Talk:Macroeconomics

Moving towards approval

Now that we have an (almost) approved microeconomics article, it seems like a good time to focus on this one. My overall impression is that the article is too long as an introduction. Also, I think it focuses too much on models right up front. Modeling is an important tool and what most macroeconomists spend their time doing, but not the point of macro.

The big problem is that macroeconomics is a mess as a discipline which makes it difficult to write a coherent introductory article. I think a useful approach might be to focus on the "themes" or story of macroeconomics up front. Why is macroeconomics important rather than a list of things that macroeconomists have done or are doing. I would suggest:

• Economic growth is the most important factor influencing the advancement and improvement of human welfare and quality of life.
• International trade is important for growth
• Government policy has a significant impact on both growth and trade.
• At this point, hopefully the reader has an idea of why models might be important, then we can launch into the notion of developing a model to figure out what effect changing variable (a) has on variables (b)...(z)

I think most of the information is on the page is good and usable in either this article or a subtopic, the real challenge is manipulating it into something with a nice flow that is easier to understand. Stephen Saletta 07:30, 13 November 2007 (CST)

I had hoped that the word model would be interpreted as an intellectual construction rather than a set of equations. However, since it seems to cause confusion, I have deleted it. Nick Gardner 09:28, 13 November 2007 (CST)

That was how i read it, but not everyone will, Try paradigm instead. --Martin Baldwin-Edwards 09:32, 13 November 2007 (CST)

I think that some may misinterpret that: I should prefer to leave things as they (now) are.

Nick Gardner 09:42, 13 November 2007 (CST)

The treatment of monetarism

In this draft I have dismissed the simplistic version of monetarism without coming to a conclusion about the validity of the more sophisticated version employed by monetary economists. This avoids unnecessary controversy. To my mind the matter is, in any case, not worth pursuing. Monetarism was abandoned because monetary control was found impracticable, not because its theoretical grounding was found wanting. I plan to bring that out in the section on the management of the economy.

Nick Gardner 10:45, 24 September 2007 (CDT)

You make a reasonable point about the empirical experiences of monetarist policy. I wonder whether we should mention in passing some of the more sophisticated approaches -- just for encyclopaedic completeness.--Martin Baldwin-Edwards 10:52, 24 September 2007 (CDT)

Point taken. But I don't want to overburden readers at the outset. I will try to cover it in the section on qualifictions and extensions. Nick Gardner 15:07, 25 September 2007 (CDT)

The current treatment of monetarism seems a little editorialized at the moment. I would state what it is (money supply is the only thing that matters). I think it would also be reasonable to state that it has been surpassed by the neoclassical synthesis and if you want to mention some neokeynesian critique, that would be reasonable as well.Stephen Saletta 07:00, 13 November 2007 (CST)

I don't accept that money supply is the only thing that matters. I believe the transmission mechanism to be equally important. The assertion that it has been surpassed seems unnecessarily judgemental, especially since some respected authorities consider the long-term effect of the money supply to be a significant factor. Is not your point covered well enough in the paragraph on current monetary policy? Nick Gardner 10:11, 13 November 2007 (CST)

I think my bigger issue is the use of the word "obvious". How about something like:

Monetarism is the theory that inflation is caused by the growth of the money supply in excess of productivity growth. The example of helicopter inflation is a frequently cited illustration of this point: if enough pound notes were dropped from a helicopter to double the amount of money in circulation, prices would double as well. Under monetarism, inflation is caused by growth in the money supply and the appropriate prescription is to properly control of the money supply. One critique of the helicopter inflation model is the assumption that individuals would spend all of their additional money on goods, whereas under the Keynesian model, surplus cash is invested in interest bearing securities....

I would just like to see the paragraph cut to the chase a little more. Stephen Saletta 15:45, 13 November 2007 (CST)

Nice Rewrite

Very nice. Much clearer and easier to read. Couple of comments:

It was clear from the statistics at the time that changes in the money supply do not have an instantaneous effect upon prices.

At what time?

...the control of inflation was widely adopted by governments and central banks in the early 1980s with results that are described below.

