Macroeconomic regulation and control

Global control is a term coined by Karl Schiller expression for an economic policy concept, which was inspired mainly by the theoretical ideas of the economist John Maynard Keynes. In 1967, she was enshrined in law with the Stability and Growth Act.

The economic conception

The global control is an ongoing process of state influence on the course of economic development, without affecting the market economy is basically to be touched. According to Karl Schiller, 1966-1972 Federal Minister of Economics and from 1971 to 1972 in addition Federal Minister of Finance, is " channeling the market forces so that they are an enlightened and persistent economic and social policies - without escalate - retain their kinetic energy ." The means of global control act mainly on the demand side of the market. It is an adaptation of aggregate demand to the development of production potential, by be taken as deemed appropriate economic policies in the areas of fiscal, monetary, income and foreign trade policy. The results to be achieved economic policy are presented as magic square. This includes not least, a high level of employment. The specific objectives were a real growth rate of GNP of 4%, an unemployment rate of less than 0.8 % and an inflation rate of below 1%.

An essential element of which is the Concerted Action. The state occurs here " in a permanent dialogue with the associations of entrepreneurs, workers and the world of finance in order to meet about them and with their help his duties. " In addition there are a National Accounts and refined prognostic instruments (quantitative target forecast). With the already adopted under the Adenauer government / Erhard law on the formation of an Advisory Council on the Assessment of Overall Economic Development of 14 August 1963, the scientific advice to the national economic policy was institutionalized, in § 2, clause 2 and 3 of the Law on the Stability Act stated objectives of economic policy has been set.

Assessment

The economic crisis since the summer of 2008 in Germany has led to a discussion about the meaning and necessity of economic policy. An information letter for the German Bundestag on 22 January 2009 examines the German experience in terms of economic policy in the light of today's economic doctrines that have evolved from Keynesianism towards monetarism and new macroeconomics. As stimulus package will only " discretionary, one-time or repeated measures " treated. Claus -Martin Gaul, the author of this information letter, the politics of global control looks in the years 1967-1982 at a total of a failure.. Not least, had been a failure to limit next to the set of economic impacts, the public debt and to improve the flexibility and supply conditions of the German economy. The stabilization of the gross domestic product and employment were only partially successful; they had been purchased at the price of high inflation and rising public debt. Much emerged from it is the realization that problems that are more related to the supply side, can not be solved through demand-side stimulus. The subsequent analysis of economic policy was, however, in principle, subject to the difficulty that it is not to be made the basis of clear reference scenarios. Even sophisticated macroeconomic model analyzes can not adequately depict how the economic development of the Federal Republic of Germany without the use of demand-side stimulus programs would run. In contrast to Keynesian economics of the 1960s and 1970s and the monetarism of the 1980s and 1990s, but have so far no clear recommendations for action developed on the basis of recent theoretical insights of economic theory to economic policy .. but lessons have been learned when and from the failure of the global control which measures economic policies can be helpful, as Gaul.

The failure of Keynesian demand management declared with different factors:

• The lack of coordination between an expansionary fiscal policy and an opposite monetary policy of the Bundesbank (in an empirical comparative study has Fritz Scharpf examines the causes of the different performance of Sweden, Austria, the United Kingdom and the Federal Republic in 1982, which had followed all similar economic policies. Scharpf sees the crucial difference in the respective institutional environment of the individual economies. example, have led the Federal Republic of the independent status of the Bundesbank to a conflict between employment policy and the fight against inflation. This has depressed the growth rate in the final result and produces persistent unemployment, the conclusion of Scharpf. )
• Efficiency losses by federal coordination problems
• In the recession, although the government spending, however, were increased in the boom phase does not, as provided for in concept, lowered
• The global control generated a wage -price spiral of inflation.

Another problem is the delay between effects, the prediction or detection of an economic situation and the use of economic means. A counter-cyclical measure may thus lead to a procyclical amplification of an economic rash.