The new classical macroeconomics is today certainly the most coherent, if not the dominant, school of macroeconomic thought. The pivotal document in its two decades of development is Robert Lucas’s 1976 paper, “Econometric Policy Evaluation: A Critique.” Lucas argued against the then reigning methods of evaluating the quantitative effects of economic policies on the grounds that the models used...

The Dungey and Pitchford (DP) paper and the Debelle and Vickery (DV) paper are important contributions to the macroeconomic analysis of unemployment in Australia. Both papers focus on the question of what macroeconomic factors would reduce unemployment in Australia. Both papers use a rigorous theoretical framework as a basis for developing empirical relationships between unemployment, economic ...

Macroeconomic forecasts enable the policy-makers to foresee the future economic trends and take prompt measures to ensure longer economic growth and quicker economic recovery. Accurate and timely macroeconomic forecasts may also help the enterprises to make better long-term business strategies. Social media has a swift and sensitive response to economic dynamics through online news reports, int...

The details of the future will remain forever veiled to us. But give a gypsy seer a Ph.D. in economics and arm her with statistics and mathematical models, and people suddenly start taking her seriously. She will be invited to testify before Congress and held up by State TV as an expert in business forecasting. But from an analytical point of view, what she does is no different from what she di...

Most of the current literature on macroeconomic policies focus on cyclical phenomena such as politically induced business cycles, and how short-sighted policies can be overcome through proper institutional design. This paper instead focuses on the lasting effects of macroeconomic policies on such “real” economic variables as unemployment and distribution, and we argue that traditional distribut...

Worldwide monetary and fiscal policies in the past few years have put into sharp relief the fundamental tradeoff between short-run stabilization and long-run sustainability that policymakers face. The paper is organized around this question: How do the effects of routine monetary and fiscal operations designed to achieve macroeconomic stabilization objectives change when the economy moves from ...

This paper reviews evidence of the gender effects of globalization in developing economies. It then outlines a set of macroeconomic and trade policies to promote gender equity. The evidence suggests that while liberalization has expanded women’s access to employment, the long-term goal of transforming gender inequalities remains unmet and appears unattainable without state intervention in marke...

This paper considers the feasibility of a flexible system of active labour market policy which would adjust to the changing phases of the business cycle, and would dispense with the necessity to reinvent systems from scratch in every phase of every cycle. The proposed system would have an expenditure allocation which varied with the levels of short-term and long-term unemployment, and would all...

In an open economy with a floaLing exchange rate, the efficacy of fiscal and monetary policy depends fundamentally on the wage-setting pnxiess. In the canonical models of Mundell and Fleming, monetary expansion raises output via an exchange rate depreciation, while fiscal expansion has no output effect. These results hold only when real wages can be altered by exchange rate movements; if the re...

In this paper we analyse the stabilisation properties of distortionary taxes in a New Keynesian model with overlapping generations of finitely-lived consumers. In this framework, government debt is part of net wealth and this adds a number of interesting channels through which fiscal policy could affect output and inflation. Output volatility, in presence of technology shocks, is not substantia...