Generally, there are two broad policy approaches to having the government (or it's appointed representative, the central bank) manage the macro economy. One, fiscal policy involves deliberate management of the government budget (spending and tax policy) with a view to stimulating or slowing the economy. The other is monetary policy where the central bank (or … Continue reading Monetary Policy: The Wrong Tool for the Job
Joseph Stiglitz offers his views on how macroeconomic theory is broken here via Mark Thoma: it's bad models, bad assumptions, and avoidance of the really hard questions. I agree.
Nobel winner Joseph Stiglitz explains why GDP is NOT a good measure of society's well-being and offers ideas on better measures. It's a good critique of GDP. National income statistics such as GDP and gross national product were originally intended as a measure of market economic activity, including the public sector. But they have increasingly … Continue reading We need a better measure than GDP