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How Full is Full Employment?How Tools and Not Theory Explained Full Employment

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  • Peter Rodenburg

Abstract

The post-war debate on full employment policy was blurred and unclear since the concept of full employment itself was theoretically unclear and un-operational. Unable to theoretically determine the unemployment level of full employment, economists tried to find more empirically based ways to determine the level of full employment. This paper argues that economists turned the UV curve (or Beveridge curve) and Phillips curve into practical, empirical tools of investigation and measurement for full employment. In this role economists could establish quantitative facts of unemployment that were not derivable from theory alone and so fulfilled the role of a measuring instrument in economics. Consequently, they not only enhanced theory but gave specific, quantitative and empirically based interpretations of full employment that economic theory couldn?t deliver. This paper shows how the UV and Phillips curves became tools for disentangling complex and theoretically underdetermined phenomena and measurement devices for the performance of the labour market.

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  • Peter Rodenburg, 2016. "How Full is Full Employment?How Tools and Not Theory Explained Full Employment," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2016(2), pages 5-25.
    • Handle: RePEc:fan:spespe:v:html10.3280/spe2016-002001
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    References listed on IDEAS

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    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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