Macroeconomic Policy Demystifying Monetary and Fiscal Policy

This book is an applications-oriented text designed for individuals who desire a hands-on approach to analyzing the effects of fiscal and monetary policies. Significantly updated to provide an understanding of the post-financial crisis economy, the third

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Farrokh K. Langdana

Macroeconomic Policy Demystifying Monetary and Fiscal Policy Third Edition

Springer Texts in Business and Economics

More information about this series at http://www.springer.com/series/10099

Macroeconomic Policy is a lively and informative introduction to the diverse doctrines of macroeconomic theory. Professor Robert E. Lucas, Jr. Recipient of the 1995 Nobel Prize in Economics

Farrokh K. Langdana

Macroeconomic Policy Demystifying Monetary and Fiscal Policy Third Edition Foreword by W. Michael Cox

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Farrokh K. Langdana Rutgers Business School Rutgers University–Newark and New Brunswick Newark, NJ USA

ISSN 2192-4333 ISSN 2192-4341 (electronic) Springer Texts in Business and Economics ISBN 978-3-319-32852-2 ISBN 978-3-319-32854-6 (eBook) DOI 10.1007/978-3-319-32854-6 Library of Congress Control Number: 2016938675 1st edition: © Kluwer Academic Publishers 2002, Second printing 2004 2nd edition: © Springer Science+Business Media, LLC 2009 3rd edition: © Springer International Publishing Switzerland 2016 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG Switzerland

This book engineers a unique stealth approach to learning macroeconomics. Readers will be drawn in through the interconnected sets of policy analyses, fortified by innumerable relevant and imaginative examples, little realizing that they are absorbing an increasingly sophisticated set of macroeconomic tools along the way. Professor Richard C.K. Burdekin Jonathan B. Lovelace Professor of Economics Claremont McKenna College and Claremont Graduate School Claremont, CA, USA

To my wife, Mary

Foreword

Macroeconomic policy analysis has been in a state of flux since the early 1970s. Although the casual student of macroeconomics might expect that economists would have come to some agreement in our quest to