Tobin disputed that most of the developed democratic and capitalist states adopted Keynesian demand policies 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