Countercyclical Regulatory Policy Gains Momentum

The Economist has a nice piece about countercyclical regulatory policy here. The piece ends with:

Just as fiscal and monetary policy vary according to the economic cycle, so perhaps should regulatory policy: lighter when unemployment is high, heavier when it is low. The economics of incorporating employment considerations into regulatory policy is in its infancy. Mr Sunstein calls it a “frontiers question”. Given the sorry state of America’s job market, it is worth answering.


  1. While a nice idea, it runs counter to reality. When the economy is expanding the pressure will be keep it expanding and prevent any interference in it, and when the economy is shrinking the pressure will be to examine its shortcomings. It is just another version of the bezel. We probably shouldn’t even consider the effects of regulation on the economy but the effects of the economy on regulation. In any event, times of regress are much shorter than times of progress so any effect would be very limited.

  2. Given the tremendous amount of cash held by major corporations, they can afford the manpower to conform to regulations, and the job of regulator is as legitimate as any other. I just want to point out that there are arguments on both sides of the question of regulation’s relationship to job creation.


  1. […] Mandel, chief economic strategist from the…ugh…dare I say it, Progressive Policy Institute, has proposed a rather intriguing idea that might just warm the cockles of little conservative hearts. Something he calls countercyclical […]

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