Macroeconomic policies

1
Macroeconomic policies

• A course by Hubert Kempf
• See my webpage!
• http//eurequa/....

2
Macroeconomic policies

• The aim of the course
• Understanding what economic policies can do and
  cannot do in market economies.
• Why? When? How?
• Understanding the current debates.
• What are the degrees of freedom?
• What are the mistakes to avoid?

3
Macroeconomic policies

• Not a standard course à la française .
• Based on cases and experiences, more than
  theories.
• Beware not a pragmatic approach in lieu of a
  theorical one.

4
Macroeconomic policies

• The central role of economic theory,
• And of statistical methods to infirm or
  (cautiously) confirm a stylized fact.
• The enormous advances of economics and the
  ability to shape economic policies.
• Examples the design of the EMU or demand
  policies, following Keynesian economics.

5
Macroeconomic policies

• Bibliography
• Bénassy-Quéré, Coeuré, Jacquet, Pisani-Ferry,
  Politique économique, de Boeck.
• Abraham-Frois, Introduction à la macroéconomie
  contemporaine, Economica.
• Acocella, The foundations of economic policy,
  Cambridge UP.

6
Macroeconomic policies

• Revues
• Economic policy
• Notes bleues, Ministère Eco and Finance.
• Monthly Bulletin, ECB.
• Rapports du Conseil danalyse économique.
• Revue de lOFCE.

7
Macroeconomic policies

• Plan
• Introduction.
• A framework for analyzing macroeconomic policies.
• Market failures and macroeconomic policies.
• Monetary policies
• Fiscal policies
• Employment policies
• Trust, institutions and macroeconomic policies
• Policies and politics

8
Macroeconomic policies

• Chapter 2. A Framework of economic policy.
• The standard framework. Goals and instruments.
• Uncertainty and economic policy.
• The Lucas critique.
• The time consistency problem.
• Information and policies.
• Systemic risks.
• The nature of government.

9
Macroeconomic policies

• Chapter 3. Market failures and public policies.
• The sources of market failures. Externalities,
  incomplete markets, rigidities.
• Asymmetric information.
• Market failures and multiple equilibria.
• The efficiency vs equity debate. Is there a
  trade-off?
• The scourges of market economies. Inflation,
  unemployment, instabilities.

10
Macroeconomic policies

• Chapter 4. Monetary policies.
• Monetarism. The Volcker experiment. US,1979-1982.
• Inflation. How to end hyperinflations? Poincaré,
  1929.
• Inflation and wages. La désinflation compétitive
  in France. 1983-
• Inflation targeting. GB, 1992-2005.
• Monetary policy in the ECB, 1999-2005.

11
Macroeconomic policies

• Chapter 5. Fiscal policies.
• The fiscal multiplier. How much? How reliable?
• Public debt sustainability. Where do we stand?
• Fiscal adjustments. The European cases. Danemark,
  Ireland and their friends.
• Supply-side economics. What happened to
  Reaganomics?
• The Bush experiment. Can it last?

12
Macroeconomic policies

• Chapter 6. Employment policies.
• The diversity of the employment records
• The microeconomics of employment and
  unemployment.
• What is to help? The economics of welfare.
• Thatcherism and the British record.
• The scandinavian experiments.
• The French record. What can we do?

13
Macroeconomic policies

• Chapter 7. Institutions, crises and policies.
• Trust and the role of institutions.
• The independence of central banks.
• The case of the lender of last resort. The US
  banking crisis of 1933.
• Monetary institutions. The case of Argentina
• Banks and exchange rates crises. The 1997 crises.
• Stabilization plans and the IMF.

14
Macroeconomic policies

• Chapter 8. Policies and politics.
• The political business cycles. Facts and issues.
• Elections and policies.
• Special-interest groups and policies.
• The tyranny of the statu quo.
• Is democracy good for growth?
• The politics of inflation.