Work, Well-Being, and a New Calling for Countercyclical Policy
Published in: International Journal of Epidemiology, v. 34, no. 6, Dec. 2005, p. 1222-1225
Posted on RAND.org on January 01, 2005
Economists in the tradition of John Maynard Keynes advocated activist countercyclical economic policies: increases in spending or decreases in taxes that are implemented during economic downturns in order to dampen business cycles. New policies took neoclassical emphases on fostering price stability, improving incentives to work and save, and increasing the potential for long-run growth. There is much to be said about the beneficial impacts of such policies in the long run, but incentivizing work necessarily tilts the fiscal policy in the procyclical direction, i.e. increasing spending during times that are already good, although that was probably never the original intent.