New Economy Handbook - Abstract

Chapter 34

Macro Policy-Making in the New Economy
D. Baker (Center for Economic and Policy Research)

There were important experiments with both fiscal and monetary policy in the nineties. During the long expansion, both experiments appeared to be great successes. However, in retrospect, the situation appears much more complicated. This section examines the accepted wisdom on macroeconomic policy prior to the nineties and the extent to which it can still be viewed as valid now that the decade long expansion has ended.