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Contractionary Effects of Stabilization and Long-Run Growth

Working Paper #33

Jaime Ros, Amitava Dutt

Paper  570kb pdf

This paper reviews models of long-run growth which assume that the economy is not on its so-called 'normal' path, and in which both aggregate demand and aggregate supply issues have a role in determining long-run growth. This review shows that contractionary stabilization policies can have adverse long-run effects on growth, and may in fact exacerbate the problems they were intended to solve.

About the Authors

Jaime Ros
Professor of Economics
University of Notre Dame

Amitava K. Dutt
Professor of Economics
University of Notre Dame

Publication Information

Type Working Paper
Program Macroeconomic Policy
Posted 06/02/03
Download 570kb pdf
# Pages 38