The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Stabilization Policy

  • David Vines
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1757

Abstract

The term ‘stabilization policy’ normally refers to deliberate changes in government policy instruments in response to changing macroeconomic conditions, in order to stabilize the economy. It is often used to refer to the Keynesian policies which stemmed from Keynes’s General Theory: the new commitment of many Western governments after World War II to use policy to pursue high and stable employment. (An example is the UK White Paper on Employment Policy (Minister of Reconstruction 1944).) But other types of stabilization policies had been known previously (such as the return to the Gold Standard in the UK in 1925 in order to stabilize currency values (Moggridge 1986) and have been known since (such as the policy of monetary restraint carried out in the United Kingdom in the late 1970s and early 1980s in order to stabilize inflation). In fact stabilization policy cannot easily be distinguished from macroeconomic policy in general.

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • David Vines
    • 1
  1. 1.