Sunday, December 15, 2013
- Types of economicpolicy
○ Micro and macro
Types of macroeconomicpolicy
□ Keynesian: Simple model C+I+G; multiplier
□ Monetary: Interest rates, money supply
- Who Makes EconomicPolicy?
○ President with help of OMB
○ Congress - with since 1970smore help especially from CBO
○ Federal Reserve: Who elects them?
- Rise and Fall of Keynes
○ Dominant tradition in economicsdepartment by 1960s, Nixon 1971:"I am now a Keynesian"
○ Problemswith Keynesian economicsgenerally…
Fuzzy data; biased towards spending?
○ Most gov't spending not easily controlled
○ Globalization; economiesnot self-contained
- Problemswith Keynes in US
○ Suspicion of government
○ Separation of power, illustration; negotiations on the deficit
- Rise and fall of monetarypolicy