Macro = structural changes -_-?? (1 Viewer)

[Shapes]

Ok my 3rd eco. thread in 2 days ~ need quite abit of help =P

I was wondering if macroec. policies can implement structural change similar to microec. policies ~ or is that impossible for macroec. policies ?

Are Macroec. policies similar to Microec. policies in any particular way ?


Thanx alot =P

Cheers! =D

 

[Shapes]

The role of policy is to facilitate the process of change by providing a stable macroeconomic environment and a flexible and responsive microeconomic structure. I think you will find this government paper on structural change in Australia an interesting read that gives you an indepth knowledge into this area to enable you have a strong understanding.

*um* could you please clarify "macroeconomic environment" and "microeconomic structure" please =D I don't quite understand it =X

thanx

 

[gnrlies]

Ok my 3rd eco. thread in 2 days ~ need quite abit of help =P

I was wondering if macroec. policies can implement structural change similar to microec. policies ~ or is that impossible for macroec. policies ?

Are Macroec. policies similar to Microec. policies in any particular way ?


Thanx alot =P

Cheers! =D

No

Macro policies are fundamentally different to micro policies...

Macro = Demand management = fiscal and monetary policy

Micro = supply management = microeconomic reform

Essentially macroeconomic policies are for those left wing keynesian economists who still hold on to the general theory of employment, interest and money without realising that the world has come a long way since the 1930's. Nowadays we dont really have any true demand management policies. Fiscal policy is more of a political tool, and well monetary policy is used for inflation targeting.

Microeconomic reform is about achieving economic liberalism in a socialist economic landscape. Essentially every microeconomic reform that has been successfull has worked well because it has restored the power of the free market.

Think China. Why has china done so successfully? Because they have opened markets, deregulaed, and become more capitalistic. Thats the free market in action. Embrace it, and dont believe the shit that you might read from various socialist sources.

So microeconomic reform is about doing things the right way, whereas macroeconomic policy is about punishing the economy when it is performing well, and striving for unsustainable growth when it is underperforming.

 

[Conspirocy]

wouldn't a stable macroeconomic environment aid microeconomic reforms?

 

[gnrlies]

wouldn't a stable macroeconomic environment aid microeconomic reforms?

Well they are totally independant of one another

 

[eminator]

Ok my 3rd eco. thread in 2 days ~ need quite abit of help =P

I was wondering if macroec. policies can implement structural change similar to microec. policies ~ or is that impossible for macroec. policies ?

Are Macroec. policies similar to Microec. policies in any particular way ?


Thanx alot =P

Cheers! =D

Well, as other people have said, Macro policies (i.e. Fiscal and Monetary Policy) address aggregate demand and cyclical elements of an economy, whereas micro policies address the long term supply elements of an economy. The only way to implement structural changes through macro policy, it's probably not even considered a structural change, is through discretionary fiscal policy where the Federal Budget is changed structurally. This is usually through changing income tax rates and tax thresholds.

Macroeconomic policies address economic problems in the short term, looking for a temporary solution to things like stable economic growth, inflation etc. Microeconomic policies are generally a long term solution to these problems, look at the Phillip's Curve for example. When micro policy is implemented, particularly monetary policy, there is a trade-off between inflation and unemployment in the short to medium term, but through the implementation of macro policy, the Phillip's curve moves inwards reducing the problem.

Hope this helps! (Probably a good idea to check this info before you use it, I could be wrong, but I'm pretty sure most of it is right.)

 

[Shapes]

Well they are totally independant of one another

LOL I only found this out when I was writing my practice essay yesterday on the effectiveness of macroec. policies ^o^"

thanks for your previous help too gnrlies =D

Well, as other people have said, Macro policies (i.e. Fiscal and Monetary Policy) address aggregate demand and cyclical elements of an economy, whereas micro policies address the long term supply elements of an economy. The only way to implement structural changes through macro policy, it's probably not even considered a structural change, is through discretionary fiscal policy where the Federal Budget is changed structurally. This is usually through changing income tax rates and tax thresholds.

Macroeconomic policies address economic problems in the short term, looking for a temporary solution to things like stable economic growth, inflation etc. Microeconomic policies are generally a long term solution to these problems, look at the Phillip's Curve for example. When micro policy is implemented, particularly monetary policy, there is a trade-off between inflation and unemployment in the short to medium term, but through the implementation of macro policy, the Phillip's curve moves inwards reducing the problem.

Hope this helps! (Probably a good idea to check this info before you use it, I could be wrong, but I'm pretty sure most of it is right.)

Yeh it helped quite abit *surprised* =D thanks very much!