Introduction

This introduction presents an overview of key concepts discussed in the subsequent chapters of this book. The book summarizes the views of monetarists and supply-side economists on how monetary and fiscal policies ought to be designed in both the short run and the long run. Carmichael, Fahrer and Hawkins survey the theoretical literature on the macro-stabilization implications of wage indexation. In Valentine there is some theoretical discussion of financial indexation. Braun tries to draw some general lessons from incomes policy experience, focusing particularly on the Netherlands, the UK, Norway and Austria. Carmichael, Fahrer and Hawkins also include a brief section at the end of their paper on the international experience with wage indexation. Many of the developed economies attempted, some time between 1976 and 1983, to implement some form of incomes policy. Unfortunately these policies are extremely hard to evaluate. Many also adopted specific employment-creating policies.