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Keynesianism, Pennsylvania Avenue Style: Some Economic Consequences of the Employment Act of 1946

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  • J. Bradford De Long

Abstract

The Employment Act of 1946 created the Council of Economic Advisers (CEA)--and served as a convenient marker of the government's acceptance of the burden of stabilizing the macroeconomy. The willingness of post-WWII governments to let automatic stabilizers function in recessions may well have moderated the post-WWII business cycle. The CEA has also served as an advocate of allocative efficiency in economic policy. Its relative success can be primarily ascribed to Chairman Arthur Burns, who hired a CEA staff composed of short-term appointees whose principal loyalty was to economic rationality.

Suggested Citation

  • J. Bradford De Long, 1996. "Keynesianism, Pennsylvania Avenue Style: Some Economic Consequences of the Employment Act of 1946," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 41-53, Summer.
  • Handle: RePEc:aea:jecper:v:10:y:1996:i:3:p:41-53
    Note: DOI: 10.1257/jep.10.3.41
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.10.3.41
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    References listed on IDEAS

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    1. Romer, Christina D, 1989. "The Prewar Business Cycle Reconsidered: New Estimates of Gross National Product, 1869-1908," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 1-37, February.
    2. J. Bradford DeLong & Lawrence H. Summers, 1986. "The Changing Cyclical Variability of Economic Activity in the United States," NBER Chapters, in: The American Business Cycle: Continuity and Change, pages 679-734, National Bureau of Economic Research, Inc.
    3. Eisner, Robert, 1969. "Fiscal and Monetary Policy Reconsidered," American Economic Review, American Economic Association, vol. 59(5), pages 897-905, December.
    4. Bernanke, Ben S, 1995. "The Macroeconomics of the Great Depression: A Comparative Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(1), pages 1-28, February.
    5. Nelson, Robert H, 1987. "The Economics Profession and the Making of Public Policy," Journal of Economic Literature, American Economic Association, vol. 25(1), pages 49-91, March.
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    Cited by:

    1. Claudia Fontanari, & Antonella Palumbo & Chiara Salvatori, 2019. "Potential Output in Theory and Practice: A Revision and Update of Okun`s Original Method," Working Papers Series 93, Institute for New Economic Thinking.
    2. Gabriel Di Bella, 2002. "The Significance of Federal Taxes as Automatic Stabilizers," IMF Working Papers 02/199, International Monetary Fund.

    More about this item

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N42 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: 1913-

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