Rethinking Macroeconomic Policy
19 Pages Posted: 20 Feb 2010
Date Written: January 2010
The great moderation lulled macroeconomists and policymakers alike in the belief that we knew how to conduct macroeconomic policy. The crisis clearly forces us to question that assessment. In this paper, we review the main elements of the pre-crisis framework still hold, and take a tentative first pass at the contours of a new macroeconomic policy framework.
Keywords: Macroeconomic policy, macroprudential regulation, inflation targets, automatic stabilizers
JEL Classification: E44, E52, E58, G38, H50
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