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Macropolicy in the Rise and Fall of the Golden Age

Macropolicy in the Rise and Fall of the Golden Age

(p.126) 3 Macropolicy in the Rise and Fall of the Golden Age
The Golden Age of Capitalism
Gerald A. EpsteinJuliet B. Schor
Oxford University Press

This chapter provides a more systematic analysis of the nature of demand management. Gerald Epstein and Juliet Schor show that monetary policy in particular was very important, first in accommodating the post-war boom and later, in restricting demand during the phase of stagnation. This chapter also discusses the institutional requirements for policy-making, especially the implications of the degree of independence enjoyed by central banks in formulating national monetary policies. Epstein and Schor perceive that the UK and the US, two countries with independent central banks, pursued significantly more restrictive monetary policies during the ‘golden age’. In contrast, the continental countries and Japan had much more accommodating policies. Given contemporary enthusiasm for monetarist-type approaches and increased central bank independence, it is worth remembering that during the ‘golden age’ these more accommodating countries posted significantly higher growth rates than the US and the UK.

Keywords:   demand management, Gerald Epstein, Juliet Schor, UK, US, Japan, continental countries, central banks, monetary policy, policy-making

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