Macroeconomic Policy

IPD’s Macroeconomics Task Force aims to provide a comprehensive framework for addressing key policy issues facing developing countries. These include discussions of the appropriate objectives, instruments including tax policies, policy frameworks, and institutions. In particular, the Task Force seeks to differentiate economic tools from objectives. Much macroeconomic policy and analysis has confused intermediate with final variables. The objectives of macroeconomic policy include growth, employment, and improved living standards. Targets such as economic stability and low inflation should not be viewed as objectives in-themselves, but a means to the ultimate objective of long-term sustainable growth.

Keynes-Schumpeter

Both in countries at the economic frontiers and in countries striving to catch up with the economic leaders, the process of economic development involves continuing structural transformation. Empirical research leaves no doubt about that. A fundamental feature of the development process is the emergence and growth of new industries and the decline and often disappearance of old ones. Within industries, new firms replace older ones as the dominant players, and then later themselves may decline. The transformations generally involve both the private and the public sectors.

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