Key Macroeconomic Policy Tools
Annotated List of Documents
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Key Macroeconomic Policy Tools
and Their Coordination in Systematic Economic Management
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  1. Monetary Policy -- the effect of money growth on economic growth

    1. "Monetary Forecasting" of Economic Growth (1982, not yet on line)
      Use of money-growth formula, with precisely-adjusted trend values of M1 and the Money Demand Ratio, to estimate current trend of GDP growth even before end of quarter -- often more accurately than official preliminary estimate a month later.
     
  2. Fiscal Policy -- the effect of federal deficit/surplus on the economy.

    1. A Twin Deficit Perspective on the Federal Budget.
      Functionally, the present unified budget (and deficit) has two distinct components:
      • Policy Budget -- controlled by congressional tax and spending policies.
        To clarify that responsibility and its management, this should be a "stabilized-employment" ("full employment" -- 4% unemployment) version.
      • Economic Stabilization deficit or surplus -- the effect of the economy on the budget, and vice versa.
        In passive mode, this deficit component is traditionally called the "automatic stabilizer," but is actually controlled mainly by Federal Reserve-controlled unemployment rates. However, since this is a key component of the economy's National Credit Balance (between total Primary Financial Saving and total Primary Borrowing), it should be explicitly managed proactively by FASTA (below) to compensate for destabilizing swings in private borrowing and financial saving.
      Full-length article (12/94, revised 7/97)
      Shorter version (1/95)

    2. FASTA -- Formula-Administered Automatic Stabilization Tax Adjustments
      Systematically coordinated with monetary policy, FASTA is a potential main key to reducing interest rates, inflation, federal deficits and unemployment, and ensuring stable money growth and stable full-employment economic growth in a "free enterprise" economy.
      Full-length article (9/81)
      Shorter version (1/81)
     
  3. Monetary and Fiscal Policy Coordination

    1. Monetary and Fiscal Policy Sunshine Act (summary, 1st legis. version 5/83; revised 5/98, 1/00) Fed is required to publish recommendations for a specific real GDP "soft landing" approach to full employment, and explain how it is trying to achieve this. Congress and the President are required to prepare a "standardized employment" (4% unemployment) Policy Budget as the main basis for budget discussion and legislation. Combined with FASTA credit stabilization policy, this provides for more systematic coordination of monetary and fiscal policy.
     
  4. Anti-Inflation Policies

    1. Inflation Causes (1980)
      Initiating causes, inflation spiral, "tax-in-COLA syndrome," etc. (Detailed outline for several chapters in an unfinished book.)

    2. Full-Employment Anti-Inflation Tools (1998)
      Written to accompany the Monetary and Fiscal Policy Sunshine Act.

    3. Key Role of a "Soft Landing" (asymptotic) Recovery Path
      Key relationship of economic growth rate to operating rate. (No text online yet.)

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