A View Of Macroeconomic Stability

The present paper summarizes the history of macroeconomics, the way macroeconomics has developed over time, the influences and trends which appeared during these years. In order to understand what is needed from macroeconomic stability, we need to follow the evolution of the concept, of the limits reached by a certain model and of the approaches which define the macroeconomic models. The complexity of the problems arisen during economical recession has led to a continuous enhancement of the macroeconomic models, meanwhile looking for a model which would respond as much as possible to the identified problems. Also, I have approached macroeconomic stability starting with concepts, with the way it is conceived to work, with the policies which come to support macroeconomics and, implicitly, macroeconomic stability. I have approached the role of macroeconomic stability in resolving financial crises and also the way macroeconomic policies should work or be used both during economical growth and during recession periods. On a short-term, the settling role of fiscal policy is based on the efficiency of automatic stabilizers and on the ability of the governments to create a fiscal stimulus in due time. The governments can deliberately modify public expenses and public fiscal instruments in order to compensate the fluctuations of the business cycle, but, ultimately, the structure of the fiscal system has to be designed for maximizing economical efficiency and market flexibility, thus increasing the endurance of the economy when facing shocks.. During the past two decades and until the initiation of the 2008 crisis, the specialty literature regarding monetary and macro-prudential policies has recorded a diversity of opinions, but is still far from a consensus regarding its objectives. Generally speaking, macro-prudential policy is seen to focus on financial stability, but there is no clear definition of financial stability.