Incomes policies: Two approaches
AbstractPost-Keynesians in general, and Geoff Harcourt in particular, have always laid much emphasis on incomes policies, which allow policy-makers to implement expansionary demand-side policies and ensure price stability. Mainstream economics, instead, gives little, if any, relevance to incomes policies. The central bankâ€™s monetary policy is the main tool to be used to ensure price stability. In the mainstream approach, price stability is ensured by constraining the economyâ€™s level of output and employment below full employment. This can be defined as the mainstream implicit incomes policy. This article argues that policy indications different from the mainstream can be derived. This, in particular, is done by removing the typical hypothesis that, in the short period, productivity is constant and independent of variations of aggregate output. This sort of approach allows for non-inflationary demand expansionary policies, which at the same time can promote the productivity and efficiency of the economy as a whole. This line of analysis is largely influenced by the work of Geoff Harcourt.
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Bibliographic InfoArticle provided by Edward Elgar in its journal Intervention. European Journal of Economics and Economic Policies.
Volume (Year): 8 (2011)
Issue (Month): 1 ()
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Web page: http://www.elgaronline.com/ejeep
incomes policy; incomes distribution; mainstream macroeconomics; Post Keynesian macroeconomics;
Find related papers by JEL classification:
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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- F. Patriarca & C. Sardoni, 2011. "Distribution and Growth: A Dynamic Kaleckian Approach," Economics Working Paper Archive wp_697, Levy Economics Institute.
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