Milton Friedman was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis,monetary history and theory and the complexity of stabilization policy. With George Stigler,Friedman was among the intellectual leaders of the Chicago school of economics,a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago that rejected Keynesianism in favor of monetarism until the mid-1970s,when it turned to new classical macroeconomics heavily based on the concept of rational expectations. Several students,young professors and academics who were recruited or mentored by Friedman at Chicago went on to become leading economists,including Gary Becker,Robert Fogel,Thomas Sowell and Robert Lucas Jr.
In economics,a recession is a business cycle contraction that occurs when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending. This may be triggered by various events,such as a financial crisis,an external trade shock,an adverse supply shock,the bursting of an economic bubble,or a large-scale anthropogenic or natural disaster.
In economics and political science,fiscal policy is the use of government revenue collection and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variables developed in reaction to the Great Depression of the 1930s,when the previous laissez-faire approach to economic management became unworkable. Fiscal policy is based on the theories of the British economist John Maynard Keynes,whose Keynesian economics theorised that government changes in the levels of taxation and government spending influence aggregate demand and the level of economic activity. Fiscal and monetary policy are the key strategies used by a country's government and central bank to advance its economic objectives. The combination of these policies enables these authorities to target inflation and to increase employment. In modern economies,inflation is conventionally considered "healthy" in the range of 2%–3%. Additionally,it is designed to try to keep GDP growth at 2%–3% percent and the unemployment rate near the natural unemployment rate of 4%–5%. This implies that fiscal policy is used to stabilise the economy over the course of the business cycle.
Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes,decreasing regulation,and allowing free trade. According to supply-side economics,consumers will benefit from greater supplies of goods and services at lower prices,and employment will increase. Supply-side fiscal policies are designed to increase aggregate supply,as opposed to aggregate demand,thereby expanding output and employment while lowering prices. Such policies are of several general varieties:
- Investments in human capital,such as education,healthcare,and encouraging the transfer of technologies and business processes,to improve productivity. Encouraging globalized free trade via containerization is a major recent example.
- Tax reduction,to provide incentives to work,invest and take risks. Lowering income tax rates and eliminating or lowering tariffs are examples of such policies.
- Investments in new capital equipment and research and development (R&D),to further improve productivity. Allowing businesses to depreciate capital equipment more rapidly gives them an immediate financial incentive to invest in such equipment.
- Reduction in government regulations,to encourage business formation and expansion.
In economics,the fiscal multiplier is the ratio of change in national income arising from a change in government spending. More generally,the exogenous spending multiplier is the ratio of change in national income arising from any autonomous change in spending. When this multiplier exceeds one,the enhanced effect on national income may be called the multiplier effect. The mechanism that can give rise to a multiplier effect is that an initial incremental amount of spending can lead to increased income and hence increased consumption spending,increasing income further and hence further increasing consumption,etc.,resulting in an overall increase in national income greater than the initial incremental amount of spending. In other words,an initial change in aggregate demand may cause a change in aggregate output that is a multiple of the initial change.
The economy of governments covers the systems for setting levels of taxation,government budgets,the money supply and interest rates as well as the labour market,national ownership,and many other areas of government interventions into the economy.
Arthur Betz Laffer is an American economist and author who first gained prominence during the Reagan administration as a member of Reagan's Economic Policy Advisory Board (1981–1989). Laffer is best known for the Laffer curve,an illustration of the theory that there exists some tax rate between 0% and 100% that will result in maximum tax revenue for government. In certain circumstances,this would allow governments to cut taxes,and simultaneously increase revenue and economic growth.
David Kenneth Miles is a British economist. Born in Swansea,he has spent his working life in London,in teaching,business and the public sector. He is a professor at Imperial College London,and was Chief UK Economist of Morgan Stanley bank from October 2004 to May 2009. He was appointed to the Bank of England's interest-rate-setting Monetary Policy Committee (MPC) from 1 June 2009 to June 2012 and again from June 2012 to 31 August 2015,before being replaced by Gertjan Vlieghe. According to the Bank of England,"As an economist he has focused on the interaction between financial markets and the wider economy.". In December 2020 he was appointed to the main board of the central Bank of Ireland. He was appointed to the Budget Responsibility Committee of the Office for Budget Responsibility (OBR) in December 2021. He took up that role in January 2022.
John Brian Taylor is the Mary and Robert Raymond Professor of Economics at Stanford University,and the George P. Shultz Senior Fellow in Economics at Stanford University's Hoover Institution.
