MBA教材课件英文版 宏观经济学 Macro8 Macroeconomic Policies.ppt

Macroeconomic Policies IntroductionThe objective of this chapter is to move from theory to empiric. Specially, we shall study how macroeconomic policies can be applied to solve practical macroeconomic problems. IntroductionThere are basically two macroeconomic problems on which the macroeconomic policy can have its effect.UnemploymentInflation The Relation between Inflation and UnemploymentFrom our all market model as established in the last time, we could find a negative relation between inflation and unemployment (please consider how?)Yet, this is only reflected in a theoretical model, how about in empiric? The Relation between Inflation and UnemploymentThe Original Phillips Curve: A. W. Phillips (1957) find a significant negative relation between unemployment and the growth rate of nominal wage. In particular, he estimates where w is the growth rate of wage (note that the estimated ? is negative. The Relation between Inflation and UnemploymentThe modern Phillips curve that economists use today differs in three ways from what Phillips examined. First, the modern Phillips curve substitutes price inflation for wage inflation. This substitution is reasonable (since price inflation and wage inflation often move together). The Relation between Inflation and UnemploymentSecond, the modern Phillips curve includes expected inflation.Third, the modern Phillips curve include the supply shock. The Relation between Inflation and UnemploymentThe importance of Phillips Curve:Theoretically, it supports Keynesian macroeconomics. Empirically, it indicates a trade-off between the two most important macroeconomic problems. Therefore, solving one problem may cause the other.Debates on the Phillips curve (will be presented in the class). Macroeconomic Policy: OverviewThe macroeconomic policy can be executed by either government (ministry of finance) or central bankThe direct effect of macroeconomic policy is to change aggregate demand. Therefore the policies are often named “the d