Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Economics, Finance, & Analytics
  • Economic Analysis & Monetary Policy

Humphrey Hawkins Act - Explained

What is the Humphrey Hawkins Act?

Written by Jason Gordon

Updated at April 24th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is the Humphrey-Hawkins Act?What was the purpose of the Humphrey-Hawkins ActAcademic Research on Humphrey-Hawkins Act

What is the Humphrey-Hawkins Act?

The Humphrey-Hawkins Full Employment Act, more formally known as The Full Employment and Balanced Growth Act, was passed in 1978 to amend the Employment Act of 1946. The purpose of the act was to give clarifying instructions on the use of government spending, job creation, and controlled monetary policy to create economic demand in the system and smooth out economic peaks and falls inherent in the private market.

Back to:ECONOMIC ANALYSIS & MONETARY POLICY

What was the purpose of the Humphrey-Hawkins Act

The Humphrey Hawkins Act was passed to provide instructions to the government on using spending, job creation, and monetary policy to avoid economic downturns, such as the one suffered during the Great Depression. The idea was that the Government could boost of economic demand by selective spending in cooperation with private industry. The Acts objectives rest in Keynesian theory. Keynes asserted the Governments can augment demand and can minimize shocks in the financial system through selective spending. The Humphrey Hawkins Act called provided the Government with authority to reduce employment by creating temporary government jobs. It also, expanded Congresss ability to control aspects of monetary policy - which is traditionally reserved to the Federal Reserve Board. The Act Laid out 4 goals:

  • Full Employment
  • Growth in Production
  • Price Stability
  • Balance of Trade and Budget

The Act further adds that, in achieving these goals, the Government should:

  • Allow private enterprise to lead the way in achieving these goals;
  • Attempt to balance the budget;
  • Attempt to have balanced trade;
  • Mandate the Federal Reserve Board of Governors to purse monetary policy that produces long-run growth, minimizes inflation, and promotes stability.
  • Mandate the Federal Reserve Board of Governors provide a Report on Monetary Policy to Congress two times per year;
  • Mandate the President set numerous goals for the economy and policies to achieve them within the Presidents Economic Report each year.
  • Mandate the Chairman of the Federal Reserve to align monetary policy with the economic policies put out by the President.

The Government was authorized to create a pool for public employment in the low-income, low-skill areas sufficient to raise economic demand.

  • Interestingly, the Act put in place economic targets that were to be achieved by specific years. The Act allowed Congress to revisit and amend those goals. In reality, very few or none of those goals were achieved within the stated time period.

Related Topics

  • Feedback Rule Policy
  • American Customer Satisfaction Index
  • CNN Effect
  • Bureau of Economic Analysis
  • Business Starts Index
  • American Recover and Reinvestment Act
  • Abenomics
  • Emergency Economic Stabilization Act of 2008
  • Commodity Credit Corporation
  • Humphrey Hawkins Act



humphrey-hawkins act

Was this article helpful?

Yes
No

Related Articles

  • Real Effective Exchange Rate (REER) - Explained
  • Real Economic Growth Rate - Explained
  • Surplus Spending Unit - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand