Is Macroeconomics Dead? Monetary and Fiscal Policy in Historical Context

Garnaut, Ross

doi:10.1093/oxrep/gri030

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Fiscal Policy1

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2015

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Cited by 7 publications

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“…Government expenditure was also relatively small as a share of GDP in the very early terms of trade episodes, limiting the ability to stimulate the economy. During the Federation and the Roaring Twenties episodes, there was a consensus among economists and policymakers that public expenditure only had a limited role in stabilising economic cycles (Garnaut 2005). 22 In the current episode, however, the larger size of the government ensures some buffer to activity via automatic stabilisers to the downturn in the terms of trade, and the attitude among some economists to a discretionary fiscal policy response has changed, particularly for spending on infrastructure (see, for example, Garnaut (2013) and Sheehan and Gregory (2013)).…”

Section: Fiscal Policymentioning

confidence: 99%

Macroeconomic Consequences of Terms of Trade Episodes, Past and Present

et al. 2015

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The early 21st century saw Australia experience its largest and longest terms of trade boom. This paper places this recent boom in a long-run historical context by comparing the current episode with earlier cycles. While similarities exist across most episodes, current macroeconomic policy frameworks and settings are quite different to those of the past. This mitigated the broader macroeconomic consequences of the upswing and as the terms of trade decline may do likewise.

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Section: Fiscal Policymentioning

confidence: 99%