The Role of Economic Policy after the New Classical Macroeconomics

Willem Buiter

No 580, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper considers the implications of the rational expectations New Classical Macroeconomics revolution for the 'rules versus discretion' debate. The following issues are covered: 1) The ineffectiveness of anticipated stabilization policy, 2) Non-clausal models and rational expectations, 3) Optimal control in non-causal models -- the inconsistency of optimal plans. I established the robustness of the proposition that contingent (closed-loop or feedback) rules dominate fixed (open-loop)rules. The optimal contingent rule in non-causal models -- the innovation or disturbance-contingent feedback rule -- is quite different from the state-contingent feedback rule derived by dynamic stochastic programming.

Date: 1980-11
Note: ITI IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Buiter, Willem H. "The Macroeconomics Of Dr Pangloss: Critical Survey Of The New Classical Macroeconomics," Economic Journal, 1980, v90(357), 34-50.
Published as Buiter, Willem H. "The Role of Economic Policy after the New Classical Macroeconomics." Macroeconomic Analysis, edited by D. Currie, R. Nobay, and D.A . Peel, London, (1981), pp. 233-295.

Downloads: (external link)
http://www.nber.org/papers/w0580.pdf (application/pdf)

Related works:
Working Paper: The Role of Economic Policy After the New Classical Macroeconomics (1980)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:0580

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w0580

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().