The Supply-Side Model and the New Economy


By the early 1980s, the macroeconomic landscape had changed significantly for the United States and several other Western European economies. Once-successful Keynesian discretionary demand-side stabilization policies appeared to be ineffective. The output-inflation tradeoff seemed to be no longer in evidence—expansionary fiscal and monetary stimuli only yielded additional inflation with no accompanying increase in GDP growth or employment. The Phillips curve, for all intents and purposes, appeared to be dead.


Monetary Policy Labor Supply Central Bank Real Wage European Central Bank 
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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Rutgers Business SchoolRutgers UniversityNewarkUSA

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