Toward a New Economics: Essays in Post-Keynesian and Institutionalist Theory

By Alfred S. Eichner | Go to book overview

ble downward, the growth of output per worker cannot be translated into higher real income for the household sector through a secular decline in the price level. The same result must instead be achieved through a secular rise in money wages and the other forms of income received by the household sector--and in this way satisfy the aggregate demand condition for maintaining the corporate economy's secular growth rate. This is why trade unions or some other type of mechanism that functions to push up money wages and the other forms of household income is essential for the longer term, as distinct from the cyclical, stability of the corporate economy.

Moreover, not even the stabilizing influence of the megacorp's high secular growth of investment, along with the similarly stabilizing influence of the high secular growth of durable goods purchases by the household sector, can be counted on unless the government is prepared to act quickly and decisively to reverse, through Keynesian countercy+00AD clical policies, any downturn in the level of economic activity. Otherwise, the state of long-run expectations will not be such as to encourage both megacorps and households to take a longer run view insofar as durable goods purchases, or discretionary expenditures, are concerned. At the very least, the government must not take any actions-- such as curtailing its own discretionary expenditures and/or raising tax rates when a cyclical downturn occurs (or, alternatively, stepping up its discretionary expenditures and/or lowering tax rates when the economy is already expanding at a more rapid rate than the growth of output per worker will permit)--that will exacerbate the situation and thereby overwhelm the corporate economy's built-in stabilizers. The problem is that the very features of the corporate economy that insure that aggregate output and employment will fluctuate only within certain limits are also the features that make the corporate economy so susceptible to an inflationary spiral as megacorps, trade unions, and the government exercise the power they have over prices, wages, and tax rates. This, however, is a point that will be more fully developed in the subsequent essays.


Afterword

This is a revised and expanded version of the article that appeared in Managerial and Decision Economics, November, 1983, under the same title. It carries forward the analysis of oligopolistic pricing first presented in "The Determination of the Mark-up under Oligopoly"

-73-

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Toward a New Economics: Essays in Post-Keynesian and Institutionalist Theory
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Preface viii
  • 1 - Introduction 3
  • 2 - The Megacorp as a Social Innovation 10
  • Afterword 27
  • 3 - Micro Foundations of the Corporate Economy 28
  • Afterword 73
  • 4 - An Anthropogenic Approach to Labor Economics 75
  • Afterword 96
  • 5 - The Demand Curve for Money Further Considered (Written With, and Based on the Econometric Work of, Leonard Forman and Miles Groves) 98
  • Afterword 109
  • 6 - Stagflation: Explaining the Inexplicable 113
  • Addendum 145
  • Afterword 148
  • Notes to the Addendum 149
  • 7 - The New Paradigm and Macrodynamic Modeling 151
  • Introduction 151
  • Conclusions 173
  • 8 - Post-Keynesian Theory and Empirical Research 176
  • Afterword 199
  • 9 - Reflections on Social Democracy 200
  • Afterword 218
  • References 219
  • Index 231
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