chapter  16
Stabilizing an unstable economy and the choice of policy measures
Pages 35

As we approach the last decade of the twentieth century, our economic world is in apparent disarray. After two secure decades of tranquil progress following World War II, in the late 1960s the order of the day became turbulence – both domestic and international. Bursts of accelerating inflation, higher chronic and higher cyclical unemployment, bankruptcies, crunching interest rates, and crises in energy, transportation, food supply, welfare, the cities, and banking were mixed with periods of troubled expansions. The economic and social policy synthesis that served us so well after World War II broke down in the mid-1960s. What is needed now is a new approach, a policy synthesis fundamentally different from the mix that results when today’s accepted theory is applied to today’s economic system.