Where? Please link.

techniques for testing relationships incorporating time-lags were applied to United States statistics , and they indicated that price increases had followed money supply increases with lags that were long and variable. Critics argued that this was not conclusive proof, and further statistical tests were attempted to test the Keynesian theory that the transmission mechanism was such that increases in the money supply would not affect the prices of goods because they would be spent on financial assets.

I think this might be a little too detailed of a description for an introduction. I would suggest something simpler along the lines of "... an empirical question whether newly created dollars are spent on goods and services or on interest bearing securities as claimed by Keynesians..."

On Money supply: Evidence that emerged some years after the initial formulation of monetarism established its validity, together with some serious limitations upon its usefulness.

I think this paragraph might need some rewording. Stephen Saletta 20:00, 15 November 2007 (CST)

Thank you for your reassuring comment, Stephen. I had been wondering whether the reversion to a textbook-style explanation would be more acceptable. I have tried to meet your criticisms by deleting unnecessary verbiage - bearing in mind, also, that the subject seemed to be getting too much space. Nick Gardner 03:29, 16 November 2007 (CST)

What's left to do?

It is time to consider what has been left out. Under economic policy I plan to cover the supply side and globalisation constraints on domestic policy. What else should be included? And should there be a concluding section dealing with speculative issues? Suggestions please!

Nick Gardner 07:24, 28 September 2007 (CDT)

Fin

That's that - for the time being, at least. I may come back with some changes in a few months' time.

I will try to get round to draft the articles that I have "invented" by creating links, but I hope somone else will help out regarding the dissenting views.

I am sorry that my plea for comments seems so far to have fallen on deaf ears, but I live in hope!

Nick Gardner 11:28, 12 October 2007 (CDT)

Well, there are some things still needed, i think. I agree with the above comment that the monetarism section needs to be much clearer. We need some defintiions and explanations about the money supply, problems of measuring it, and I would even suggest some empirical discussion of those not-so-wonderful days of monetarist policy obsession in the first days of Thatcher. What is written at the moment is a little abstruse, although interesting.

There is generally a shortage of links in this article to core issues [such as money supply, inflation, taxation. etc] This should be the next step before approving the article, because it really does need to be both an intrdouction and a gateway to more specific studies.--Martin Baldwin-Edwards 08:32, 13 November 2007 (CST)

It will be easy for me to add further material on monetarism because I have written extensively on the subject - and some of it is still around. I was fascinated at the time by its transition in a couple of years from a matter of obsessive interest to something that nobody speaks of. I have been so close to it in the past that I probably lack an observer's perspective on the matter, so I am glad of your guidance about the current demand for an understanding of the subject. I accept (though with a little surprise) your advice that it is a matter of current interest, and I will willingly add some further drafting. (I might perhaps borrow some of it from the History of Economic Thought article where I had thought it really belonged!(?))

I had wondered about the policy of adding links, and had been rather inclined to suppose it to be better to add them only when there seemed to be a prospect that the articles to which they were to connect would be filled in the not-too-distant future. (I had noticed some draft articles in which nearly every sentence contained a link, many of which referred to matters that seemed too trivial to deserve an article, and wondered what purpose that could serve). I suppose there must be some limit - but I will willingly test it by adding a lot and getting your reaction. Nick Gardner 15:54, 13 November 2007 (CST)

The circular flow diagram

I don't like it. It adds nothing to what is said in the text and it is apt to distract the reader. I want to remove it. Does anyone object? Nick Gardner 09:50, 13 November 2007 (CST)

I must confess to a slight preference for keeping it, on the grounds that (a) conceptual diagrams aid some readers, even if they are not essential; (b) a little picture or chart in an encyclopedia entry is always aesthetically good. These are not wholly compelling reasons, so I wouldn't insist:-) --Martin Baldwin-Edwards 11:24, 13 November 2007 (CST)

I must confess that the grounds for my objection are partly aesthetic: to me it looks garishly out of place. Nick Gardner 16:02, 13 November 2007 (CST)

On its own it does look a bit out of place. I will try and dig some other pictures up. Maybe stick a photo of Milton over there by monetarism, etc... if it looks bad we can always take them out. Stephen Saletta 20:14, 13 November 2007 (CST)

It seems to bring to the reader a direct view of what is in the text. From my point of view, flows are always better described in diagrams . Anh Nguyen