The 1964 Kennedy-Johnson tax cut is often cited as the single most successful application of Keynesian stabilization policy. The author challenges this orthodox historical view by exposing the haphazard planning, simplistic economic theorizing, irreconcilable numerical projections, and partisan political influences on the Council of Economic Advisers. The focus of the book is on the decisions, advice and actions of the three Chairmen of the Council during the 1960s: Walter Heller, Gardner Ackley and Arthur Okun. They were the authors of the ambitious and optimistic new economics that attempted to manipulate aggregate demand in the US economy to reach potential output. By 1965 this goal was achieved, but when Vietnam War spending and Great Society programs were added to the tax cut, the subsequent policy paralysis in the face of a surging economy clearly indicated a lack of symmetry in fiscal policy implementation. Much of the evidence for this revisionist view comes from the participants own statements in the form of White House memoranda and confidential reports as well as from counter-factual exercises that allow alternative policies or swifter responses. This book will be of great interest to macroeconomists as well as to scholars and students interested in economic history and in the formulation and implementation of economic policy.

Most macroeconomic theory has focused on goods and money rather than on labour, but this book goes someway to redressing this balance. It examines a wide range of labor-market issues from the perspective of modern macroeconomics. It considers policy issues, as well as theory, and criticises both Keynesian and New Classical approaches.

Most macroeconomic theory has focused on goods and money rather than on labour, but this book goes someway to redressing this balance. It examines a wide range of labor-market issues from the perspective of modern macroeconomics. It considers policy issues, as well as theory, and criticises both Keynesian and New Classical approaches.

This is a textbook designed for senior undergraduate courses in monetary economics, advanced macroeconomics, or macroeconomic policy. Students will feel comfortable with this material if they have completed an intermediate course in macroeconomics, relying on one of the more demanding texts in this field. The prime focus of the book is on the role of money in the macroeconomy and on the place of monetary policy as an instrument for controlling inflation and unemployment. There are only three important macrovariables that are features: the rate of inflation, the interest rate, and output or income. Behavioural relationships in the goods, money, and labor markets determine these variables, using only the now common IS-LM-AS model. The model is not ideological, but opposing views of the efficiacy of stabilization policy are allowed to confront each other. There is a great deal of emphasis on relating the theoretical propositions to recent Canadian and U.S. macroeconomic performance. To expose students to diversity of experience, both countries receive equal treatment, one to serve as an example of a closed economy and the other as an example of an open economy. The book relies mostly on verbal and diagrammatical exposition; equations are used to show why and how curves shift in the diagrams. Also, numerical examples are provided in 'boxes' at appropriate places in the text, and exercises are given at the end of most chapters. A booklet containing answers to these exercises is available to instructors on request to the author.