Date of this Version
John Maynard Keynes's General Theory provided the analytical framework and the rationale for using discretionary governmental policies to stabilize the economy at full employment. Although the Keynesian policy prescriptions continued to gain acceptance in the postwar period, the zenith of our confidence in the efficacy of stabilization policy was not reached until the mid-1960s. However, just as government intervention in the economy was becoming widely accepted, the familiar sound of ceremonial exhortations against governmental intervention again began to be heard. . . this time in the area of stabilization policy.