Roles of Macroeconomic Balance, Models, and Stability in Modern Economies (Essay Sample)

The role of Macroeconomics in creating Economic Stability
Edwin Omwenga
[Course Information]
[Instructor’s Name]
October, 2020
Macroeconomic balance is critical for economic stability and because many changes are happening, experts have to formulate various economic policies to regulate an economy. This is hard to achieve, especially for developing countries. To equip economists with a set of skills that enable them to make appropriate policies, macroeconomics has been made fundamental in the study of economics. Experts use economic models in economic forecasting, and they are creating and adopting new macroeconomic policies to correct imbalances in the economy and stabilize it.[. Jose A. Ocampo, “A Broad View of Macroeconomic Stability,” DESA Working Paper No. 1, 2005, 20, http://www.un.org/esa/desa/papers/2005/wp1_2005.pdf, accessed October 2016.]
Policymakers and scholars have for many years been studying macroeconomic balance as one of the methods of stabilizing the economy. One way of achieving this is the use of economic models, which have been in place since the 1960s. When implemented correctly, credible economic models create a balance between endogenous and exogenous variables within the aggregate economy. This balance makes indicators more reliable and enhances economic forecasting. Economic models are crucial in the study of modern economics, and most of them are created to correct macroeconomic imbalances.[. Fontana Giuseppe, “Whither New Consensus Macroeconomics? The Role of Government and Fiscal Policy in Modern Macroeconomics,”