Ceritanya presentasi

dan presentasi itu akhirnya selesai juga..
mari simak sedikit ringkasan buku Mankiw mengenai stabilization policy. siapa tau ada maniak yang berkenan membaca:

This chapter focuses on how policymakers respond to business cycle, whether they have to take an active role to stabilize the economy, or they remain passives. Thus, how policy makers acts in order to respond the changing in economic conditions, whether they have to use their discretion in responding to changing economic conditions, or they have to commit to following a fixed policy rules.

Should Policy Be Active or Passive?
Policy makers in the government view economic stabilization as one of their primary responsibilities. As we know, monetary and fiscal policy can exert a powerful impact on aggregate demand and thereby on inflation and unemployment. To many economists, the case for active government policy is clear and simple. Based on Great Depression experiences, it founds that how monetary and fiscal policy can prevent recessions by responding to these shocks. These types of economists consider it wasteful not to use these policy instruments to stabilize the economy.
Other economists are criticize the government’s attempts to stabilize the economy. Government should take a hands-off approach to macroeconomic policy. Some of their argument are Lags in the implementation and effect of policy, The difficult job of economic forecasting, Ignorance, Expectations through Lucas Critique, etc.

Lags in Implementation and Effect of Policies
Economic policymakers face the problem of long lags. Indeed, the problem is even more difficult because the lengths are hard to predict. These long and variable lags greatly complicate the conduct of monetary and fiscal policy. Economists distinguish between two lags that are relevant for the condut of stabilization policy: the inside lag and the outside lag. The inside lag means the time between a shock to the economy and the policy action responding to that shock. The outside lag means the time between policy action and its influence on the economy. A long inside lag is a central problem with using fiscal policy to economic stabilization. Because it’s include the legislative process that caused fiscal policy as imprecise tool for stabilizing economy. On the other hands, monetary policy has a shorter inside lag than a fiscal policy, because central bank can decide on and implement a policy change in less than a day. Monetary policy worked by changing the money supply and interest rates, which in turn influence investment and aggregate demand, but many firms are make investment plan far in advance. Economic stabilizers are designed to reduce the legs associated with stabilization policy.

The difficult Job of Economic Forecasting
Because policy influenced the economy only after a long lag, successful stabilization policy requires the ability to predict accurately future economic conditions. If we cannot predict the conditions, the we cannot evaluate whether fiscal or monetary policy should now be trying to expand or contract aggregate demand. Unfortunately, economic developments are capricious. One way forecasters try to look ahead is with leading indicators, it is a data series that fluctuates in advance of the economy. Another way to lok ahead is with macroeconomic models, which have been developed both by governments agencies and by the firms for forecasting and policy analysis. However, the validity of these predictions is only as good as the forecasters assumptions about the exogenous variables. One thing that we always keep in mind that these forecasts comes with a large margin of errors.

Ignorance, Expectations, and Lucas Critique
Economic is a young science an there are still much that we don’t know. Economics can’t be completely confident when they assess the effects of alternatives policies. These ignorance suggest that economists should be cautious when offering policy advice. If policy makers estimate the impact of any policy change, therefore, they need to know how people expectations will respond the policy change. Lucas criticize the traditional policy evaluation (standard macroeconomic models) doesn’t impact on expectations. Lucas leaves two lessons, first, that economist evaluating alternatives polices need to consider how policy affects expectations and thereby behavior. Second, that policy evaluation is hard, so economists should be sure to show the requisite humulity

Historical Record, Should Policy Be Conducted by Rule or Discretion?
from the historical we can viewed how important economics policy and its impact. But, the debate over macroeconomic history leaves no reasons. Let’s see how Great Depression treated by the government and the impact to unemployment, fiscal and monetary development. Hence, depending on one’s beliefs whether the Great Depression can be viewed as an example of why active monetary and fiscal policy is necessary or as an example of why it is dangerous.
The second debating is among economic policy should be conducted by rules or by discretion. Policy is conducted by rule if policymakers announce in advance how policy will respond to various situations and commit themselves to following through on this announcement, meanwhile policy is conducted by discretion if policymakers are free to size up events as they occur and choose whatever policy they consider in appropriate at time.
Policy conducted by rule has a weakness. That is distrust of the political process. Some economist leads to advocate placing economy policy outside the realm politics because of incompetence of political process and opportunism by politicians in economic policy.
Discretional policy is flexible, if the policymakers are reliable, this policy is very good in changing condition. But, the economists sometimes facing the problem of the inconsistency policy that made by policymakers. It caused a distrust to policy announcement. Time inconsistency usually happens by political process rather than economic process.the solution is to take away the policymaker’s discretion with a credible commitment to fixed policy rules.


demikian ringkasan ini saya sampaikan. oh ya, saya lupa bilang. ringkasan ini dapat menyebabkan kantuk dan kemaluan kecil.
semoga sukses