Explain main arguments in favor of economic stabilization

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Discussion: Debates in Macroeconomics

This Discussion deals with the debates over macroeconomic policy, which include stabilization policy, monetary policy on rules versus discretion, zero inflation target, public debt, and reforming tax laws.

Read chapters 17 and 18, and remember to include references and links to the websites that are important contributors to your posts (comments).

There are pros and cons of using monetary and fiscal policy tools to stabilize the economy.

1. Explain the main arguments in favor of economic stabilization during recessions. Explain why policy lags could make stabilization policies counterproductive.

2. What are the justifications given in favor of more government involvement in the market economy? What are the reasons given in favor of less government involvement in the market economy?

Reference no: EM132570549

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