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Contractionary Effects of Stabilization and Long-Run Growth

Dutt, Amitava K.; Ros, Jaime

This paper reviews models of long-run growth which assume that the economy is not on its so-called "normal" path, and in which both aggregate demand and aggregate supply issues have a role in determining long-run growth. This review shows that contractionary stabilization policies can have adverse long-run effects on growth, and may in fact exacerbate the problems they were intended to solve.

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More About This Work

Academic Units
Initiative for Policy Dialogue
Publisher
Initiative for Policy Dialogue
Series
Initiative for Policy Dialogue Working Paper Series
Published Here
February 4, 2010

Notes

The opinions expressed in these papers represent those of the author(s) and not The Initiative for Policy Dialogue. These papers are unpublished and have not been peer reviewed. Please do not cite without explicit permission from the author(s).

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