Macroeconomic policy mix in the transatlantic economy

Moreno Bertoldi, Philip R. Lane, Valérie Rouxel-Laxton, Paolo Pesenti 24 October 2014

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The reason why the macroeconomic policy mix has been different on the two sides of the Atlantic in recent years remains a hotly debated issue. Was it due to a different reading of the root causes of the Global Crisis and, therefore, of the type of policy response considered most appropriate?

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Topics:  Global crisis Macroeconomic policy

Tags:  eurozone, US, macroeconomic policy, transatlantic economy, global crisis

What macroeconomic policies for the Eurozone?

Francesco Giavazzi, Guido Tabellini 25 September 2014

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In his recent article on Vox, Roberto Perotti takes issue with the proposal of coordinating a monetary and fiscal expansion in the Eurozone through a money-financed temporary tax cut, which we advocated in a column on 21 August (see Perotti 2014, Giavazzi and Tabellini 2014). He does not question the effectiveness of the proposal in stimulating aggregate demand.

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Topics:  Macroeconomic policy Monetary policy

Tags:  eurozone, Eurozone economy, macroeconomic policy, Budget deficit, fiscal expansion

Rethinking macroeconomic policy: Getting granular

Olivier Blanchard, Giovanni Dell'Ariccia, Paolo Mauro 31 May 2013

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The global economic crisis has kept forcing policymakers and academics to rethink macroeconomic policy. First was the Lehman crisis, which showed how much they had underestimated the dangers posed by the financial system, and the limits of monetary policy. Then it was the euro crisis, which forced them to rethink the workings of currency unions, and fiscal policy. And, throughout, they have had to improvise, from the use of unconventional monetary policies, to the initial fiscal stimulus, to the speed of fiscal consolidation, to the use of macroprudential instruments.

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Topics:  Global crisis

Tags:  macroeconomic policy

Solving the macroeconomic policy challenge in Europe

Richard Wood 19 December 2012

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Countries in Europe are either slipping into recession or experiencing worsening depression. Economies are headed in the wrong direction, and the malaise is spreading. The current orthodoxies are failing.

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Topics:  Macroeconomic policy

Tags:  Subprime, debt, macroeconomic policy, quantitative easing

Did the Indian capital controls work as a tool of macroeconomic policy?

Ila Patnaik, Ajay Shah 20 November 2012

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The empirical literature on the effectiveness of capital controls for macroeconomic management has generally found that transitory capital controls have a relatively limited impact on the magnitude of flows (Magud et. al. 2011). Controls appear to influence the composition of capital flows, but they seem to do so only for a short time. Often, economic agents can find ways to circumvent controls, particularly those on specific types of flows.

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Topics:  Macroeconomic policy

Tags:  India, capital flows, macroeconomic policy, capital controls

Jackson Hole, the crisis and policy responses: A new orthodoxy

Richard Wood 31 August 2012

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Demand, output, manufacturing activity and exports are weakening in many parts of the industrialised world. Quantitative easing policies have generally run their course, as interest rates are at the zero bound or thereabouts. In the Eurozone it is questionable whether the ‘one-size-fits-all’ policy interest rate approach is helpful or meaningful, or whether it can be sustained. In those countries suffering the worst collapse in GDP, authorities are applying draconian ‘fiscal austerity’ policies.

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Topics:  Global crisis Macroeconomic policy

Tags:  global crisis, macroeconomic policy, Eurozone crisis

The future of macroeconomic policy: Nine tentative conclusions

Olivier Blanchard 23 March 2011

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The global economic crisis forces us to question our most cherished beliefs about the way we conduct macroeconomic policy. With this in mind, I have just organised, together with David Romer, Joe Stiglitz, and Michael Spence, a conference at the IMF on "Rethinking macroeconomic policy”.

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Topics:  Macroeconomic policy

Tags:  monetary policy, fiscal policy, macroeconomic policy

International macro-finance

Anna Pavlova, Roberto Rigobon 15 February 2011

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Financial markets and their role in international risk sharing have inspired a vast body of theoretical literature. Over the past 40 years, international finance and economics has evolved into a vibrant field spreading from the basic international version of the capital asset pricing model to some of the most sophisticated dynamic stochastic general equilibrium models.

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Topics:  Frontiers of economic research International finance

Tags:  financial regulation, macroeconomic policy, international macro finance

Automatic stabilisers and the economic crisis in Europe and the US

Mathias Dolls, Clemens Fuest, Andreas Peichl 17 September 2010

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The big difference between the "great recession" and the "Great Depression" was government policy – especially stabilisation policy (Eichengreen and O'Rourke 2010). This time governments realised that they had to provide Keynesian stimulus while ensuring that the financial system did not collapse.

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Topics:  Global crisis Macroeconomic policy

Tags:  fiscal stimulus, global crisis, macroeconomic policy, automatic stabilisers

Using states for macroeconomic fiscal policy

Robert P Inman 15 September 2010

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The recession of 2007 is perhaps the deepest, longest, and most damaging economic event of the last 75 years. In response, all tools of macroeconomic policy management were called into use: from direct easing of interest rates and purchasing of public and private debt to tax cuts and government spending. There is every reason to think that this across-the-line defence was necessary to prevent a major recession from turning into what might have been a worldwide depression.

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Topics:  Global crisis Macroeconomic policy Politics and economics

Tags:  fiscal stimulus, global crisis, macroeconomic policy

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