Can regulation be used as a macroeconomic policy tool? That is, when agencies regulate, should they consider the effects of their regulations on the labor market and the economy as a whole? We take up this question in a new paper titled Should Regulation Be Countercyclical?, written for an upcoming conference on Law & Macroeconomics. There is historical precedent for thinking of regulation in macroeconomic terms. In 2011, the Obama administration withdrew a proposed Environmental Protection Agency rule which would have strengthened the National Ambient Air Quality Standards for ozone. The White House explained that, while it supported stronger environmental regulations, it was unwise to push ahead with them during a weak economic recovery because of their possible adverse effects on job growth. It promised to revisit the issue in 2013, and in 2015 the Obama administration finally issued a stricter ozone rule, in a healthier macroeconomic environment.

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