The Experts below are selected from a list of 315 Experts worldwide ranked by ideXlab platform
David Vines - One of the best experts on this subject based on the ideXlab platform.
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International Macroeconomic Policy coordination: an overview
Oxford Review of Economic Policy, 2012Co-Authors: Christopher Adam, Paola Subacchi, David VinesAbstract:This article, which serves as an introduction to the Oxford Review of Economic Policy ’s issue on ‘Macroeconomic Policy Coordination: Global Imbalances and Global Growth’, charts the evolution of international Macroeconomic Policy coordination from the end of the Second World War until the present day. The arrangements laid out at the Bretton Woods Conference in 1944 provide an intellectual framework with which to assess the evolving need for and feasibility of international coordination across three historical periods: the ‘fixed-but-adjustable’ exchange-rate arrangements of the Bretton Woods system; the subsequent flexible exchanges period of the ‘non-system’ which led into the Great Moderation; and finally the period since the global financial crisis of 2008. Increased economic integration, particularly through the capital account, combined with asymmetries in exchange-rate regimes between China and the US, have shown that reliance on the automatic adjustment mechanisms of the non-system are no longer feasible, so that a return to Policy cooperation is necessary in order to rebalance the world economy and reduce the adverse spill-over impacts that uncoordinated rebalancing would entail. The article explores the nature of this coordination and provides a context for other contributions to the issue, analysing positive and normative aspects of Macroeconomic Policy coordination from a global perspective and from the prospective of key global players including China and the European Union. Copyright 2013, Oxford University Press.
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remaking Macroeconomic Policy after the global financial crisis a balance sheet approach
Oxford Review of Economic Policy, 2009Co-Authors: Christopher Adam, David VinesAbstract:This paper describes the origins of the global financial crisis and how the prevailing New Keynesian Macroeconomic orthodoxy failed to anticipate its severity. This failure, we argue, stemmed from an incomplete understanding of the pivotal role of financial institutions in the amplification of the crisis and its transmission to the wider economy. Low global interest rates and a consequent 'search for yield' in the pre-crisis period encouraged financial institutions to build highly leveraged balance sheets which, in turn, generated extremely large asset-price movements when a 'small event'--the downturn in the US sub-prime mortgage market--triggered the worldwide crisis. The paper then briefly describes the element of the broadly successful and coordinated Macroeconomic Policy response to the crisis before turning to the medium-term challenges facing Policy-makers in sustaining global recovery. At the national level, we focus on the resolution of fiscal imbalances which contributed, in part, to the crisis, and which then worsened because of the Policy actions which have been taken to deal with it. At the international level, we emphasize the need to rectify the imbalances between savings and investment in many significant countries. This will require greater coordination of Macroeconomic Policy across the world's major economies. It will also involve strengthening the role, and the governance, of the International Monetary Fund. Copyright 2009, Oxford University Press.
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the assessment Macroeconomic Policy
Oxford Review of Economic Policy, 2000Co-Authors: Christopher Allsop, David VinesAbstract:This paper describes the emerging consensus about the "reaction function" approach to Macroeconomic Policy. The first section of the paper describes the historical emergence of this consensus, as a synthesis of pre-Keynesian, Keynesian, and monetarist ideas. The theoretical part of the paper presents the basic framework of the approach and explains a number of extensions, including: finding the optimal reaction function, avoiding the problem of inflation bias, the relevance of the Taylor rule, forward-looking expectations, extensions to the open economy, and the interconnections between monetary and fiscal Policy. The later parts of the paper contain a detailed discussion of some of the practical and institutional issues involved in the implementation of this new framework. Copyright 2000 by Oxford University Press.
