PURPOSEFULNESS OF STABILIZING ECONOMIC CONDITIONS

The paper concentrates on searching an answer to the question whether correcting the market in the scope of the medium-term economic processes is purposeful and whether it has the real chances to succeed. The author pays special attention to potential benefits resulting from smoothing out a cycle and the links between a trend and a cycle. The review and the critical evaluation of the literature connected with this field leads the author to a conclusion that although theoretical views are far from being unambiguous, there exist more and more arguments against excessive activity of the state in smoothing out business cycle. Stabilization policy does not necessarily lead to the rise in the social welfare and accelerating the general dynamics of growth.