Rethinking Macro Policy II: Getting Granular
Rethinking Macro Policy II: Getting Granular. Olivier Blanchard, Giovanni Dell’Ariccia, Paolo Mauro, IMF Staff Discussion Note, April 15, 2013.
“The 200809 global economic and financial crisis shook the consensus on how to run macroeconomic policy. It reminded us of the dangers associated with financial sector imbalances; showed the limitations of monetary policy and cast doubt on some of the tenets of its intellectual foundations; and led to a reevaluation of what levels of public debt can be considered safe. This prompted a healthy reconsideration of what worked and what did not, and a debate on how to fix things, ranging from nitty-gritty technical points to broad-based institutional design questions. Five years from the beginning of the crisis, the contours of a new macroeconomic policy consensus remain unclear. But policies have been tried and progress has been made, both theoretical and empirical. This paper updates the status of the debate.”
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