ofMacroeconomics(宏观经济学-加州大学-詹姆斯&amp#183;布课件

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1、CHAPTER 17The Future of Macroeconomics1Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.QuestionsWhat might the future of macroeconomics bring?How might the macroeconomics taught two decades from now be different from the macroeconomics taught today?What have been the principal ch

2、anges in the way macroeconomics is taught over the past twenty years?2Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.QuestionsWhat additional changes took place twenty years before that-from roughly 1960 to roughly 1980?What direction will macroeconomics take if the real busines

3、s cycle research program is successful?What direction will macroeconomics take if the new Keynesian research program proves successful?3Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.QuestionsHow will economists understand the foundations behind the power of monetary policy?4Cop

4、yright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Past of MacroeconomicsA 1936 book by John Maynard Keynes shifted economic research and macroeconomic thought into new and different directionsthe role of expectations of future profits in determining investmentthe volatility of exp

5、ectations of profitsthe power of the government to affect the economy through policythe multiplier process5Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Past of MacroeconomicsAfter World War II,more macroeconomic theory was developedthe IS-LM model was createdthe relationsh

6、ip between interest rates and the money supply was investigatedthe difference between the behavior of the macroeconomy in the flexible-price long run and the fixed-price short run was clarified6Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Past of MacroeconomicsBut macroeco

7、nomics theory in 1960 was still incompleteno discussion of the relationship between production and inflationno detailed model of expectationsthe short run was seen as lasting for decadesfiscal policy was emphasized,while the role of monetary policy was downplayedestimates of the multiplier were much

8、 higher than we believe now to be correct7Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Past of MacroeconomicsBetween 1960 and 1980,two powerful critiques of the conventional wisdom of macroeconomics occurredthe first was by Milton Friedmanthe standard models overestimated

9、the governments ability to control the economythe standard models overestimated the power of fiscal policy and underestimated the power of monetary policythe money supply tells us most of what we need to know about how policy is workingthere is a natural rate of unemployment8Copyright 2002 by The Mc

10、Graw-Hill Companies,Inc.All rights reserved.The Past of Macroeconomicsthe second was by Robert LucasKeynesian economics fails to think through the importance of expectationssystematic changes in economic policy would change the parameters of the consumption and investment functions as well as the lo

11、cation of the Phillips curve9Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Past of MacroeconomicsThe late 1980s and 1990s were a time of idea generation and explorationmacroeconomists explored and tested a large number of different ideas and modelsthe mainstream policy-anal

12、ytic position of macroeconomists did not shift much10Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Future of Macroeconomics:Real Business Cycles?Keynesian and monetarist economists believe that there are two key elements to understanding business cyclesthe determinants of a

13、ggregate demandthe division of changes in nominal aggregate demand into changes in production and changes in prices11Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Future of Macroeconomics:Real Business Cycles?Real business cycle economists believe that changes in nominal ag

14、gregate demand affect output and employment only slightly and have the most impact on pricesReal business cycle theory begins with the assumption that the same theory that determines what happens in the long run should be applied to fluctuations in the short run12Copyright 2002 by The McGraw-Hill Co

15、mpanies,Inc.All rights reserved.The Future of Macroeconomics:Real Business Cycles?While real business cycle economists believe that prices can be rigid,they believe that this sluggishness of prices is not very relevantthey assume that it is a reasonable first-approximation to suppose that the money

16、supply and the level of potential output determine the price levelthe level of potential output is more-or-less equal to actual real GDP13Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Future of Macroeconomics:Real Business Cycles?Real business cycle economists believe in th

17、e classical dichotomyreal variables effectively determine the values of real quantities like real GDP even in the short runnominal variables determine the values of nominal quantities like the price level14Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Future of Macroeconomi

18、cs:Real Business Cycles?Real business cycle theory assumes that the level of output will vary with shocks to the economyadverse cost shocks lead to a recession as individuals should spend less time working because it is not profitablefavorable cost shocks lead to a boom period because it is advantag

19、eous to produce as much as possible15Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Problems of Real Business Cycle TheoryUnemploymentreal business cycle theory assumes that the total hours worked at any moment is largely determined by how many hours it makes sense for people to

20、 workbut when work hours fall,it is not because people have chosen to work shorter shifts and avoid overtimeit is because they have become unemployed16Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Problems of Real Business Cycle TheoryTechnology and Real Business Cyclesaccordin

