Macroeconomics at the Service of Public Policy

This volume explores advanced macroeconomic models to address critical economic questions and policy implications, highlighting the need for updated approaches to understand complexities in the economy and inform effective public policy.

Macroeconomics at the Service of Public Policy explores contemporary macroeconomic models to address fundamental questions regarding economic functionality and policy implementation. The book delves into themes such as risk in the market, the European Debt crisis, and the potential for stagflation in the U.S. economy. It emphasizes the importance of integrating advanced mathematical techniques with economic analysis to navigate the complexities of today's macroeconomic landscape.

The contributors highlight the limitations of traditional dynamic stochastic general equilibrium (DSGE) models, particularly their failure to predict or adequately respond to the recent financial crisis. Many of these models were not designed to account for financial shocks or the imperfections in information and learning that significantly impact economic outcomes. In light of this, the book advocates for a new generation of DSGE models that incorporate these critical factors, aiming to enhance the understanding of macroeconomic dynamics and improve policy guidance.

By presenting alternative assumptions and methodologies, the authors strive to broaden the scope of macroeconomic research and its relevance to public policy. Their work signifies a commitment to advancing macroeconomic knowledge, ensuring that it remains applicable and effective in addressing real-world challenges. Overall, this volume serves as a vital resource for policymakers and researchers alike, encouraging a more nuanced approach to macroeconomic theory and practice.