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BPEA | 1980 No. 1

Stabilization Policy Ten Years After

James Tobin Edmund S. Phelps and
ESP
Edmund S. Phelps Columbia University
William Poole

1980, No. 1


WHEN the Brookings panel first met ten years ago, the U.S. governments managers of aggregate demand were cooling an economy suffering from an inflation 4 points higher than ten years before. The unemployment rate was 4.5 percent. Four years later, at the time of the panel’s thirteenth meeting, the demand managers were cooling an economy suffering from an inflation 6 points highers till. The unemployment rate was 5 percent. As the panel meets today, the government’s managers of aggregate demand are cooling an economy suffering from an inflation 7 points higher than ten years before. The unemployment rate is 7 percent and rising.