from buoyantecoomies.com
by Leigh Harkness
1. Introduction
The attainment of full employment and price stability are not conflicting objectives, they are
complementary. If we are to raise employment, we must raise the demand for, and supply of,
products. Inflation reduces the real value of money, thereby reducing both demand and
supply in the economy.
This paper explains how an economy can raise real demand and supply to bring about full
employment while maintaining price stability. Full employment and price stability cannot be
forced onto countries. They must want it and implement the appropriate policies, in their
own time. The approach presented here can be implemented unilaterally by any country
when they want it. It does not need an international organisation to police it. If it wer
adopted globally, it could achieve full employment and price stability in the global economy.
2. The Problem
2.1 Unemployment
But before we can solve unemployment and inflation, we must explain what is causing these
problems. Figure 1 shows the number of unemployed persons in the USA since 1948. It
clearly reveals that since 1973, when the US floated its exchange rate, unemployment has
increased and stayed high.
Figure 1.
Unemployment USA
No comments:
Post a Comment