THIS ISSUE of Brookings Papers on Economic Activity contains papers
and discussions presented at the forty-fifth conference of the Brookings
Panel on Economic Activity, which was held in Washington, D.C., on
April 7 and 8, 1988. Two articles present new Keynesian theories of the
macroeconomy and compare, against alternative theories, the ability of
the new theories to explain key features of the economy. A third article
examines the recent rapid growth of debt among U.S. nonfinancial
corporations and its implications for their financial stability. A fourth
article looks at the effect that capital market imperfections have on U.S.
business investment and its financing. One report in this issue analyzes
European unemployment and the likely consequences of demand stimulation
in Europe. A second report looks at the extended slowdown in
U.S. wage inflation.