Demand-Side Stabilization: Overheating, Hard Landing, and Everything in Between

Farrokh K. Langdana ()
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Farrokh K. Langdana: Rutgers University

Chapter Chapter 5 in Macroeconomic Policy, 2009, pp 69-105 from Springer

Abstract: Abstract In the previous chapter, we examined the possibility of a shift in the goods market equilibrium from E0 to a higher equilibrium E1, which equated to an equivalent rightward shift in the AD curve. This chapter continues the analysis with a discussion of the specific fiscal and monetary policies by which the aggregate demand (AD) curve can be shifted to enact demand-side stabilization. This will be followed by an in-depth description of overheating, soft-landings, and hard-landings. In later chapters, we will examine why a significant body of expectations-based research finds demand-side stabilization to be an ineffective policy prescription in some economies since the 1980s.

Keywords: Interest Rate; Unemployment Rate; Monetary Policy; Central Bank; Government Spending (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-0-387-77666-8_5

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DOI: 10.1007/978-0-387-77666-8_5

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