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Towards a New Social Structure of Accumulation: The Case of a Small Euro-Area Flexicurity Economy

Author

Listed:
  • Peter Flaschel
  • Alfred Greiner
  • Sigrid Luchtenberg

Abstract

The paper formulates for a small open economy a macrodynamic framework with an employer of ‘first’ resort, added to a competitive economic reproduction process. There is high labor mobility, with fluctuations of employment made socially acceptable through a second labor market where all remaining workers get occupation and income. We show that this economy exhibits an attracting balanced growth path, which is also viable. Moreover, pension-fund financed investment can be added to this model without disturbing this situation. We also investigate the existence of skill differentials and a corresponding educational system, which includes the equal opportunity principle.

Suggested Citation

  • Peter Flaschel & Alfred Greiner & Sigrid Luchtenberg, 2009. "Towards a New Social Structure of Accumulation: The Case of a Small Euro-Area Flexicurity Economy," Bulletin of Political Economy, Bulletin of Political Economy, vol. 3(2), pages 107-149, December.
  • Handle: RePEc:awu:journl:v:3:y:2009:i:2:p:107-149
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