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the assessment Macroeconomic Policy after emu
Oxford Review of Economic Policy, 1998Co-Authors: Christopher Allsopp, David VinesAbstract:In this paper we discuss the emergence of the new European Macroeconomic structure within EMU. We focus on three important elements: the wage-fixing authorities in each country, the fiscal authorities in each country, and the single European Central Bank (ECB). We identify serious problems which might arise in coordinating both the wage-setters and the fiscal authorities, and argue that these problems could be exacerbated if the ECB conducts monetary Policy inappropriately. In the light of this we provide recommendations for the conduct of monetary Policy by the ECB. The paper also briefly discusses financial stability issues and the interaction between the countries in EMU and the rest of the world. Copyright 1998 by Oxford University Press.
Stanley Fischer - One of the best experts on this subject based on the ideXlab platform.
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growth Macroeconomics and development
Nber Macroeconomics Annual, 1991Co-Authors: Stanley FischerAbstract:The 1980s were both the lost decade of growth for much of Latin America and Africa, and the period in which -- through the new growth theory -- macroeconomists returned to the study of growth and development. The new growth theory is production function driven and concerned primarily with steady states, and has paid little attention to the role of Macroeconomic Policy -- as reflected for instance in the rate of inflation and the budget deficit -- in determining growth. This paper presents a variety of evidence that Macroeconomic policies matter for long-run growth. First, Macroeconomic variables enter the typical new growth theory cross-country regressions with statistical significance and the expected signs. Second, evidence from large multi?country case studies, and from case-studies of Chile and Cote d'Ivoire presented in the paper, shows that Macroeconomic Policy choices have had a significant impact on growth over periods of more than a decade. The conclusion is that Macroeconomic Policy choices, including the budget deficit, the exchange rate system, and those choices that determine the inflation rate, matter for long-term economic growth.
Andrea Roventini - One of the best experts on this subject based on the ideXlab platform.
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Macroeconomic Policy in dsge and agent based models redux new developments and challenges ahead
Journal of Artificial Societies and Social Simulation, 2017Co-Authors: Giorgio Fagiolo, Andrea RoventiniAbstract:The Great Recession seems to be a natural experiment for economic analysis, in that it has shown the inadequacy of the predominant theoretical framework - the New Neoclassical Synthesis (NNS) - grounded on the DSGE model. In this paper, we present a critical discussion of the theoretical, empirical and political-economy pitfalls of the DSGE-based approach to Policy analysis. We suggest that a more fruitful research avenue should escape the strong theoretical requirements of NNS models (e.g., equilibrium, rationality, representative agent, etc.) and consider the economy as a complex evolving system, i.e. as an ecology populated by heterogenous agents, whose far-from-equilibrium interactions continuously change the structure of the system. This is indeed the methodological core of agent-based computational economics (ACE), which is presented in this paper. We also discuss how ACE has been applied to Policy analysis issues, and we provide a survey of Macroeconomic Policy applications (fiscal and monetary Policy, bank regulation, labor market structural reforms and climate change interventions). Finally, we conclude by discussing the methodological status of ACE, as well as the problems it raises.
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Macroeconomic Policy in dsge and agent based models redux new developments and challenges ahead
Sciences Po publications, 2016Co-Authors: Giorgio Fagiolo, Andrea RoventiniAbstract:The Great Recession seems to be a natural experiment for economic analysis, in that it has shown the inadequacy of the predominant theoretical framework | the New Neoclassical Synthesis (NNS) | grounded on the DSGE model. In this paper, we present a critical discussion of the theoretical, empirical and political-economy pitfalls of the DSGE-based approach to Policy analysis. We suggest that a more fruitful research avenue should escape the strong theoretical requirements of NNS models (e.g., equilibrium, rationality, representative agent, etc.) and consider the economy as a complex evolving system, i.e. as an ecology populated by heterogeneous agents, whose far-from-equilibrium interactions continuously change the structure of the system. This is indeed the methodological core of agent-based computational economics (ACE), which is presented in this paper. We also discuss how ACE has been applied to Policy analysis issues, and we provide a survey of Macroeconomic Policy applications (fiscal and monetary Policy, bank regulation, labor market structural reforms and climate change interventions). Finally, we conclude by discussing the methodological status of ACE, as well as the problems it raises.