Anthony Patrick Leslie Minford is a British macroeconomist who is professor of applied economics at Cardiff Business School,Cardiff University,a position he has held since 1997. He was Edward Gonner Professor of Applied Economics at the University of Liverpool from 1976 to 1997. In 2016,Minford was a notable member of the Economists for Brexit group which,in opposition to the consensus view of economists,advocated the UK leaving the European Union. His prediction of an 8% drop in the cost of living soon after leaving failed to materialise and was deemed to be incorrect.
Willem Hendrik Buiter CBE is an American-British economist. He spent most of his career as an academic,teaching at various universities. More recently,he was Chief Economist at Citigroup.
Modern monetary theory or modern money theory (MMT) is a heterodox macroeconomic theory that describes currency as a public monopoly and unemployment as evidence that a currency monopolist is overly restricting the supply of the financial assets needed to pay taxes and satisfy savings desires. According to MMT,governments do not need to worry about accumulating debt since they can create new money by using fiscal policy in order to pay interest. MMT argues that the primary risk once the economy reaches full employment is inflation,which acts as the only constraint on spending. MMT also argues that inflation can be addressed by increasing taxes on everyone to reduce the spending capacity of the private sector.
Sir Timothy John Besley,is a British academic economist who is the School Professor of Economics and Political Science and Sir W. Arthur Lewis Professor of Development Economics at the London School of Economics (LSE).
The Great Recession was a period of marked general decline observed in national economies globally,i.e. a recession,that occurred from late 2007 to 2009. The scale and timing of the recession varied from country to country. At the time,the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression. One result was a serious disruption of normal international relations.
Carmen M. Reinhart is a Cuban-American economist and the Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School. Previously,she was the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics and Professor of Economics and Director of the Center for International Economics at the University of Maryland. She is a research associate at the National Bureau of Economic Research,a Research Fellow at the Centre for Economic Policy Research,Founding Contributor of VoxEU,and a member of Council on Foreign Relations. She is also a member of American Economic Association,Latin American and Caribbean Economic Association,and the Association for the Study of the Cuban Economy. She became the subject of general news coverage when mathematical errors were found in a research paper she co-authored.
Economic Advisory Council to the Prime Minister of India (PMEAC) is a non-constitutional,non-permanent and independent body constituted to give economic advice to the Government of India,specifically the Prime Minister. The council serves to highlight key economic issues facing the country to the government of India from a neutral viewpoint. It advises the Prime Minister on economic issues like inflation,microfinance,and industrial output.
William Francis Mitchell is a professor of economics at the University of Newcastle,New South Wales,Australia and Docent Professor of Global Political Economy at the University of Helsinki,Finland. He is one of the founding developers of modern monetary theory.
Emmanuel Farhi was a French economist and professor of economics at Harvard University. His research focused on macroeconomics,taxation and finance. He was a member of the French Economic Analysis Council to the French Prime Minister from 2010 to 2012.
Stephanie A Kelton is an American heterodox economist and academic,and a leading proponent of Modern Monetary Theory. She served as an advisor to Bernie Sanders's 2016 presidential campaign and worked for the Senate Budget Committee under his chairmanship. She is also the author of The Deficit Myth,a New York Times bestseller,on the subject of Modern Monetary Theory.
Paul James Sheard is an Australian-American economist. Most recently he was Research Fellow and earlier M-RCBG Senior Fellow at Harvard Kennedy School's Mossavar-Rahmani Center for Business and Government,after previously being Vice Chairman of S&P Global. Sheard has held chief economist positions at Lehman Brothers,Nomura Securities,Standard &Poor's Ratings Services,and S&P Global. Prior to entering financial markets in 1995,he was an academic economist based in Australia,Japan and the United States,specializing in the Japanese economy and the economics of firm organization. He was a member of the World Economic Forum's Global Future Council on the New Agenda for Fiscal and Monetary Policy (2020-2022),having been a member of the WEF's Global Future Council on the New Economic Agenda (2018-2020) and of its Global Agenda Council on the International Monetary System (2010-2012). He is a member of the board of the Foreign Policy Association and is a member of the advisory board of the Levy Economics Institute of Bard College. He is a member of the Council on Foreign Relations,the Bretton Woods Committee and the Economic Club of New York. He attends and speaks regularly at conferences around the world,and his views on the global economy and economic policy are frequently cited in the international press.
