№ 2020/4
MacroeconomicsBANDURA Oleksandr 1
1Institute for Economics and Forecasting, NAS of Ukraine
Providing complementarity for the main components of macroeconomic dynamics
ABSTRACT ▼
We proposed new way to provide complementarities of main macroeconomic values — economic growth, employment and inflation. It was shown at the example of
monetary policy of world’s main central banks that unofficially the banks are trying
to control all three main macroeconomic values, to provide their complementarities. Although officially they mainly have one purpose mandate that is inflation (except of the U.S. central bank that should control both inflation and employment). It
is difficult to provide complementarities of three main macroeconomic values at
the absence of some economic model that connect as all three integrated values,
as numerous intermediate indicators, which determine every of three main values.
Finally, choice of any regulation instrument is determined by the model chosen by
regulator that provides interconnection between integrated values and intermediate indicators. Analyzing history of monetary policy for world’s main central
banks we revealed changing efficiency for their regulation instruments from the
point of its affects on economic growth, employment and inflation. It varies from
maximum efficiency in optimum point in time to minimum efficiency that requires
change of regulation instrument to provide more stable and forecast able the
cause-result type connection between final and intermediate indicators.
Based on the author’s CMI-model of macroeconomic dynamics, we substantiated
the formula that connects between each other both the three main macroeconomic indicators and numerous intermediate variables. It allows us, targeting only one
integrated indicator — cumulative market imperfections, — to control economic
growth, employment and inflation at the same time. For this purpose we can
chose all possible instrument as of monetary policy, as of the other kinds of regulations (fiscal, antitrust, innovation ones etc.). Besides, we would be able to control efficiency of how applied regulation instruments affect main macroeconomic
values, to determine the quantitative criterion of optimum efficiency for regulation
instruments.
Keywords:economic growth, employment, inflation, monetary policy, targeting
JEL: E30, E31, E32, E37
| Article in Russian (pp. 78 - 98) | Download | Downloads :213 |
| Article in Ukrainian (pp. 78 - 98) | Download | Downloads :318 |
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