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Simple Macroeconomic Policies and Welfare: A Quantitative Assessment

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This paper investigates the welfare implications of macroeconomic policies that eliminate output volatility. We conclude that such policies can lead to welfare losses, even when compared with a simple macroeconomic policy that prescribes constant rates for taxes and money supply growth. We quantify the losses in terms of percent points of consumption levels. We find that they are, as often found in the related literature, small.

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  • Cunha, Alexandre & Araújo, Eurilton, 2014. "Simple Macroeconomic Policies and Welfare: A Quantitative Assessment," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 68(3), September.
    • Handle: RePEc:fgv:epgrbe:v:68:y:2014:i:3:a:16912
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    1. Cunha, Alexandre, 2013. "Optimal Exchange Rate Policy and Business Cycles," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 33(1), September.

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