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The "Magic Square" of Economic Policy measured by a Macroeconomic Performance Index

Author

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  • Oliver Picek

    () (Department of Economics, New School for Social Research)

Abstract

The "Magic Square of Economic Policy" highlights four main goals of economic policy: growth, full employment, price stability, and balanced trade. A Macroeconomic Performance Index can be used to assign relative weights to the dierent goals within the Magic Square, giving a single index number per year per country. The legitimacy of the simplest weighting scheme that assigns equal weight to all four goals is discussed. The macroeconomic performance of eleven euro zone area countries is evaluated over time and across countries.

Suggested Citation

  • Oliver Picek, 2017. "The "Magic Square" of Economic Policy measured by a Macroeconomic Performance Index," Working Papers 1702, New School for Social Research, Department of Economics.
  • Handle: RePEc:new:wpaper:1702
    as

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    File URL: http://www.economicpolicyresearch.org/econ/2017/NSSR_WP_022017.pdf
    File Function: First version, 2017
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    References listed on IDEAS

    as
    1. Desai, Meghnad, 1994. "The Measurement Problem in Economics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 41(1), pages 34-42, February.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Macroeconomic Policy; Economic Performance; Misery Index; Magic Polygon; Magisches Vieleck; Magisches Viereck; Magic Rectangle; Macroeconomic Imbalances;

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access

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