Tuesday, December 1, 2015

Mark Thoma, try looking at the chart and quit quoting recipes

Traditionally, macroeconomic policy has been divided into two distinct types. The first type, stabilization policy, attempts to keep output and employment as close to their full employment levels as possible. The idea behind these policies is to minimize, or even eliminate, short-term boom-bust cycles around the natural rates of output and employment caused by fluctuations in aggregate demand.
The second type of policy, growth policy, works on the supply-side and attempts to keep the long-term natural rates of output and employment growing as fast as possible. Thus, if the long-term natural growth rate of output is, say, 2.5 percent, supply-side policy would try to increase this rate, while demand-side stabilization would try to keep us from deviating from it, whatever it might be.
Now check the chart and ask where the recessions occur.  Your answer will be on presidential regime change.  There is only one explanation , DC  makes recessions, it does not prevent them.  Looking at the chart is something Kanosians need to learn.

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