Abstract
It is now rather widely accepted that macroeconomic policy cannot by itself simultaneously produce both full employment and price stability. In fact, recent events in most of the industrialized part of the world suggest that it cannot even come close. This state of affairs contrasts sharply with the decade of the 1960s when fine-tuning was in vogue and when the economic report of the president could confidently predict that the business cycle might soon be eliminated. It was a time during which the nation’s leading economists, taking their script from Keynes, successfully made the case for discretionary fiscal policy to both the president and the American public. Not only was their faith infectious, but their good works also showed up in all of the economic indicators, and as a result, their influence grew. Even in those halcyon days, however, structural problems did not go unrecognized, and some experimentation with wage-price guidelines and manpower programs occurred. Nevertheless, these policies were clearly an addendum to the macro text.
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Sawhill, I.V. (1981). Labor Market Policies and Inflation. In: Claudon, M.P., Cornwall, R.R. (eds) An Incomes Policy for the United States. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-8763-0_11
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DOI: https://doi.org/10.1007/978-94-009-8763-0_11
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