Question

How did macroeconomic policies contribute to the Golden Age (and describe the main characteristics of the Golden Age)?

Answer 1

Dear Student,

The post–World War II economic expansion, also known as the golden age of capitalism

1) Productivity

High productivity growth started after world war II.Manufacturing was aided by automation technologies such as feedback controllers. Wholesale and retail trade benefited from new highway systems, distribution warehouses, and material handling equipment such as forklifts and intermodal containers.Oil displaced coal in many applications, particularly in locomotives and ships.[12] In agriculture, the post WW II period saw the widespread introduction of the following:

• Chemical fertilizers
• Tractors
• Combine harvesters
• High-yielding variety
• Pesticides

2) New products and services

Industries that were created or expanded during the post war period included television, commercial aviation and particularly in the US, computer technology.

3) Infrastructure spendig

One of Eisenhower's enduring achievements was championing and signing the bill that authorized the Interstate Highway System

4) Military spending

nother explanation for this period is the theory of the permanent war economy, which suggests that the large spending on the military helped stabilize the global economy

5) Wealth redistribution

Top tax rates increased dramatically, in some cases tenfold. This had a significant effect on both income and wealth distributions. Such policies were commonly referred to as the "conscription of income" and "conscription of wealth"

6) Low oil prices

In the 1940s, the price of oil was about $17, rising to just over $20 during the Korean War (1951–1953). During the Vietnam War (1950s–1970s) the price of oil slowly declined to under $20. During the Arab oil embargo of 1973-the first oil shock—the price of oil rapidly rose to double in price

Main characteristics of the Golden Age

1. The replacement of a "cyclical model" of the economy by a "growth model,"
2. The setting of quantitative targets for the economy,
3. Use of the theories of fiscal drag and full-employment budget,
4. Recognition of the need for greater flexibility in taxation, and
5. Replacement of the notion of unemployment as a structural problem by a realization of low aggregate demand.

If you like the answer, Kindly subscribe and up vote

Thank You !!