TY  - JOUR
AU  - Barlevy,Gadi
TI  - The Cost of Business Cycles and the Benefits of Stabilization: A Survey
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10926
PY  - 2004
Y2  - November 2004
UR  - http://www.nber.org/papers/w10926
L1  - http://www.nber.org/papers/w10926.pdf
N1  - Author contact info:
Gadi Barlevy
Economic Research Department
Federal Reserve Bank of Chicago
230 South LaSalle
Chicago, IL  60604
Tel: 312/322-6379
Fax: 312/322-2357
E-Mail: gbarlevy@frbchi.org
AB  - This article reviews the literature on the cost of U.S. post-War business cycle fluctuations. I argue that recent work has established this cost is considerably larger than initial work found. However, despite the large cost of macroeconomic volatility, it is not obvious that policymakers should have pursued a more aggressive stabilization policy than they did. Still, the fact that volatility is so costly suggests stable growth is a desirable goal that ought to be maintained to the extent possible, just as policymakers are currently required to do under the Balanced Growth and Full Employment Act of 1978. This survey was prepared for the Economic Perspectives, a publication of the Federal Reserve Bank of Chicago.
ER  -