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Macroeconomic Policy in dsge and agent based models
Revue De L'ofce, 2012Co-Authors: Giorgio Fagiolo, Andrea RoventiniAbstract:The Great Recession seems to be a natural experiment for Macroeconomics showing the inadequacy of the predominant theoretical framework—the New Neoclassical Synthesis—grounded on the DSGE model. In this paper, we present a critical discussion of the theoretical, empirical and political-economy pitfalls of the DSGE-based approach to Policy analysis. We suggest that a more fruitful research avenue to pursue is to explore alternative theoretical paradigms, which can escape the strong theoretical requirements of neoclassical models (e.g., equilibrium, rationality, representative agent, etc.). We briefly introduce one of the most successful alternative research projects—known in the literature as agent-based computational economics (ACE)—and we present the way it has been applied to Policy analysis issues. We then provide a survey of agent-based models addressing Macroeconomic Policy issues. Finally, we conclude by discussing the methodological status of ACE, as well as the (many) problems it raises.
Adam S Posen - One of the best experts on this subject based on the ideXlab platform.
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the great recession lessons for Macroeconomic Policy from japan
Brookings Papers on Economic Activity, 2001Co-Authors: Kenneth N Kuttner, Adam S PosenAbstract:SINCE THE PERSISTENCE OF Japan's economic stagnation first became apparent, the Japanese government has been offered a flood of advice from Macroeconomic Policy analysis. Much of this advice emanated from the official sector, most prominently from the U.S. Treasury and the International Monetary Fund (IMF), but a host of academics were likewise generous in their recommendations. (1) Yet both the degree to which Japan has followed this advice and the effects of the Macroeconomic policies undertaken remain in dispute. Economic commentators and other observers of Japan have split over whether standard Keynesian policies were tried and failed, whether the policies implemented had the expected effects but were offset by other factors, or whether some of the recommended policies (monetary expansion, in particular) never were seriously tried at all. After the longest period of below-potential growth for any developed economy since World War II--what we and others have termed the Great Recession--with no end in sight, it is worth asking what lessons there are for Macroeconomic Policy from Japan. Japan's experience since the burst of its stock market bubble in December 1989 constitutes a critical experiment for the effectiveness of Macroeconomic Policy on several grounds. First and foremost, Japan's unprecedentedly persistent shortfall of demand raises the obvious question of whether countercyclical policies had any beneficial effects, if such policies were implemented and Japan has not yet recovered. Second, the argument has often been made, although not by macroeconomists, that the Japanese economic system is somehow special, not subject to the same rules and economic logic as Western economies; if largely the same Macroeconomic Policy prescriptions are to be offered universally, whether or not they work in Japan is an important test case. Third, the unvarying nature of Japan's institutional structures (a topic of much criticism from advocates of structural reform) provides a unique opportunity to assess the impact of monetary and fiscal policies in the absence of other major changes in the economic environment. On more specific issues there are also questions of real concern. As has often been observed, monetary Policy in Japan today confronts a disabled banking system, the zero bound on nominal interest rates, and arguably a liquidity trap, forcing us to reexamine the efficacy of the quantity channels of monetary Policy transmission. As for fiscal Policy, Japan in the last decade can be seen as a case in which fiscal stimulus should have been either very effective or largely ineffective: effective because of the relatively closed economy, the reluctance of savers to move money abroad, and the vast quantities of private household savings available; ineffective because of the wastefulness of public works projects, the looming demographic threat posed by an aging population, and the rapid and obvious rise in public debt. Thus Japan represents a crucial test of the Ricardian versus the Keynesian approach to fiscal Policy. Finally, that same disabled banking system, which has now limped along for a decade without resolution of its bad loans, allows us to consider the nonmonetary effects of financial fragility on the real economy when banks are not allowed to fail outright. Thus the purpose of this paper is to establish the record and assess empirically the effects of Macroeconomic policies undertaken in Japan in response to the Great Recession. Discussions of Japan's Macroeconomic policies have all too often suffered from lack of empirical rigor. Some have been based on simplistic, uncontrolled analyses, observing, for example, that the economy has faltered despite growing fiscal deficits, and concluding from this that fiscal stimulus has failed. Others have relied on comparisons with other countries' experiences, for example in discussing what a central bank might do if faced with a liquidity trap, or simply appealed to abstract (and untested) economic principles. …
Giorgio Fagiolo - One of the best experts on this subject based on the ideXlab platform.