21、g to real business cycle theory,production fluctuates because of the changing value of output and the changing productivity of the economymore is produced when technology risesrecessions occur when cost increases make it inefficient to run factories at near capacitycritics claim that cost increases

22、like the 1973 oil price shock are the exception rather than the rule17Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Problems of Real Business Cycle TheoryMoney and Business Cyclesreal business cycle theorists tend to argue that monetary policy has little impact on production an

23、d employmentfluctuations in the money stock and real interest rates are more reactions to changes already taking placethe Federal Reserve believes that it affects the level of interest rates and that its decisions cause changes in production and employment18Copyright 2002 by The McGraw-Hill Companie

24、s,Inc.All rights reserved.The Future of Macroeconomics:New Keynesian EconomicsSince the 1930s,mainstream macroeconomics has attributed the sluggishness of aggregate supply to stickiness in wages and pricesTherefore,fluctuations in nominal aggregate demand cause fluctuations in output and employment1

25、9Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.The Future of Macroeconomics:New Keynesian EconomicsWhere does this stickiness and slow adjustment of wages and prices come from?menu costsit is costly for businesses to change pricesstaggered prices and coordination failuresa firm

26、s best choice for its price may depend on the prices that other firms are chargingthis means that wages and prices may exhibit inertia20Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Debts and Deficits:Ricardian EquivalenceIf the government runs a budget deficit,it will make up

27、the deficit by borrowing money now and implicitly committing to raise taxes to repay the debt at some time in the future21Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Debts and Deficits:Ricardian EquivalenceEconomist Robert Barro argues that consumers will see the budget defic

28、it as an increase in future taxes and cut back on consumptionwhat matters for the determination of consumption spending this year is not what taxes are levied on you this year,but what all the changes in government policy tell you about stream of taxes this year and in the future22Copyright 2002 by

29、The McGraw-Hill Companies,Inc.All rights reserved.Debts and Deficits:Ricardian EquivalenceMany economists believe that Ricardian equivalence does not hold for a number of reasons myopialiquidity constraintspeople are different23Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Cons

30、umption and SavingIn the early 1900s,the marginal propensity to consume was highpeople were liquidity constrainedThe financial system in the past 50 years has become much more flexibleeconomic theory would predict that the marginal propensity to consume would decline and the multiplier process would

31、 be more or less irrelevant to aggregate demand24Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Consumption and SavingBut,consumption falls significantly when the economy goes into recessionWhy?one possibility is that consumers are both impatient and risk averseanother possible

32、explanation is that current income is a good proxy for permanent incomeanother suggestion is for economists to focus on what psychologists have to say about how humans reason25Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Does Monetary Policy Have a Long-Run Future?Economists h

33、ave tended to assume that monetary policy is powerful and that the reasons for its power are uninterestingThe future evolution of the financial system may undermine the sources of influence that monetary policy today possesses26Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Does

34、 Monetary Policy Have a Long-Run Future?Forecasting the future of monetary policy will require a deeper knowledge and better models of the sources of central bank power than macroeconomists currently possess27Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Chapter SummaryModern m

35、acroeconomics has its origin in the“Keynesian”theories of the Great Depression and post-WWII eraModern macroeconomics was reforged by the monetarists under Milton Friedman in the 1960s and 1970s,and by the rational expectations economists led by Robert Lucas in the 1970s and 1980s28Copyright 2002 by

36、 The McGraw-Hill Companies,Inc.All rights reserved.Chapter SummaryPerhaps the focus on aggregate demand will turn out in the long run to have been a false roadperhaps a better theory of the macroeconomy can be built up out of the theory of real business cycles in the Schumpeterian tradition29Copyrig

37、ht 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Chapter SummaryPerhaps the future of macroeconomics lies in a more detailed investigation of aggregate supplyperhaps uncovering the reason why prices are sticky will lead to the next wave of progress in macroeconomics30Copyright 2002 by Th

38、e McGraw-Hill Companies,Inc.All rights reserved.Chapter SummaryThe entire conventional analysis of debts and deficits is under challenge by Robert Barro,who argues that individuals are far-sighted and closely linked,and that they take action to neutralize the effects of many government policiesThe c

39、onventional analysis of consumption-the permanent income hypothesis-is also under challenge by more psychological approaches31Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.Chapter SummaryThe other possible interesting direction in which macroeconomics might evolve involves the future of monetary policyhow will the coming of the“new economy”and the changing institutional framework of transactions and settlements affect the power of monetary policy?32Copyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.