For all those who are completely new to the concept of economics, the nine-1 discussion macroeconomic policies is a model that depicts the policies that a government will adopt to counter the current state of the economy. This discussion has been widely used by economists and policy makers in the United States and around the world for quite some time now. The purpose of this type of model is to provide a transparent depiction of the various policies that a government will undertake in order to achieve some kind of balance in the economy. For many years, this model has provided a very helpful guide for various kinds of economic policy makers to come up with the right kind of economic policy. It has also helped in minimizing any kind of mismanagement that might take place in the future as far as fiscal policy is concerned.
Now, the question that arises is: why is the nine-1 analysis so essential for the public at large? Is not it enough to just look at the basic economic indicators like unemployment rate, inflation, and consumer price index? Why is it important to go a step further and try and understand the impact of these policies on the economy?
Well, the answer to all these questions really lies in the need for accurate representation of the nine-1 policy scenario. When the US Federal Reserve, a central bank, adopted the nine-one policy, it was trying to bring about a rapid and an effective recovery in the economy. However, this kind of stimulus package did not last long because it was soon reversed by the recession. Economic analysts have been trying to provide an elaborate depiction of the impact of such kind of monetary and fiscal policies on the economy since long.
The nine-1 fiscal policy was introduced as a response to the recent global financial crisis, where most of the developed economies experienced a deep recession. While providing monetary stimulus, it was found that fiscal policy had a limited effect on the overall economic cycle and the real economy. The same arguments can be used to argue against any kind of fiscal policy which is implemented on a national level as it will not be able to stimulate the economy to the extent that is needed in order to emerge from the current recession.
It is only after the passage of the recession, when the introduction of the nine-1 discussion . . . . . . table emerged. The aim behind this initiative was to provide a simple way of tracking the effects of fiscal policy on the economy. Since this has not worked well, the idea of a new fiscal policy was brought into circulation. This was accompanied by the creation of the nine-1 forum, which is responsible for monitoring the macroeconomic policies being implemented in the country.
In addition to this, there are many other similar initiatives being carried out by the central bank and other authorities around the world. However, they are not as transparent or open as the discussions which take place on a regular basis. These discussions are important as they are able to alert the policy makers about any potential threat that may occur due to over inflation or deflation. With a sharp eye on this, they are able to control the supply of money in the economy. At the same time, they also have a tool through which they are able to counter this problem.