Stabilization Policy Ten Years After

James Tobin

JT

James Tobin

Discussants: Edmund S. Phelps and

ESP

Edmund S. Phelps Columbia University

William Poole

WP

William Poole

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.