Macro11Macroeconomic Policy宏观经济学(南开大学,龚刚).pptVIP

Macroeconomics Lecture 11 Macroeconomic Policy I. Introduction The objective to study how macroeconomic policies can be applied to solve practical macroeconomic problems. II. Demand Management as An Objective Three basic macroeconomic problems Unemployment; Inflation; Recession (reflected as low level in GDP） II. Demand Managementas An Objective The causes of macroeconomic problems According to the AS-AD model, these three problems can all be expressed as an inappropriate balance between aggregate demand and aggregate supply, given a stable aggregate supply curve. II. Demand Managementas An Objective The causes of macroeconomic problems (continued) In particular, unemployment and recession often indicates an insufficiency in aggregate demand while inflation often indicates too much aggregate demand. II. Demand Managementas An Objective The Objective of Macroeconomic Policy This seems to suggest that the objective of macroeconomic policies is to adjust the aggregate demand towards its appropriate level. Therefore, the macroeconomic policy as proposed by Keynes is often named as demand management policy. II. Demand Managementas An Objective Expansionary versus Contractionary: A macroeconomic policy that increases the aggregate demand is considered to be an expansionary (or aggressive) policy An expansionary policy is often applied when the economy is in recession (low output, low inflation and high unemployment rate) II. Demand Managementas An Objective Expansionary versus Contractionary (countinued): A macro economic policy that reduces the aggregate demand is considered to be a contractionary policy. A contractionary policy is often applied when the economy is in expansion (high output, high inflation and low unemployment rate) III. Monetary Policy There are two types of macroeconomic policy: The fiscal policy; The monetary policy. Either of them can be expansionary or contractionary Monetary policy is executed by central bank III. Monetary Polic