Stabilization Policies in the World Economy: Scope and Skepticism
Throughout the industrialized world, macroeconomic performance since the mid-1970s has been very poor, and the prospects in the near term remain bleak. While there is no consensus among macroeconomists regarding the diagnosis (or cure) of these ills, the major competing schools of thought have focused most of their blame on macroeconomic policy. This paper summarizes a series of studies, in collaboration with Michael Bruno, suggesting rather that supply shocks coupled with real wage rigidities are a central source of the poor macroeconomic performance. Various hypotheses are mentioned as a source for the resistance to real wage cuts, and some illustrations of the policy implications of supply shocks are provided.
|Date of creation:||Feb 1982|
|Publication status:||published as Sachs, Jeffrey. "Stabilization Policies in the World Economy: Scope and Skepticism." The American Economic Review, Vol. 72, No. 2 (May 1982), pp. 56-6 0.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin Neil Baily, 1981. "Productivity and the Services of Capital and Labor," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(1), pages 1-66.
- Irving B. Kravis & Robert E. Lipsey, 1981. "Prices and Terms of Trade for Developed-Country Exports of Manufactured Goods," NBER Working Papers 0774, National Bureau of Economic Research, Inc.
- Morley, R, 1979. "Profit, Relative Prices and Unemployment," Economic Journal, Royal Economic Society, vol. 89(355), pages 582-600, September.
- Phelps, Edmund S, 1978. "Commodity-Supply Shock and Full-Employment Monetary Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 10(2), pages 206-21, May.
- D. Grubb & R. Jackman & R. Layard, 1982. "Causes of the Current Stagflation," Review of Economic Studies, Oxford University Press, vol. 49(5), pages 707-730.
- McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
- Grossman, Sanford J & Hart, Oliver D, 1981. "Implicit Contracts, Moral Hazard, and Unemployment," American Economic Review, American Economic Association, vol. 71(2), pages 301-307, May.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0862. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.