The Debate Over Stabilization Policy by Franco Modigliani - 9780521189705

The Debate Over Stabilization PolicyAuthor(s): Franco Modigliani\nFormat: Paperback\nPublisher: Cambridge University Press, United Kingdom\nImprint: Cambridge University Press\nISBN-13: 9780521189705, 978-0521189705\nSynopsis\nThis 1986 book examines some of the main issues that have characterized macroeconomics: the debate between 'monetarists' and 'Keynesians'; the response to demand shocks and supply shocks, by which the monetary authorities control aggregrate nominal income and the use and relevance of the money supply as a target; and the consumption function and the determinants of wealth. It shows that Keynesian stabilization policies succeeded in reducing instability due to demand shocks dramatically, but that no aggregrate demand policy can stabilize both price and employment simultaneously after a supply shock. However, by assigning an overall 'social cost' to (excess) unemployment and (initially) unexpected inflation, an optimism path can be derived. In looking at the cons.