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The Goals of Macroeconomic Policy - Martin F. J. Prachowny

The Goals of Macroeconomic Policy

Hardcover

Published: 16th June 1994
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Politicians win elections by promising "Jobs Jobs Jobs " but in practice these promises quickly fall by the wayside. "The Goals of Macroeconomic Policy" analyzes why governments so rarely achieve their economic goals. Martin F. J. Prachowny argues that full employment should not be the primary objective of economic policy. He shows that Pareto optimality--the guiding principle of policy evaluation--does not apply to macroeconomic policies and that full employment is essentially a political aim.
The book is divided into three sections. The first is historical: it examines the limited literature on the optimality of macroeconomic goals and the record of successive governments in achieving the goals they have set. The second part presents a theory of the labor market, and an evaluation of welfare changes from rising or falling real wages.
The concluding part looks at public choice decisions, especially those related to spending and taxation, from an individualistic perspective. Although originally intended to show what sacrifices are necessary in collective decisions, the aim is now to maximize your own benefit from government spending and to avoid as much of the burden of taxation as possible. The resulting "free-rider problem" creates budget deficits which are no longer countercyclical but are tolerated because they have no adverse welfare consequences for the current population; instead they leave future generations saddled with extra interest payments on the accumulated debt. A number of possible ways of avoiding unnecessary budget deficits are explored without much hope for success.

Prefacep. ix
Introductionp. 1
The Theory of Macroeconomic Goalsp. 5
The Achievement of Macroeconomic Targets: U.S. Experience, 1948-90p. 33
The Market for Labor Services and the Macroeconomyp. 93
The Welfare Economics of Macropolicyp. 123
Public Expenditures and the Private Interestp. 151
The Macroeconomic Policy Apparatusp. 173
Epiloguep. 199
Bibliographyp. 203
Indexp. 209
Table of Contents provided by Publisher. All Rights Reserved.

ISBN: 9780415107631
ISBN-10: 0415107636
Audience: Tertiary; University or College
Format: Hardcover
Language: English
Number Of Pages: 232
Published: 16th June 1994
Publisher: Taylor & Francis Ltd
Country of Publication: GB
Dimensions (cm): 21.6 x 14.0  x 1.96
Weight (kg): 0.43
Edition Number: 1