ABSTRACT
Willem H. Buiter’s paper consists of 4 sections. In his introduction he states that the “demand-side versus supply-side dichotomy” is no longer very useful, his most powerful argument being that “modern theoretical developments … suggest that demand and supply may not even conceptually be separated” (p. 306). Instead of utilizing the term demand-side policy, he prefers speaking of stabilization policy, which - among others - is to smoothen actual employment or to avoid deviations from full employment or a “natural” level of employment. And instead of using the term supply-side policy, he wishes the term structural or allocative policy to be applied which aims at, among others, reducing the natural rate of unemployment. While I will return to his case against the possibility of separating demand from supply later on, for the time being let me mention only that Willem Buiter himself does not refrain from talking of demand and supply, both in the analytical parts of his paper and in discussing policy advice.
