In this paper, we argue that much of the debate regarding the role of government policy in mitigating economic instability has failed to give sufficient attention to the role of capital markets. We argue that in an economy with well-functioning markets for risk-bearing, direct public...

The neoclassical theory of the firm has developed along two distinct lines. The static theory develops the implications of profit maximization for the determination of factor demands, output, and equilibrium firm size. The dynamic theory uses intertemporal optimization to analyze the investment...

This paper argues that a key difference between the monetarists and the neo-Keynesians is their respective views about how monetary policy works. Both views are shown to be special cases of the integrated model developed. The model is presented in such a form that it is a relatively...

This paper reports on discussions at the Workshop on Macroeconomic Policy Effectiveness held at the OECD in Paris in June 1981.