Business, College of


Date of this Version

March 1988


Published in Journal of Economic Issues 22:1 (March 1988), pp. 291–293. Copyright © 1988 Association for Evolutionary Economics. Used by permission.


The emergence of active countercyclical stabilization policies in the 1960s presented politicians with the problem of formulating economically desirable policies that were politically feasible as well. Economists have traditionally concerned themselves with the technical aspects of stabilization policy, leaving the analysis of actual policy formation to political scientists. James Anderson and Jared Hazelton, in Managing Macroeconomic Policy: The Johnson Presidency, present us with an analysis of macroeconomic policy in the Johnson presidency that bridges this gap by attempting to determine how the "intermixture of economic and political considerations shaped and limited the actions of those involved in the development and administration of macroeconomic policy" (p. 42).

In so doing, Anderson and Hazelton provide us with an interesting account of the evolution of major policy decisions in the areas of fiscal and monetary policy, incomes policy, and foreign economic policy. They remind us that policy recommendations are the result of a collective, developmental process and reflect not only the ideological preferences of the president, but also the political realities constraining economic policy. They alert us to the difficulties of coordinating monetary and fiscal policies in an institutional environment where the Federal Reserve has at least a certain degree of independence. They go beyond the analysis of traditional stabilization policy to demonstrate how the Johnson administration utilized other "non-traditional tools" to attain desired economic targets. Furthermore, they demonstrate how policy actions may be important, not so much for their immediate economic impact, but as symbolic acts that serve to direct our attention to various economic problems. In short, their analysis contributes much to our understanding of the actual macroeconomic policymaking process.

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