Macroeconomic Paradigms and Economic Policy

"The recent financial crisis has demonstrated the dangers of ignoring the factors that led to previous crises, and the effectiveness of the policies designed to deal with them. Over time, these macroeconomic policies have evolved, oscillating between state intervention and a free-market approach. Following a story that runs from the pre-Great Depression era up until the Financial Crisis of 2007-11, this book reveals an intimate connection between new macroeconomic ideas and policies and the events in the real economy that inspired them. It does this in an accessible, easy-to-follow style, first by focusing on the developments of economic theories and policies, and then by concentrating on the design of domestic and international institutions and economic governance. Written by three leading experts on the history of economic policy, the book is ideal for graduates and undergraduates studying macroeconomics, monetary policy and the history of economic thought"-- "A spiral of expected inflation and deflation. According to the first view,the crisis was mostly triggered by an exogenous fall in demand for goods and services (a leftward shift of the IS curve).This explanation is consistent with the evidence that shows a drop in both output and interest rates at the onset of the crisis - especially in 1931-1932"--