David Kiefer
Macroeconomic Policy and Public Choice
David Kiefer
Macroeconomic Policy and Public Choice
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The subject is the intersection between politics and macroeconomics. The political economic equilibrium links theories of macroeconomics and public choice. The four-year election cycle implies that this equilibrium may be a cycle rather than a point. An extension of standard Keynesian theory provides a model of endogenous stabilization in which the president practices short-run stabilization policy to dampen the impact of exogenous shocks. This is a situation in which discretion can be better than a policy rule even with rational agents, and in which rational voters support discretionary…mehr
The subject is the intersection between politics and macroeconomics. The political economic equilibrium links theories of macroeconomics and public choice. The four-year election cycle implies that this equilibrium may be a cycle rather than a point. An extension of standard Keynesian theory provides a model of endogenous stabilization in which the president practices short-run stabilization policy to dampen the impact of exogenous shocks. This is a situation in which discretion can be better than a policy rule even with rational agents, and in which rational voters support discretionary policy. Special attention is given to the relevant data and the possibility of hypothesis testing.
Produktdetails
- Produktdetails
- Verlag: Springer, Berlin
- Seitenzahl: 251
- Englisch
- Abmessung: 240mm
- Gewicht: 526g
- ISBN-13: 9783540617570
- Artikelnr.: 27587522
- Herstellerkennzeichnung Die Herstellerinformationen sind derzeit nicht verfügbar.
- Verlag: Springer, Berlin
- Seitenzahl: 251
- Englisch
- Abmessung: 240mm
- Gewicht: 526g
- ISBN-13: 9783540617570
- Artikelnr.: 27587522
- Herstellerkennzeichnung Die Herstellerinformationen sind derzeit nicht verfügbar.
1. A Historical Introduction.- 1.1. The Keynesian revolution and the evolution of government's role.- 1.2. Keynesian orthodoxy.- 1.3. The political consequences of depression proofing.- 1.4. The economic consequences of depression proofing.- 1.5. Schools of thought.- 1.6. Ideology and politics.- 1.7. The market failure rationale for government intervention.- 1.8. Public choice.- 1.9. Conclusion.- 2. Microeconomic Foundations.- 2.1. Introduction.- 2.2. Consumers.- 2.3. Producers.- 2.4. General equilibrium.- 2.5. Pareto efficiency.- 2.6. Social welfare functions.- 2.7. Unemployment and inflation.- 2.8. The government budget and economic policy.- 2.9. Conclusion.- 3. Social Choice.- 3.1. Introduction.- 3.2. The theoretical superiority of majority rule.- 3.3. The impossibility of asking for more.- 3.4. Median voter model.- 3.5. Two dimensional social choice.- 3.6. Probabilistic voting.- 3.7. Political information and party ideology.- 3.8. Conclusion.- 4. Short-Run Macro Models.- 4.1. Introduction.- 4.2. Classical macro from micro foundations.- 4.3. Rationed equilibrium and rigid prices.- 4.4. Non-Walrasian equilibria.- 4.5. A Cobb-Douglas example.- 4.6. Conclusion.- 5. The Phillips Curve and Expectations.- 5.1. Introduction.- 5.2. The natural rate hypothesis.- 5.3. Unemployment and output gaps.- 5.4. Expectations about inflation in the future.- 5.5. Econometric uncertainty.- 5.6. One model of supply: Producer uncertainty.- 5.7. Another model: Predetermined wages.- 5.8. New classical macroeconomics.- 5.9. Conclusion.- 6. Fiscal and Monetary Policy.- 6.1. Introduction.- 6.2. Accounting peculiarities in the US budget.- 6.3. Built-in stabilizers.- 6.4. Balanced and unbalanced budgets.- 6.5. Doubts about fiscal policy effectiveness.- 6.6. The Federal Reserve and thePresident.- 6.7. Describing the money stock.- 6.8. Causality tests.- 6.9. Spurious regressions.- 6.10. Conclusion.- 7. Keynesian Business Cycles.- 7.1. Introduction.- 7.2. Cycles in a Keynesian model.- 7.3. A linear econometric model.- 7.4. Linear versus nonlinear models.- 7.5. Regression results.- 7.6. Econometric cautions.- 7.7. Dynamic behavior.- 7.8. Conclusion.- 8. Citizen Preferences.- 8.1. Introduction.- 8.2. Presidential popularity.- 8.3. Modeling popularity.- 8.4. Results.- 8.5. Conclusion.- 9. Endogenous Stabilization and Macroeconomic Ideology.- 9.1. Introduction.- 9.2. Endogenous stabilization policy.- 9.3. Ideology.- 9.4. Perceptions and expected utility.- 9.5. Plausible parameter values.- 9.6. The zero-inflation rule and inflation volatility.- 9.7. Voters should prefer conservatives, under certain conditions.- 9.8. Uncertainty about candidate platforms.- 9.9. Conclusion.- 10. Political Business Cycles.- 10.1. Introduction.- 10.2. Election opportunism.- 10.3. Partisan macroeconomics.- 10.4. Backward looking expectations.- 10.5. Forward looking expectations.- 10.6. Observations.- 10.7. Regression tests.- 10.8. Growth rate targets.- 10.9. Conclusion.- 11. Government Debt, Deficit and Social Security.- 11.1. Public debt in the short and long-run.- 11.2. Overlapping generations and efficiency.- 11.3. Public debt.- 11.4. Pay-as-you-go social security.- 11.5. Overlapping generations and equity.- 11.6. Market imperfections in the credit market.- 11.7. The Ricardian equivalence theorem.- 11.8. Illusions, inertia and irrationalities.- 11.9. Economic growth and the bequest constraint.- 11.10. Social security.- 11.11. Conclusion.- Appendix: More overlapping scenarios.- 12. Conclusion.- 12.1. The Keynesian revolution.- 12.2. Foundations.- 12.3. Weak evidence of policyeffectiveness.- 12.4. Rational expectations and the Phillips curve.- 12.5. An inherently unstable equilibrium.- 12.6. Stabilization and conservatism.- 12.7. Doubts about rational expectations.- 12.8. Long-run Keynesian outcomes.- References 241.- Subject Index 249.
