Janet L. Yellen and George A. Akerlof , in 2006 would argue that stabilization policy would provide better outcomes to the social fabric of any economy. Basically, that stabilization policy would significantly lower unemployment.
Interestingly, Chairwoman Yellen was the daughter of a medical doctor when the Great Depression hit. He charged $2.00 to those that could pay. Her father recognized the fact unemployment was a dangerous circumstance to anyone.
Stabilization policy is a macroeconomic strategy enacted by governments and central banks to keep economic growth stable, along with price levels and unemployment. Ongoing stabilization policy includes monitoring the business cycle and adjusting benchmark interest rates to control aggregate demand in the economy. The goal is to avoid erratic changes in total output, as measured by Gross Domestic Product (GDP) and large changes in inflation; stabilization of these factors generally leads to moderate changes in the employment rate as well.
It is a strategy to unravel the Phillips Curve and end bubble and bust as an economic strategy. Chronically stable economic policy that controls inflation, maintains a steady unemployment rate and provides room for all generations to be employed. As the population grows, demand grows and in a Stabilized Economy there is more room for employment simply because the community demands it. That 5 percent chronic unemployment rate allows for a place to store those needing a job while the economy opens up to provide from them. I mean children are born and they aren't looking for employment for nearly 16 years. Government can't even get that right? Those seeking employment aren't exactly a surprise when they come of age.
Yellen, Janet L. and Akerlof, George A., Stabilization Policy: A Reconsideration. Economic Inquiry, Vol. 44, No. 1, pp. 1-22, 2006.
...In this paper (click here) we explore the economic rationale for stabilization as a policy goal, concluding that it does, in fact, deserve high policy priority. We survey a large body of literature that critiques the validity of key assumptions in Lucas’s argument. We also offer suggestive evidence that stabilization policy can significantly reduce average levels of unemployment by providing stimulus to demand in circumstances where unemployment is high but underutilization of labor and capital does little to lower inflation. A monetary policy that vigorously fights high unemployment should, however, also be complemented by a policy that equally vigorously fights inflation when it rises above a modest target level. The Federal Reserve Act thus wisely enunciated price stability and maximum employment as twin goals for monetary policy....
Interestingly, Chairwoman Yellen was the daughter of a medical doctor when the Great Depression hit. He charged $2.00 to those that could pay. Her father recognized the fact unemployment was a dangerous circumstance to anyone.
Stabilization policy is a macroeconomic strategy enacted by governments and central banks to keep economic growth stable, along with price levels and unemployment. Ongoing stabilization policy includes monitoring the business cycle and adjusting benchmark interest rates to control aggregate demand in the economy. The goal is to avoid erratic changes in total output, as measured by Gross Domestic Product (GDP) and large changes in inflation; stabilization of these factors generally leads to moderate changes in the employment rate as well.
It is a strategy to unravel the Phillips Curve and end bubble and bust as an economic strategy. Chronically stable economic policy that controls inflation, maintains a steady unemployment rate and provides room for all generations to be employed. As the population grows, demand grows and in a Stabilized Economy there is more room for employment simply because the community demands it. That 5 percent chronic unemployment rate allows for a place to store those needing a job while the economy opens up to provide from them. I mean children are born and they aren't looking for employment for nearly 16 years. Government can't even get that right? Those seeking employment aren't exactly a surprise when they come of age.
Yellen, Janet L. and Akerlof, George A., Stabilization Policy: A Reconsideration. Economic Inquiry, Vol. 44, No. 1, pp. 1-22, 2006.
...In this paper (click here) we explore the economic rationale for stabilization as a policy goal, concluding that it does, in fact, deserve high policy priority. We survey a large body of literature that critiques the validity of key assumptions in Lucas’s argument. We also offer suggestive evidence that stabilization policy can significantly reduce average levels of unemployment by providing stimulus to demand in circumstances where unemployment is high but underutilization of labor and capital does little to lower inflation. A monetary policy that vigorously fights high unemployment should, however, also be complemented by a policy that equally vigorously fights inflation when it rises above a modest target level. The Federal Reserve Act thus wisely enunciated price stability and maximum employment as twin goals for monetary policy....
