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Stabilization Policy: Active vs. Passive by AchalGupta is a document available to read on EtoBox.
This chapter discusses two debates around stabilization policy: whether policy should be active or passive, and whether policy should be conducted by rule or discretion. Regarding the first debate, the chapter outlines arguments for and against active policy intervention during recessions. It also discusses the challenges of forecasting economic conditions and implementing policy given lags in effect. For the second debate, the chapter defines policy rules and discretion, and argues that rules help address
- Author
- AchalGupta
- Language
- EN