Challenges and Changes Facing Macroeconomics in the Great Era

Liu Yuanchun

doi:doi:10.16538/j.cnki.jsufe.2022.04.001

Summary

This paper summarizes the five changes of the Great Era in the past 20 years: The first is , the global depression caused by the American financial crisis in 2008. The second is that , since 2010, the world has fallen into “secular stagnation”. The third is that , the pandemic and stagnation caused by the COVID-19 epidemic in 2020. The fourth is that, the digital economy era opened after the wave of informatization. Thw fifth is that , the world began to enter a century of unprecedented changes. The above five aspects show that the world economy has undergone structural upheaval under the superposition of various forces. This upheaval is very different from the generally assumed general market economic environment, which has led to great changes in macroeconomics, thus posing the following four challenges to macroeconomics: First, why did the “scientific” economic policy not prevent mankind from economic crisis? Second, does the emergence of “secular stagnation” mean the deep failure of economics and economic policy? Third, the Great Pandemic causes the weakness of macroeconomics, so will epidemic economics trigger a revolution in economics? Fourth, new technology, new model and new economy bring new challenges to the impact of micro foundation. The four challenges correspond to the four typical facts respectively. They appear at the same time, which have not been completely encountered in other times. The superposition of shocks deserves our attention. We are in a super Great Era. Compared with the traditional system, the new operating system shows a strong fracture. This paper deeply analyzes the practical and theoretical innovations made by the macroeconomic community in response to these challenges, and points out that the reflections on financial failure and macro philosophy brought about by the financial crisis, the reflections on low interest rates and economic stagnation brought about by long-term stagnation, the reflections on various economic indicators and economic logic under extreme conditions brought about by the epidemic and the war, and the reflections on micro assumptions of macroeconomics and changes in economic transmission mechanism brought about by digital technology revolution, have constituted the four main lines of the future development of macroeconomics. No matter whether these theoretical developments are marginal adjustment or revolutionary reconstruction, we need to embrace them with an open attitude.