XIV. Full Employment and Economic Welfare

1947 ◽  
pp. 181-194
Keyword(s):  
Full Employment ◽  
Economic Welfare

scholarly journals Public Policy Induced Changes in Employment: Valuation Issues for Benefit-Cost Analysis

2015 ◽  
Vol 6 (1) ◽  
pp. 112-153 ◽  
Author(s):  
Robert H. Haveman ◽  
David L. Weimer
Keyword(s):  
Cost Analysis ◽  
Opportunity Cost ◽  
Full Employment ◽  
Aggregate Demand ◽  
Welfare Effects ◽  
Economic Welfare ◽  
Involuntary Unemployment ◽  
Benefit Cost Analysis ◽  
Benefit Cost ◽  
Induced Changes

We explore the economic welfare effects of direct and indirect government-induced changes in employment under varying market conditions. We begin with a discussion of those policy-induced employment changes that seamlessly reshuffle workers among jobs in an efficient (i.e., full-employment, full-information) economy; generally such changes create few, if any, net changes in economic welfare not captured in changes in wage bills. We then turn to the effects of policy-induced employment changes in economies with two market distortions: (1) inflexible wages set by law or custom that result in involuntary unemployment during periods of deficient aggregate demand, and (2) illiquidity resulting from imperfect capital markets that prevent people from borrowing against future earnings. Induced employment changes in these circumstances impose real net social costs or generate real net social benefits beyond changes in the wage bill. We also assess the likely magnitude of the social opportunity cost of labor in the case of involuntary unemployment and imperfect liquidity, and address how the welfare effects of such employment changes should be valued. Based on currently available empirical research, we develop estimates of the opportunity costs of hiring or releasing an employee during periods of high unemployment with and without other market distortions. In contrast to conventional benefit-cost analysis practice, which treats releasing workers as having a negative opportunity cost, we estimate an opportunity cost for firing that is positive and equal to about 73% of pre-firing compensation, primarily because of the “scarring effect” of unemployment. Also in contrast to conventional practice, we estimate an opportunity cost for hiring an unemployed worker that is less than the worker’s opportunity cost of time.

Is money the creation of the state or the market? (On the “modern monetary theory” as described in the textbook by W. Mitchell, L. R. Wray and M. Watts “Macroeconomics”)

2020 ◽  
pp. 121-134
Author(s):  
S. A. Andryushin
Keyword(s):  
Public Debt ◽  
Scientific Community ◽  
Full Employment ◽  
Term Effect ◽  
Scientific Concept ◽  
Monetary Theory ◽  
Left Wing ◽  
Medium Term ◽  
Short Term ◽  
Stimulation Of

In 2019, a textbook “Macroeconomics” was published in London, on the pages of which the authors presented a new monetary doctrine — Modern Monetary Theory, MMT, — an unorthodox concept based on the postulates of Post-Keynesianism, New Institutionalism, and the theory of Marxism. The attitude to this scientific concept in the scientific community is ambiguous. A smaller part of scientists actively support this doctrine, which is directly related to state monetary and fiscal stimulation of full employment, public debt servicing and economic growth. Others, the majority of economists, on the contrary, strongly criticize MMT, arguing that the new theory hides simple left-wing populism, designed for a temporary and short-term effect. This article considers the origins and the main provisions of MMT, its discussions with the mainstream, criticism of the basic tenets of MMT, and also assesses possible prospects for the development of MMT in the medium term.

Problems of the US Economic Policy

2013 ◽  
pp. 129-143
Author(s):  
V. Klinov
Keyword(s):  
Economic Policy ◽  
Real Estate ◽  
Full Employment ◽  
Tax Rates ◽  
Equitable Distribution ◽  
Investment Rate ◽  
The Us ◽  
Budget Systems ◽  
Enterprise Activity ◽  
The U.S

How to provide for full employment and equitable distribution of incomes and wealth are the keenest issues of the U.S. society. The Democratic and the Republican Parties have elaborated opposing views on economic policy, though both parties are certain that the problems may be resolved through the reform of the federal tax and budget systems. Globalization demands to increase incentives for labor and enterprise activity and for savings to secure proper investment rate. Tax rates for labor and enterprise incomes are to be low, but tax rates for consumption, real estate and land should be progressive.

Unemployment

2017 ◽  
Author(s):  
Jim Tomlinson
Keyword(s):  
Full Employment ◽  
Economic Life ◽  
Employment Policy ◽  
Conservative Government

This chapter examines the underpinnings of full employment policy, and the popular understandings of economic life that went along with it. It examines how and why the defeat of unemployment achieved such importance, and how the policy was understood and represented from the 1940s onwards. Next it looks at the tensions surrounding this policy aim from the 1970s, and how it unravelled in the 1980s. The downgrading of the significance given to full employment was accomplished by a variety of strategies to reshape understanding, from the questioning of the ‘reality’ behind official enumeration of unemployment in the early 1970s through to the revival of ‘scrounger’ narratives. It looks at how the Conservative government after 1979 reacted to the surge in unemployment, and how they tried to establish a new popular understanding of the causes of job losses.

The IMF and the Politics of Austerity in the Wake of the Global Financial Crisis

2018 ◽  
Author(s):  
Ben Clift
Keyword(s):  
Global Financial Crisis ◽  
Full Employment ◽  
Real Economy ◽  
Economic Stability ◽  
Public Power ◽  
The Great Recession ◽  
Regulatory Interventions ◽  
The Stability ◽  
The Global Financial Crisis ◽  
The Imf

The IMF uses crisis-defining economic ideas, and crisis legacy-defining ideas, to construct interpretations of economic crises in ways which prioritize particular policy or institutional responses, and rule out or marginalize others. The post-crash IMF enjoyed scope to shift the boundaries of ‘legitimate’ policy, involving heightened appreciation of ‘non-linear’ threats from losses of confidence, prolonged weak demand, and financial system fragilities and contagion. The policy corollaries of this Fund rethink were that economic stability has to be actively pursued through a wider range of policy and regulatory interventions by governments, central banks, the IMF, and other forms of authority and public power. In the context of the Great Recession, the Fund no longer considered it safe to assume an inherent tendency on the part of unfettered market forces in finance and the real economy to deliver the stability and full employment at the heart of its mandate.

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