第36章宏观经济政策的六个争论问题.pptVIP

* In the first bullet point, “incompetent” is not meant to be an insult. Economics is an inexact science at best. It’s quite possible that people appear highly qualified when they’re appointed to the Fed but run into the limits of their knowledge as the future unfolds. For example, I’m sure President Bush thought Michael Brown was highly qualified when he appointed “Brownie” in March 2003 to head the Federal Emergency Management Agency (FEMA). It turned out that was not quite the case when an actual emergency (Hurricane Katrina) occurred and required federal management and coordination of assistance. Here are a couple more examples of time-inconsistent policy (which I found in Mankiw’s intermediate macro textbook): The government announces that it will never negotiate with terrorists over the release of hostages to give would-be hostage-takers the expectation that holding hostages would give them no power. But once hostages are taken, government is tempted to offer some concession to get the hostages released. The government announces it will grant a temporary monopoly to firms that invent new drugs to encourage RD. But once a new drug is invented, the government may be tempted to renege in order to make the drug more affordable to those that need it to survive. * If the central bank’s commitment to achieving zero inflation is credible, then people will lower their expectations of inflation, and the short-run Phillips curve will shift downward: workers and firms will build lower COLAs into labor contracts, firms that must announce prices in advance will announce lower prices than if they expected higher inflation, and so forth. This exercise helps students see a possible benefit to inflation. * The surging U.S. government debt of the last two decades has led many to argue for a balanced budget amendment to the U.S. Constitution. Many proponents of such an amendment feel that elected leaders do not have the backbone to exercise fiscal restraint, s