahid, and Ather Maqsood Ahmed. "Taylor Rule and the Macroeconomic Performance in Pakistan." Pakistan Development Review 49, no. 1 (March 1, 2010): 37–56. http://dx.doi.org/10.30541/v49i1pp.37-56.

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A near-consensus position in modern macroeconomics is that policy rules have greater advantage over discretion in improving economic performance. For developing countries in particular, simple instrument rules appear to be feasible options as pre-requisites since more sophisticated targeting rules are generally lacking. Using Pakistan’s data, this study has attempted to estimate the Taylor rule and use it as monetary policy strategy to simulate the economy. Our results indicate that the State Bank of Pakistan (SBP) has not been following the Taylor rule. In fact, the actual policy has been an extreme deviation from it. On the other hand, counterfactual simulation confirms that macroeconomic performance could have been better in terms of stability of inflation and output, had the Taylor rule been adopted as monetary policy strategy. The study also establishes that further gains are possible if the parameter values of the rule are slightly modified. JEL classification: E47, E31, E52 Keywords: Taylor Rule, Macroeconomic Performance, Counterfactual Simulation

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Coppola, Frances. "The political economy of inflation." European Journal of Economics and Economic Policies: Intervention 18, no. 3 (December 1, 2021): 331–43. http://dx.doi.org/10.4337/ejeep.2021.03.07.

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For the last 40 years, macroeconomics has been dominated by Milton Friedman’s view that inflation occurs when the supply of money rises more quickly than economic output – ‘too much money chasing too few goods’, as the saying goes. If inflation is always due to an imbalance of money supply and output, central banks alone determine the path of inflation, and fiscal policy merely has a redistributive function. This paper draws on historical and empirical evidence as well as recent theoretical literature to show that this view is mistaken. Monetary policy has redistributive effects, and fiscal policy affects the money supply. It is therefore impossible to separate them in practice. Both fiscal and monetary policy have inflationary consequences, and because their distributional effects are different, monetary policy cannot fully offset fiscal decisions. Fiscal and monetary policy are influenced by political decisions and are themselves political in nature. Since inflation reflects spending and saving patterns which are affected by political choices, it is fundamentally a political phenomenon.

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Juselius, Katarina. "Searching for a Theory That Fits the Data: A Personal Research Odyssey." Econometrics 9, no. 1 (February 1, 2021): 5. http://dx.doi.org/10.3390/econometrics9010005.

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This survey paper discusses the Cointegrated Vector AutoRegressive (CVAR) methodology and how it has evolved over the past 30 years. It describes major steps in the econometric development, discusses problems to be solved when confronting theory with the data, and, as a solution, proposes a so-called theory-consistent CVAR scenario. A number of early CVAR applications are motivated by the urge to find out why the empirical results did not support Milton Friedman’s concept of monetary inflation. The paper also proposes a method for combining partial CVAR analyses into a large-scale macroeconomic model. It argues that an empirically-based approach to macroeconomics preferably should be based on Keynesian disequilibrium economics, where imperfect knowledge expectations replace so called rational expectations and where the financial sector plays a key role for understanding the long persistent movements in the data. Finally, the paper argues that the CVAR is potentially a candidate for Haavelmo’s “design of experiment for passive observations” and provides several illustrations.

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Alzyadat, Jumah Ahmad. "Public Debt Management and Macroeconomics Policies Coordination: Evidence from Jordan." Revista Amazonia Investiga 9, no. 36 (January 29, 2021): 59–72. http://dx.doi.org/10.34069/ai/2020.36.12.5.

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This study aimed to analyze the effects of fiscal and monetary policies interactions on public debt in Jordan during (1970 – 2019). Using Vector Error Correction Model (VECM) derived from VAR (Vector Auto regression), and examine dynamic interactions between economic variables over time, by Appling Impulse Response Function, and Variance Decomposition. The results indicated that the fiscal policy instruments affect public debt in two different directions, the expansion of government expenditure positively affect public debt, while tax revenues reduce indebtedness. The monetary policy instruments affect public debt in the same directions, as the results indicated that the central bank in controlling money supply and managing interest rate helps the fiscal authority in reducing the public debt in Jordan. The results confirm the strongest impact of government expenditure on public debt in Jordan. The study recommends the necessity of rationalizing government expenditures and combating tax evasion. In addition, more coordination between fiscal and monetary policies.

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Neupauerová, Marianna. "The optimal monetary rule for the Slovak republic." Panoeconomicus 53, no. 1 (2006): 79–87. http://dx.doi.org/10.2298/pan0601079n.

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The optimal monetary rules should help to economic agents to fortify their anticipation about monetary policy. At the same time they should make application of monetary policy by central bank more effective. Consequently numerous central banks as well as other economic agents try to determinate an optimal monetary rule responding to given macroeconomic conditions. However this can be very difficult especially for transition economies or post-transition countries. This is the case of the Slovak Republic; its time series are relatively short and macroeconomic environment has to face different shocks. Thus, a monetary rule should be just some kind of recommendation for monetary authority that does not have to be followed as a binding commitment.

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Journal articles on the topic 'E Macroeconomics and monetary economics'

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