And the traditional-style stabilization policy became obsolete. In the 1980s it was replaced in

the UK by an explicit non-stabilizing policy in the form of the medium-term financial strategy.

Stabilization policy fell out of favour for two main reasons. First, there are immense practical

Difficulties in implementing it, primarily because of a lack of sufficient information. All that is

Known about the economy is how it was behaving several months ago, but actions have to be taken

Several months in advance. The problem has been likened to attempts at controlling the temperature

Of water coming out of a shower when any twist of the hot or cold tap takes half a minute to

Affect the temperature of that coming out of the nozzle. Secondly, it is argued that the temptation

To attempt to keep unemployment below its market level inevitably causes ever-accelerating inflation.

Instead, it is suggested, if the equilibrium level of unemployment is too high, measures affecting

The supply of labour, rather than demand, are necessary.

Despite the criticisms, stabilization to some extent exists in all economies: built-in stabilizing

Factors (built-in stabilizers) (for example, in recession, unemployment benefits paid out rise, causing

An increase in government spending) will never be removed. Moreover, most economists allow