Monetary Policy and Macroeconomic Stabilization
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A01=Ole Roste
areas
Asymmetric Shocks
Author_Ole Roste
Category=KCA
Category=KCBM
choices
Common Fiscal Policy
Contractionary Monetary Policy Shock
CPI Inflation
currency
Currency Areas
disinflation output costs
Disinflation Period
Distinct Monetary Policy
economic adjustment mechanisms
empirical macroeconomic policy evaluation
Employment Growth Equation
eq_bestseller
eq_business-finance-law
eq_isMigrated=1
eq_isMigrated=2
eq_nobargain
eq_non-fiction
Estimate Var Model
exchange
Exchange Rate Regime Choices
Explicit Inflation Target
FIML Estimation
fiscal stabilization tools
Inflation Targeting
Interest Rate Reaction Function
Kai Leitemo
Labor Demand Shocks
labor market dynamics
large
Large Currency Areas
macroeconomic policy analysis
Microeconomic Efficiency
Monetary Transmission Mechanism
Nominal Inertia
Oca Theory
Ole Bjorn Roste
Output Gap
rate
ratio
regime
regional economic shocks
Sacrifice Ratio
Var Model
Var Study
Work Force Participation
Product details
- ISBN 9781412807487
- Weight: 453g
- Dimensions: 152 x 229mm
- Publication Date: 15 Aug 2008
- Publisher: Taylor & Francis Inc
- Publication City/Country: US
- Product Form: Hardback
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As a fundamental review and critique of activist economic policies, this book is a unique contribution to classical political economy. "Monetary Policy and Macroeconomic Stabilization" is about macroeconomic stabilization policy, with emphasis on the value of a distinct national monetary policy to growth. Ole Bjorn Roste's argument is for public officials to restrain themselves in the pursuit of policy. As the author notes: when you know less, you should do less.The history of modern macroeconomics started in 1936 with the publication of Keynes' "General Theory of Employment, Interest, and Money". The problems of the Great depression of the 1930s paved the way for a change of focus, from the long run to economic fluctuations in the short run, and from nominal to real variables, such as unemployment and aggregate output.Keynes offered clear policy implications in tune with the times. Because economic adjustment was slow, waiting for the economy to recover by itself was irresponsible. Particularly fiscal policy was essential to return to high employment. Monetary policy could affect aggregate demand through Interest rates, but was less important. Roste discusses the role of monetary policy, starting out with the implications of the theory of optimum currency areas (OCAs). This is followed by estimates of the output loss associated with disinflation policy (the sacrifice ratio) for six OECD economies. Further, Roste models the dynamic adjustment to negative, local labor-market shocks, with particular relevance to Scandinavia, in a final section.The idea that governments should pursue stabilizing fiscal or monetary policies with regard to real variables is often taken for granted by the public, if not by economists. Among the reasons for skepticism, is the presence of differing views on how economies really work, that the state of a given economy becomes known only after a time lag, and that economic agents react to policy and expectations of policy. For these reasons, the effects of policy are generally uncertain. This book explains why the role of history is critical to the study of macroeconomics.p>
Ole Bjorn Roste is associate professor of political science at the Norwegian University of Science and Technology. His research interests include economics, public policy, and the politics of monetary arrangements particularly dealing with European monetary unification.