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Macroeconomic Policy in dsge and agent based models redux new developments and challenges ahead
Journal of Artificial Societies and Social Simulation, 2017Co-Authors: Giorgio Fagiolo, Andrea RoventiniAbstract:The Great Recession seems to be a natural experiment for economic analysis, in that it has shown the inadequacy of the predominant theoretical framework - the New Neoclassical Synthesis (NNS) - grounded on the DSGE model. In this paper, we present a critical discussion of the theoretical, empirical and political-economy pitfalls of the DSGE-based approach to Policy analysis. We suggest that a more fruitful research avenue should escape the strong theoretical requirements of NNS models (e.g., equilibrium, rationality, representative agent, etc.) and consider the economy as a complex evolving system, i.e. as an ecology populated by heterogenous agents, whose far-from-equilibrium interactions continuously change the structure of the system. This is indeed the methodological core of agent-based computational economics (ACE), which is presented in this paper. We also discuss how ACE has been applied to Policy analysis issues, and we provide a survey of Macroeconomic Policy applications (fiscal and monetary Policy, bank regulation, labor market structural reforms and climate change interventions). Finally, we conclude by discussing the methodological status of ACE, as well as the problems it raises.
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Macroeconomic Policy in dsge and agent based models redux new developments and challenges ahead
Sciences Po publications, 2016Co-Authors: Giorgio Fagiolo, Andrea RoventiniAbstract:The Great Recession seems to be a natural experiment for economic analysis, in that it has shown the inadequacy of the predominant theoretical framework | the New Neoclassical Synthesis (NNS) | grounded on the DSGE model. In this paper, we present a critical discussion of the theoretical, empirical and political-economy pitfalls of the DSGE-based approach to Policy analysis. We suggest that a more fruitful research avenue should escape the strong theoretical requirements of NNS models (e.g., equilibrium, rationality, representative agent, etc.) and consider the economy as a complex evolving system, i.e. as an ecology populated by heterogeneous agents, whose far-from-equilibrium interactions continuously change the structure of the system. This is indeed the methodological core of agent-based computational economics (ACE), which is presented in this paper. We also discuss how ACE has been applied to Policy analysis issues, and we provide a survey of Macroeconomic Policy applications (fiscal and monetary Policy, bank regulation, labor market structural reforms and climate change interventions). Finally, we conclude by discussing the methodological status of ACE, as well as the problems it raises.
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Macroeconomic Policy in dsge and agent based models
Revue De L'ofce, 2012Co-Authors: Giorgio Fagiolo, Andrea RoventiniAbstract:The Great Recession seems to be a natural experiment for Macroeconomics showing the inadequacy of the predominant theoretical framework—the New Neoclassical Synthesis—grounded on the DSGE model. In this paper, we present a critical discussion of the theoretical, empirical and political-economy pitfalls of the DSGE-based approach to Policy analysis. We suggest that a more fruitful research avenue to pursue is to explore alternative theoretical paradigms, which can escape the strong theoretical requirements of neoclassical models (e.g., equilibrium, rationality, representative agent, etc.). We briefly introduce one of the most successful alternative research projects—known in the literature as agent-based computational economics (ACE)—and we present the way it has been applied to Policy analysis issues. We then provide a survey of agent-based models addressing Macroeconomic Policy issues. Finally, we conclude by discussing the methodological status of ACE, as well as the (many) problems it raises.
