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Create an institution to resolve the deficiency in aggregate demand that currently exists in the economy

Created by M.F. on September 19, 2012

The great recession came about because of a shortfall in Aggregate Demand. The slow recovery is a result of this same deficiency in demand. At present there exists only one means of directly increasing or decreasing Aggregate Demand and that means is through the use of government policy. But when it comes to Aggregate Supply our nation has developed two ways of exerting direct influence. The first is through government policy and the second is through the FEDs control over interest rates. We need another method of influencing Aggregate Demand that is not dependent on having the government take action. It should be an institution that is similar to the FED but different in that its powers would be focused on directly increasing or decreasing Aggregate Demand as needed by the economy.

Economy & Jobs
Government & Regulatory Reform
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