The Basic Proposals

The proposals for resolving the present crisis in macroeconomic policy that are put forward in this book are based on the simple proposition that some policies for reducing unemployment are less inflationary (or more likely to reduce inflation) than are others. So long as this is true, a change in the direction of giving more stimulus in the least inflationary way, coupled with an offsetting movement of some other instrument (one that is likely to cause more inflation for a given stimulus) in a relatively contractionary direction, can reduce the upward pressure on prices at any given level of unemployment. It is therefore not necessary for either form of stimulus taken alone to exert downward pressure on the price level. Even if it is true that a particular (high) level of unemployment will help to check inflation (a view that may or may not be defensible, depending partly on the instruments used to raise unemployment), the speed with which that aim will be achieved at that level of unemployment depends partly on the combination of measures used. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.