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PSST: Patterns of Sustainable Specialization and Trade

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  • Kling Arnold

Abstract

This essay offers an alternative way to look at macroeconomics. The current standard approach uses aggregate supply and aggregate demand (AS-AD). I call the alternative approach "patterns of sustainable specialization and trade" (PSST). The PSST approach combines many old and new strands in economics. It suggests that the economy is a highly complex system that is constantly adapting to new circumstances, especially opportunities created by technological innovation. We can view employment fluctuations as a reflection of the difficulty that markets sometimes have in making the necessary adjustments, so that for a period of time some workers have extremely low marginal revenue product and as a result become unemployed.

Suggested Citation

  • Kling Arnold, 2011. "PSST: Patterns of Sustainable Specialization and Trade," Capitalism and Society, De Gruyter, vol. 6(2), pages 1-20, December.
    • Handle: RePEc:bpj:capsoc:v:6:y:2011:i:2:n:2
    DOI: 10.2202/1932-0213.1086
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    References listed on IDEAS

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    4. Hui Guo, 2007. "Stock market dispersion and unemployment," National Economic Trends, Federal Reserve Bank of St. Louis, issue Feb.
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