Macroeconomic Theorizing and the Instability of Post-Keynesian Capitalism

Feiwel, George R.
June 1980
Journal of Economic Issues (Association for Evolutionary Economi;Jun80, Vol. 14 Issue 2, p525
Academic Journal
The postwar macro performance of the U.S. economy is in astonishing contrast to the prewar stagnation, deep depression, and falling prices. Business cycles did not fade away, but their amplitude did moderate substantially. While still fairly removed from full and effective utilization of resources, for a quarter of a century we have witnessed a fairly remarkable upsurge in living standards, employment, and growth rates and have avoided damaging inflation. The growth of affluence was responsible for major transformations in the social fabric, preferences, and behavior of economic actors. There was also a fundamental change in the widely held views about the inevitability of business cycles and the desired targets of economic activity. The electorate became increasingly intolerant of instabilities when the actual rates transgressed those considered tolerable. The government assumed the task of stabilizing acute output and price instabilities and became aware that it could not operate beyond a range of political feasibility constraints however difficult to quantify.


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