Employment and Economic Performance: Jobs, Inflation, and Growth

Employment and Economic Performance: Jobs, Inflation, and Growth

Employment and Economic Performance: Jobs, Inflation, and Growth

Employment and Economic Performance: Jobs, Inflation, and Growth

Synopsis

With the end of the post-war boom in the early 1970s, the world economy has experienced large scale unemployment. From an assumption that the unemployment problem had been solved, and that full employment could be maintained through demand management techniques, we now live in an entirely different world. Any suggestion of a return to full employment is met with questions of whether such a thing is possible, whether it would not lead to inflation or to excessive trade union power, or in the case of individual economies to unsustainable balance of payment deficits. The contributors to this volume ask whether full employment policies would be affordable. Would they lead to yawning fiscal deficits which would in the end require a U-turn in policy with unemployment reappearing? This well-informed and original contribution to current policy debate faces up to these questions and considers what would be involved in a move to much lower levels of unemployment.

Excerpt

With the end of the long post-war boom in the early 1970s, the world economy has experienced varying degrees of relatively large-scale unemployment. From an assumption that the 'unemployment problem' had been solved, and that a state of full employment could be maintained through demand management techniques, we now live in an entirely different world. Any suggestion of a return to full employment is immediately met with questions of whether such a thing is really possible, whether it would not lead to inflation or to excessive trade union power, or in the case of individual economies, to unsustainable balance of payment deficits. It is asked whether the economic policies required for a return to full employment would be affordable, or would they not inevitably lead to yawning fiscal deficits, which in turn would in the end require a U-turn in policy with unemployment reappearing.

The problems of large-scale unemployment in Europe, of the lack of the sort of international institutions which helped underpin the post-war era of full employment, and of the current lack of sufficient economic capacity to allow economies to operate at much higher levels of employment than they already are, have been analysed in our three previous books (Unemployment in Europe, Academic Press, 1994; Managing the Global Economy, Oxford University Press, 1995; and Creating Industrial Capacity: Towards full employment, Oxford University Press, 1996). The present volume considers in detail what would be involved in a move to much lower levels of unemployment.

GLOBAL LESSONS AND PROSPECTS

The approach of the book is necessarily international as the issues being analysed are international in character and of global significance. Some of the individual chapters are explicitly international, such as Ajit Singh's analysis of the North-South divide and how the pressures of a fully employed economy manifest themselves in a global context as well as within individual countries. However, an early decision was taken in planning the book not to attempt a tour of the world, with one chapter on Britain, one on Germany and so on; rather the authors reflect on the global evidence and lessons.

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