An evaluation of the economic policy proposals of the joint economic committee of the 92nd and 93rd congresses: A comment

Abstract

Since 1 have had major responsibility for drafting and/or editing the domestic macroeconomic policy sections of all the Joint Economic Committee reports Christ has surveyed, I have naturally read his critique with great interest. I would like to join my colleagues on the Joint Economic Committee staff in commending him for undertaking this comprehensive review. I am pleased that Christ concludes by giving the Committee passing marks and wants to see it continue as an institution. However, on the way to reaching this reassuring conclusion, Christ makes clear his fundamental disagreement with the Committee’s approach to macroeconomic policy. Neither 1 nor any person on the Committee staff nor any individual member of the Committee agrees with every position taken by the Committee in the past five years. Nor do any of us, I hope, hold exactly the same views on every question that we did five years ago. Nonetheless, there is a consistent underlying point of view which runs through the Committee’s recent statements on macroeconomic policy. It is a viewpoint which 1, together with many other economists, share, although Christ, again together with many other economists, does not. This brief comment cannot begin to fully explore this difference of viewpoint, much less to determine who is right and who is wrong. I think it would be helpful, however, simply to lay out the issues. To do so may at least reassure Christ, and others, of the Committee staff’s awareness that they are issues, with persuasive arguments to be made on both sides of the case. First, the Committee’s reports clearly imply an underlying conviction that discretionary fiscal and monetary policy= contribute to improved macroeconomic performance. The Employment Act of 1946, which established the Committee, was predicated on this assumption. The Committee would be in an awkward position indeed if it felt its basic mandate was either impossible to achieve or counter-productive to attempt. (Incidentally, the Committee gives its major attention to the pursuit of high employment with reasonable price