1. A Historical Introduction.- 1.1. The Keynesian revolution and the evolution of government's role.- 1.2. Keynesian orthodoxy.- 1.3. The political consequences of depression proofing.- 1.4. The economic consequences of depression proofing.- 1.5. Schools of thought.- 1.6. Ideology and politics.- 1.7. The market failure rationale for government intervention.- 1.8. Public choice.- 1.9. Conclusion.- 2. Microeconomic Foundations.- 2.1. Introduction.- 2.2. Consumers.- 2.3. Producers.- 2.4. General equilibrium.- 2.5. Pareto efficiency.- 2.6. Social welfare functions.- 2.7. Unemployment and inflation.- 2.8. The government budget and economic policy.- 2.9. Conclusion.- 3. Social Choice.- 3.1. Introduction.- 3.2. The theoretical superiority of majority rule.- 3.3. The impossibility of asking for more.- 3.4. Median voter model.- 3.5. Two dimensional social choice.- 3.6. Probabilistic voting.- 3.7. Political information and party ideology.- 3.8. Conclusion.- 4. Short-Run Macro Models.- 4.1. Introduction.- 4.2. Classical macro from micro foundations.- 4.3. Rationed equilibrium and rigid prices.- 4.4. Non-Walrasian equilibria.- 4.5. A Cobb-Douglas example.- 4.6. Conclusion.- 5. The Phillips Curve and Expectations.- 5.1. Introduction.- 5.2. The natural rate hypothesis.- 5.3. Unemployment and output gaps.- 5.4. Expectations about inflation in the future.- 5.5. Econometric uncertainty.- 5.6. One model of supply: Producer uncertainty.- 5.7. Another model: Predetermined wages.- 5.8. New classical macroeconomics.- 5.9. Conclusion.- 6. Fiscal and Monetary Policy.- 6.1. Introduction.- 6.2. Accounting peculiarities in the US budget.- 6.3. Built-in stabilizers.- 6.4. Balanced and unbalanced budgets.- 6.5. Doubts about fiscal policy effectiveness.- 6.6. The Federal Reserve and thePresident.- 6.7. Describing the money stock.- 6.8. Causality tests.- 6.9. Spurious regressions.- 6.10. Conclusion.- 7. Keynesian Business Cycles.- 7.1. Introduction.- 7.2. Cycles in a Keynesian model.- 7.3. A linear econometric model.- 7.4. Linear versus nonlinear models.- 7.5. Regression results.- 7.6. Econometric cautions.- 7.7. Dynamic behavior.- 7.8. Conclusion.- 8. Citizen Preferences.- 8.1. Introduction.- 8.2. Presidential popularity.- 8.3. Modeling popularity.- 8.4. Results.- 8.5. Conclusion.- 9. Endogenous Stabilization and Macroeconomic Ideology.- 9.1. Introduction.- 9.2. Endogenous stabilization policy.- 9.3. Ideology.- 9.4. Perceptions and expected utility.- 9.5. Plausible parameter values.- 9.6. The zero-inflation rule and inflation volatility.- 9.7. Voters should prefer conservatives, under certain conditions.- 9.8. Uncertainty about candidate platforms.- 9.9. Conclusion.- 10. Political Business Cycles.- 10.1. Introduction.- 10.2. Election opportunism.- 10.3. Partisan macroeconomics.- 10.4. Backward looking expectations.- 10.5. Forward looking expectations.- 10.6. Observations.- 10.7. Regression tests.- 10.8. Growth rate targets.- 10.9. Conclusion.- 11. Government Debt, Deficit and Social Security.- 11.1. Public debt in the short and long-run.- 11.2. Overlapping generations and efficiency.- 11.3. Public debt.- 11.4. Pay-as-you-go social security.- 11.5. Overlapping generations and equity.- 11.6. Market imperfections in the credit market.- 11.7. The Ricardian equivalence theorem.- 11.8. Illusions, inertia and irrationalities.- 11.9. Economic growth and the bequest constraint.- 11.10. Social security.- 11.11. Conclusion.- Appendix: More overlapping scenarios.- 12. Conclusion.- 12.1. The Keynesian revolution.- 12.2. Foundations.- 12.3. Weak evidence of policyeffectiveness.- 12.4. Rational expectations and the Phillips curve.- 12.5. An inherently unstable equilibrium.- 12.6. Stabilization and conservatism.- 12.7. Doubts about rational expectations.- 12.8. Long-run Keynesian outcomes.- References 241.- Subject Index 249.