Monetarism and the Crisis in Economics

To the economists responsible for advice and policy decisions in the 196o's, the main problems of stabilization policy seemed to have been solved. Mild recessions might have occurred because businessmen behaved erratically, or because the timing of the response to government policy actions had not been pinned down, or because politicians did not heed their economic advisers. Mild inflation might result from decisions to reduce unemployment and increase output beyond the point required by price stability. Inflation seemed manageable to the economic advisers of that period, and inflation and unemployment still seemed manageable when they wrote their memoirs.