Policy making
Each answer should be about half a page. No introduction or conclusion paragraphs. No fluff. The final will be graded more critically than weekly reading assignments so be thorough and precise. Write in an 11pt font, 1.5 spaced, with normal margins.
All questions cover material from your textbook, assigned readings, and lectures. Do not consult or cite other sources.
Answer 3 of the questions from Part A. Answer Part B.
What is NAIRU? Describe some of the shortcomings of using NAIRU as a policy making instrument. Suggest an alternative.
Outline the deficit hawk and deficit owl approaches to undesirably high levels of unemployment.
What is the mainstream explanation of Treasury bond issuance? What is the heterodox explanation of Treasury bond issuance?
In the media, the running of fiscal deficits is often linked to Central Banks ‘printing money’. Explain why this is a misrepresentation of operational practices associated with the conduct of fiscal policy.
Compare and contrast the mainstream and heterodox explanations for inflation and hyperinflation.
Describe functional finance in detail.
Describe Minsky’s Financial Instability Hypothesis. Is this the result of rational or irrational decision-making? Discuss the contradictions between individual rational behavior and social good in this context.

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