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

  • Farrokh K. Langdana


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.


Interest Rate Unemployment Rate Monetary Policy Central Bank Government Spending 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Rutgers Business SchoolRutgers UniversityNewarkUSA

Personalised recommendations