Economics at your fingertips  

Growth as an objective of economic policy in the early 1960s: the role of aggregate demand

Johannes Schwarzer ()

Cahiers d’économie politique / Papers in Political Economy, 2014, issue 67, 175-206

Abstract: This paper sheds light on economic policy discussions in the early 1960s about whether there is an optimal level of demand to maximise the rate of growth. This discussion was influenced by the Cold War, which urged policy makers particularly in the USA to achieve higher rates of growth than the Soviet Union. As it was assumed that good demand management can damp the business cycle, regulating and deciding upon the level of demand pressure in the economy was regarded as an important tool for economic policy. The main debate therefore evolved around the question whether or not the economy should be run at high demand pressure and inflation to foster growth or if some slack in the economy and deflationary tendencies are a prerequisite for a prosperous growth path.

Keywords: Economic policy; growth; aggregate demand; trade-off; Phillips curve (search for similar items in EconPapers)
JEL-codes: B22 E61 O40 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
142 rue du faubourg Saint-Martin. 75010 Paris, France.

Access Statistics for this article

Cahiers d’économie politique / Papers in Political Economy is currently edited by Claire Pignol

More articles in Cahiers d’économie politique / Papers in Political Economy from L'Harmattan
Bibliographic data for series maintained by Carlos Andrés Vasco Correa ().

Page updated 2022-04-28
Handle: RePEc:cpo:journl:y:2014:i:67:p:175-206