Date of Original Version

9-16-1981

Type

Response or Comment

Abstract or Description

Economic policies do not work instantly. Reductions in the growth of government spending that shift resources to more efficient rises do not immediately trigger equal or greater increases in private spending. Tax cuts that encourage saving and effort do not generate instant responses. Reductions of money growth do not instantly reduce inflation. All of these policies have their expected effects only if people believe the policies will remain in effect.

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