Rethinking Macro Policy II: Getting Granular

By Olivier J Blanchard, Giovanni Dell'Ariccia, Paolo Mauro

April 15, 2013

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Olivier J Blanchard, Giovanni Dell'Ariccia, and Paolo Mauro. Rethinking Macro Policy II: Getting Granular, (USA: International Monetary Fund, 2013) accessed September 18, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

This note explores how the economic thinking about macroeconomic management has evolved since the crisis began. It discusses developments in monetary policy, including unconventional measures; the challenges associated with increased public debt; and the policy potential, risks, and institutional challenges associated with new macroprudential measures. Rationale: The note contributes to the ongoing debate on several aspects of macroeconomic policy. It follows up on the earlier “Rethinking” paper, refining the analysis in light of the events of the past two years. Given the relatively fluid state of the debate (e.g., recent challenges to central bank independence), it is useful to highlight that while many of the tenets of the pre-crisis consensus have been challenged, others (such as the desirability of central bank independence) remain valid.

Subject: Banking, Financial sector policy and analysis, Financial sector stability, Fiscal consolidation, Fiscal policy, Inflation, Macroprudential policy instruments, Prices

Keywords: Aggregate demand, Debt ratio, Eastern Europe, Europe, Exchange rate, Financial sector stability, Financial stability, Fiscal consolidation, Fiscal multipliers, Foreign exchange, Global, Inflation, Inflation targeting, Inflation targets, Liquidity trap, Macroprudential policy, Macroprudential policy instruments, Monetary policy, Political economy, Quantitative easing, Real interest rate, SDN, Sovereign bond, Zero lower bound

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Staff Discussion Notes No. 2013/003
Stock No:

SDNEA2013003
ISBN:

9781484363478
ISSN:

2617-6750

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