methods of controlling aggregate demand

Discussion in 'Economics' started by morganist, Jan 20, 2011.

  1. Please can we see if we can work out all of the options of controlling aggregate demand.

    I will start.

    Interest rate alterations.

    Taxation alterations.

    Quantitative Easing.

    Tariffs and Quotas.

    Wage changes to civil servants.

    Legislative intervention.

    Any more?
  2. sjfan


    Sigh... why don't you just use the same terminology as the rest of the world: fiscal policy and monetary policy.
  3. Its trying to control money that causes all the bubbles and contractions.
  4. There is a lot more to it than just monetary and fiscal policy. Also there are different techniques to both of these.

    I invent new methods.
  5. sjfan


    Hang on, you "invent new methods"?

    Of course there's a lot to it; But those are the two major branches of the taxonomy of methods of "controlling aggregate demand". Then, monetary policy sub divides into interest rate targeting, inflation targeting, communication channel, portfolio channel (QE), etc.

    Also, why do you want a list of different approaches? Just curious.

  6. I wanted to see whether there were any types of aggregate demand control I was unaware of. Currently monetary and fiscal policy are not viable they are constrained.

    By the way there is a lot more than monetary and fiscal policy. I have been working on the velocity of money, pension control among other things.
  7. sjfan


    For what it's worth, pension control is a form of fiscal policy. Controlling the velocity of money is a basic form of monetary policy. I'm not sure why why you think there are not? In general, anything that works via legislation and (+/-) through the govt branch is a type of fiscal policy. Anything done via the money supply is a type of monetary policy.

    Also, what do you mean by "not viable they are constrained." Constrained by what? Not saying that they are viable; just don't understand your objection.

  8. I have a good idea.


    ONe more thing.

    Aggregate demand does not exist.
    Aggregate supply does not exist.

    All these are absurd terminologies invented by those who try to micromanage the so called macro economy.

    All nonsense.
  9. Pension control is not fiscal policy if it is private pensions. Also I wanted to see what types of control within those two boundaries.

    They are constrained due to the high level of public and private debt creating greater consequences if monetary or fiscal policy are altered.
  10. sjfan


    Um.... if you are talking about controlling private pension through public sector actions, then it's fiscal policy. Otherwise, it's just private pension allocation activities. In the second case, most private pensions are 401(k) type, which means there's no much control you can assert other than through legislative means.

    "due to the high level of public and private debt" -> still not sure why high level of public and private debt constrain the US's monetary and fiscal policy. Monetary policy is arguably hampered by a contraction fiscal policy (Dodd-Frank, for example); Fiscal expansionary policies aren't going to have a problem funding itself by selling govt bonds - the last few auctions, like the ones before it, went about as well as can be expected.

    #10     Jan 21, 2011