what is stabilization policy?

Question

please elaborate and kindly give biliography , websites, etc that i can browse in the internet. thanks

Answer 1

this is probably most usefull

http://en.wikipedia.org/wiki/Stabilisation_policy

Answer 2

Stabilization policies are used to regulate the fluctuations of a business cycle. Regardless of what phase the cycle is in, stabilization policies are generally recommended in order to avoid dangerous shifts that could lead to any number of problems.

Answer 3

If you think of economic growth as a time series, you can compute the long-term average and the standard deviation of economic growth. Policies (usually, long-term) designed to increase the average are called growth policies; policies (usually, short-to-medium-term) intended to decrease the standard deviation are called stabilization policies.

Stabilization policies come in two flavors: counter-cyclical policies and crisis management policies. Counter-cyclical policies usually involve monetary tightening in periods of high growth and monetary easing during recessions. Crisis management policies often include monetary easing as well, but they can also be complemented by fiscal expansion (financing government expenditures with borrowing rather than taxing).