Keynesianism, Pennsylvania Avenue Style: Some Economic Consequences of the Employment Act of 1946 | Zendy

J. Bradford De Long | Zendy

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Keynesianism, Pennsylvania Avenue Style: Some Economic Consequences of the Employment Act of 1946

Author(s) -

J. Bradford De Long

Publication year - 1996

Publication title -

the journal of economic perspectives

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 9.614

H-Index - 196

eISSN - 1944-7965

pISSN - 0895-3309

DOI - 10.1257/jep.10.3.41

Subject(s) - allocative efficiency , recession , world war ii , loyalty , business cycle , rationality , economics , government (linguistics) , principal (computer security) , political science , economic policy , law , keynesian economics , microeconomics , linguistics , philosophy , computer science , operating system

The Employment Act of 1946 created the Council of Economic Advisers (CEA)--and served as a convenient marker of the government's acceptance of the burden of stabilizing the macroeconomy. The willingness of post-WWII governments to let automatic stabilizers function in recessions may well have moderated the post-WWII business cycle. The CEA has also served as an advocate of allocative efficiency in economic policy. Its relative success can be primarily ascribed to Chairman Arthur Burns, who hired a CEA staff composed of short-term appointees whose principal loyalty was to economic rationality.

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