Policy space and the changing paradigm in conducting macroeconomic policies in developing countries

Abstract

A stable macroeconomic environment is commonly considered to be conducive to long-term growth. Economists disagree, however, about whether price stability should be the central objective of macroeconomic policies or whether these policies should serve broader development goals. Furthermore, the concept of macroeconomic stability is itself subject to dispute, as reflected in the evolution of macroeconomic thinking and practice over the past quarter century.

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