licies managed after the World War II. 1950-1975 echoed unrivaled prosperity proven by an increase in the global trade and stability (TOBIN, J. 1983). It was around that time that most economies observed low inflation and unemployment rates. It is obvious that UK and western economies experienced maximum employment in the post-war era, because governments kept their dedications when it comes to full employment, basing on Keynesianism methods (pethoukokis, 2011). Before the 1980s, there was conventional knowledge suggesting stabilization of the real output in America’s economy because of the integrated and discretionary stabilization approaches putting in place after 1946, and specifically after 1961, just before the Second World War. This is an example of a vastly held empirical overview concerning the USA’s economy (pethoukokis, 2011).
On the other side, this oversimplification that the period after 1945 was firmer that the period before the Great Depression was disputed by Romer (Romer, C.1992).
According to him, the business sequence throughout the pre-Great Depression was somehow more harsh than economic uncertainty witnessed after 1945. For C. Romer, a close assessment of unemployment, industrial manufacture and Gross National Product (GNP) data showed that procedures used in conveying these data described systematic preferences in findings. Romer used reliable post-1945 and pre-1945 figures to prove that both booms and slumps were very severe during the time after 1945 (Romer, C.1992). The deduction made by Romer was that there was slight indication to conclude that the US economy before 1929 was more unstable than after 1945. Despite a little failure and volatility of real macroeconomic indicators, and the harshness of slumps between the pre-1916 and post 1945 periods, there is enough indication to assume that slumps reduced and became constant.
The influence of the Keynesian stabilization policies included stretching the post-1945 growths and averting extreme economic recessions (Romer,C 1992). It is apparent that the increased impact and spread of Keynesianism can be credited to a conservative opinion that economic stability during the post-war era was quite higher than in the pre-1914 era, which was depicted by the Keynesian revolution in economic strategies. The point is that the rise of Keynesianism is credited to incomparable economic success during the period between the end of the second World War and 1973 industrial market economies. This was because Keynesianism emphasized the significance of fiscal policy, which caused in the perfected economic execution during the “Golden Age” epoch (Atesoglu, H.1999).