Fiscal Policy, Monetary Policy, and the Carter Presidency

The Carter years have often been characterized as a period of profound economic malaise brought on by weak and misguided leadership. Indeed, not since Herbert Hoover left office in 1933 has a president faced such pervasive allegations of economic mismanagement. However, examination of broad indicators of economic conditions demonstrates that the economy performed quite well during the Carter years. Moreover, fiscal policy during the Carter Administration was relatively stable and less volatile than fiscal policy during other postwar presidential periods and appropriate in its countercyclical thrust. In contrast, monetary policy was highly erratic compared to monetary policy during other presidential terms and represented a destabilizing influence in the late 1970s