TY  - JOUR
AU  - Buiter,Willem H.
TI  - The Right Combination of Demand and Supply Policies:  The Case for a Two-Handed Approach
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2333
PY  - 1987
Y2  - August 1987
UR  - http://www.nber.org/papers/w2333
L1  - http://www.nber.org/papers/w2333.pdf
N1  - Author contact info:
Willem H. Buiter
Citigroup Centre
Canada Square, Canary Wharf
London E14 5LB
UNITED KINGDOM
E-Mail: willembuiter@btinternet.com
AB  - The paper considers the analytical underpinnings of the scope for and limits of demand and supply management. After restating a general policy effectiveness result for New-Classical macroeconomic models, several non-Walrasan equilibrium models are considered. These use the efficiency wage hypothesis to generate equilibrium unemployment in the labor market and imperfect competition in the goods market to generate scope for demand management. Hysteresis models of the natural rate are also reviewed briefly. Tentative implications are drawn for the contributions of demand and supply management to the resolution of the European unemployment problem.
ER  -