ABSTRACT

The results of macroeconomic policy are often unpredictable. One of the major reasons for this is the importance of confidence and expectations in economic affairs. Confidence, Credibility and Macroeconomic Policy explores this interaction between confidence and expectations, and the credibility of the government's financial policies. The volume is divided into three parts. * An overview of the inter-relationship between fiscal policy, credibility and inflation * Empirical research on the importance of public confidence and expectations to the success of fiscal and monetary policy. * The definition and functions of consumer confidence as it is measured today. Confidence, Credibility and Macroeconomic Policy will be an invaluable guide for all those interested in macroeconomic policy.

chapter 2|17 pages

Bond-financed deficits, taxation and expectations: An experimental test of the Ricardian equivalence theorem

An experimental test of the Ricardian equivalence theorem*

chapter 3|12 pages

Monetary credibility and national output: An experimental verification of the Lucas ‘islands’ explanation of business cycles

An experimental verification of the Lucas ‘islands’ explanation of business cycles*

part |2 pages

Part II Confidence and credibility factors in historical perspective

chapter 5|20 pages

Deficit finance, expectations and real money balances

The operation of the inflation tax in Germany after the First World War

chapter 6|27 pages

Does exchange rate pegging foster monetary credibility? The European Monetary System and the 1980s disinflation

The European Monetary System and the 1980s disinflation*

part |2 pages

Part III Consumer confidence and macroeconomic stabilisation in the 1990s

chapter 7|9 pages

Consumer confidence in today’s macroeconomy

Definition, measurement and potential importance