The Record of Economic Growth, Business Cycles, and Economic Policies in American Economic History

This chapter documents and analyzes the American historical economic record of growth and business cycles within the context of long-run and short-run economic policy changes. The United States is unique among all of the developed countries in terms of having a sustained and fairly stable record of economic growth. Given the large changes in various policies that have occurred over time, this record suggests that policy shifts have had almost no impact on the growth rate over the very long run. However, policy changes have had a significant impact on economic activity over shorter horizons, including the Great Depression and World War II. This chapter also argues that microeconomic policies, such as regulatory policies, tax policies, and labor policies, have had as much of an impact on aggregate economic activity as macroeconomic policies, such as monetary policy and government spending and transfer policies