Prices and Quantities: A Macroeconomic Analysis - Softcover

Okun, Arthur M

Softcover

ISBN 10: 0815764790 ISBN 13: 9780815764793

Publisher: Brookings Institution Press, 1981

Synopsis

During the past decade Arthur M. Okun, like many economists, focused attention on finding ways to fight inflation without sacrificing goals of high employment and prosperity. In recent years the economy has been plagued by stagflation the simultaneous persistence of high inflation and high unemployment. Traditional methods of aggregate demand management that have been reasonably successful in curing either one or the other of these problems have not been effective, and the nation has not been able to contain inflation even in periods of economic slack. It now seems clear that the economists’ traditional model that presumes short-run flexibility in wages and prices no longer holds for most of the industrial world, and hence the response of inflation to shifts in macroeconomic policy is weak. In this volume Okun seeks to explain that loss of responsiveness by analyzing how modern labor and product markets work and how they are structured. A central feature of Okun’s analysis is implicit contract theory, which recognizes that efficiency-maximizing decisions by business firms reflect long-term considerations as well as short-term changes in markets. His interpretation of microeconomic behavior and macroeconomic performance provides a basis for the design of policies to deal with stagflation.

About this edition

• Publisher: Brookings Institution Press
• Publication date: 1981
• ISBN 10: 0815764790
• ISBN 13: 9780815764793
• Binding: Paperback
• Edition number: 1
• Number of pages: 381