宏觀經(jīng)濟(jì)學(xué)曼昆版PPT82962280

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FINALTHOUGHTS36FiveDebatesOverMacroeconomicPolicyFiveDebatesoverMacroeconomicPolicy1. Shouldmonetaryandfiscalpolicymakerstrytostabilizetheeconomy?2. Shouldmonetarypolicybemadebyruleratherthanbydiscretion?3. Shouldthecentralbankaimforzeroinflation?4. Shouldthegovernmentbalanceitsbudget?5. Shouldthetaxlawsbereformedtoencouragesaving?1. Shouldmonetaryandfiscalpolicymakerstrytostabilizetheeconomy?Pro:PolicymakersshouldtrytostabilizetheeconomyTheeconomyisinherentlyunstable,andleftonitsownwillfluctuate.Policycanmanageaggregatedemandinordertooffsetthisinherentinstabilityandreducetheseverityofeconomicfluctuations.Pro:PolicymakersshouldtrytostabilizetheeconomyThereisnoreasonforsocietytosufferthroughtheboomsandbustsofthebusinesscycle.Monetaryandfiscalpolicycanstabilizeaggregatedemandand,thereby,productionandemployment.Con:PolicymakersshouldnottrytostabilizetheeconomyMonetarypolicyaffectstheeconomywithlongandunpredictablelagsbetweentheneedtoactandthetimethatittakesforthesepoliciestowork.Manystudiesindicatethatchangesinmonetarypolicyhavelittleeffectonaggregatedemanduntilaboutsixmonthsafterthechangeismade.Con:PolicymakersshouldnottrytostabilizetheeconomyFiscalpolicyworkswithalagbecauseofthelongpoliticalprocessthatgovernschangesinspendingandtaxes.Itcantakeyearstopropose,pass,andimplementamajorchangeinfiscalpolicy.Con:PolicymakersshouldnottrytostabilizetheeconomyAlltoooftenpolicymakerscaninadvertentlyexacerbateratherthanmitigatethemagnitudeofeconomicfluctuations.Itmightbedesirableifpolicymakerscouldeliminatealleconomicfluctuations,butthisisnotarealisticgoal.2. Shouldmonetarypolicybemadebyruleratherthanbydiscretion?Pro:MonetarypolicyshouldbemadebyruleDiscretionarymonetarypolicycansufferfromincompetenceandabuseofpower.Totheextentthatcentralbankersallythemselveswithpoliticians,discretionarypolicycanleadtoeconomicfluctuationsthatreflecttheelectoralcalendar—thepoliticalbusinesscycle.Pro:MonetarypolicyshouldbemadebyruleTheremaybeadiscrepancybetweenwhatpolicymakerssaytheywilldoandwhattheyactuallydo—calledtimeinconsistencyofpolicy.Becausepolicymakersaresooftentimeinconsistent,peopleareskepticalwhencentralbankersannouncetheirintentionstoreducetherateofinflation.Pro:MonetarypolicyshouldbemadebyruleCommittingtheFedtoamoderateandsteadygrowthofthemoneysupplywouldlimitincompetence,abuseofpower,andtimeinconsistency.Con:Monetarypolicyshouldnotbemadebyrule

Animportantadvantageofdiscretionarymonetarypolicyisitsflexibility.Inflexiblepolicieswilllimittheabilityofpolicymakerstorespondtochangingeconomiccircumstances.Con:MonetarypolicyshouldnotbemadebyruleTheallegedproblemswithdiscretionandabuseofpowerarelargelyhypothetical.Also,theimportanceofthepoliticalbusinesscycleisfarfromclear.3. Shouldthecentralbankaimforzeroinflation?Pro:ThecentralbankshouldaimforzeroinflationInflationconfersnobenefittosociety,butitimposesseveralrealcosts.ShoeleathercostsMenucostsIncreasedvariabilityofrelativepricesUnintendedchangesintaxliabilitiesConfusionandinconvenienceArbitraryredistributionofwealthPro:ThecentralbankshouldaimforzeroinflationReducinginflationisapolicywithtemporarycostsandpermanentbenefits.Oncethedisinflationaryrecessionisover,thebenefitsofzeroinflationwouldpersist.Con:ThecentralbankshouldnotaimforzeroinflationZeroinflationisprobablyunattainable,andtogetthereinvolvesoutput,unemployment,andsocialcoststhataretoohigh.Policymakerscanreducemanyofthecostsofinflationwithoutactuallyreducinginflation.4. Shouldfiscalpolicymakersreducethegovernmentdebt?Pro:ThegovernmentshouldbalanceitsbudgetBudgetdeficitsimposeanunjustifiableburdenonfuturegenerationsbyraisingtheirtaxesandloweringtheirincomes.Whenthedebtsandaccumulatedinterestcomedue,futuretaxpayerswillfaceadifficultchoice:Theycanpayhighertaxes,enjoylessgovernmentspending,orboth.Pro:ThegovernmentshouldbalanceitsbudgetByshiftingthecostofcurrentgovernmentbenefitstofuturegenerations,thereisabiasagainstfuturetaxpayers.Deficitsreducenationalsaving,leadingtoasmallerstockofcapital,whichreducesproductivityandgrowth.Con:ThegovernmentshouldnotbalanceitsbudgetTheproblemwiththedeficitisoftenexaggerated.Thetransferofdebttothefuturemaybejustifiedbecausesomegovernmentpurchasesproducebenefitswellintothefuture.Con:ThegovernmentshouldnotbalanceitsbudgetThegovernmentdebtcancontinuetorisebecausepopulationgrowthandtechnologicalprogressincreasethenation’sabilitytopaytheinterestonthedebt.5. Shouldthetaxlawsbereformedtoencouragesaving?Pro:TaxlawsshouldbereformedtoencouragesavingAnation’ssavingrateisakeydeterminantofitslong-runeconomicprosperity.Anation’sproductivecapabilityisdeterminedlargelybyhowmuchitsavesandinvestsforthefuture.Whenthesavingrateishigher,moreresourcesareavailableforinvestmentinnewplantandequipment.Pro:TaxlawsshouldbereformedtoencouragesavingTheU.S.taxsystemdiscouragessavinginmanyways,suchasbyheavilytaxingtheincomefromcapitalandbyreducingbenefitsforthosewhohaveaccumulatedwealth.Pro:TaxlawsshouldbereformedtoencouragesavingTheconsequencesofhighcapitalincometaxpoliciesarereducedsaving,reducedcapitalaccumulation,lowerlaborproductivity,andreducedeconomicgrowth.Pro:TaxlawsshouldbereformedtoencouragesavingAnalternativetocurrenttaxpoliciesadvocatedbymanyeconomistsisaconsumptiontax.Withaconsumptiontax,ahouseholdpaystaxesbasedonwhatitspendsnotonwhatitearns.Incomethatissavedisexemptfromtaxationuntilthesavingislaterwithdrawnandspentonconsumptiongoods.Con:TaxlawsshouldnotbereformedtoencouragesavingManyofthechangesintaxlawstostimulatesavingwouldprimarilybenefitthewealthy.High-incomehouseholdssaveahigherfractionoftheirincomethanlow-incomehouseholds.Anytaxchangethatfavorspeoplewhosavewillalsotendtofavorpeoplewithhighincomes.Con:TaxlawsshouldnotbereformedtoencouragesavingReducingthetaxburdenonthewealthywouldleadtoalessegalitariansociety.Thiswouldalsoforcethegovernmenttoraisethetaxburdenonthepoor.Con:TaxlawsshouldnotbereformedtoencouragesavingRaisingpublicsavingbyeliminatingthegovernment’sbudgetdeficitwouldprovideamoredirectandequitablewaytoincreasenationalsaving.SummaryAdvocatesofactivemonetaryandfiscalpolicyviewtheeconomyasinherentlyunstableandbelievepolicycanbeusedtooffsetthisinherentinstability.Criticsofactivepolicyemphasizethatpolicyaffectstheeconomywithalagandourabilitytoforecastfutureeconomicconditionsispoor,bothofwhichcanleadtopolicybeingdestabilizing.SummaryAdvocatesofrulesformonetarypolicyarguethatdiscretionarypolicycansufferfromincompetence,abuseofpower,andtimeinconsistency.Criticsofrulesformonetarypolicyarguethatdiscretionarypolicyismoreflexibleinrespondingtoeconomiccircumstances.SummaryAdvocatesofazero-inflationtargetemphasizethat