Economic contradictions coming home to roost? Does the U.S. economy face a long-term aggregate demand generation problem?
AbstractMany argue that the current recession is the product of a temporary stock market wobble. This paper argues that the U.S. economy confronts deeper-seated problems concerning the aggregate demand generation process. For two decades, these problems have been obscured by a range of demand compensation mechanisms--rising consumer debt, a stock market boom, and rising profit rates. Now, these mechanisms are exhausted. Fiscal policy adjustments and dollar depreciation are the only stable exits from this impasse, but they must be accompanied by measures rectifying the income distribution imbalances at the root of the problem. Absent this, deficient demand will reassert itself.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Journal of Post Keynesian Economics.
Volume (Year): 25 (2002)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=109348
aggregate demand; debt; income distribution; saving rates; stock market;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Yun Kim & Mark Setterfield & Yuan Mei, 2013. "A Theory of Aggregate Consumption," Working Papers 1301, Trinity College, Department of Economics.
- Yun Kim & Mark Setterfield & Yuan Mei, 2012. "Aggregate Consumption and Debt Accumulation: An Empirical Examination of US Household Behavior," Working Papers 1204, Trinity College, Department of Economics.
- Mark Setterfield, 2010. "Endogenous Growth: A Kaldorian Approach," Working Papers 1001, Trinity College, Department of Economics.
- Mark Setterfield, 2012. "Real Sector Imbalances and the Great Recession," Working Papers 1201, Trinity College, Department of Economics.
- Thomas I. Palley, 2013.
"Gattopardo economics: the crisis and the mainstream response of change that keeps things the same,"
European Journal of Economics and Economic Policies: Intervention,
Edward Elgar, vol. 10(2), pages 193-206.
- Thomas I. Palley, 2013. "Gattopardo economics: The crisis and the mainstream response of change that keeps things the same," IMK Working Paper 112-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Greg Hannsgen, 2004.
"The Transmission Mechanism of Monetary Policy: A Critical Review,"
Economics Working Paper Archive
wp_412, Levy Economics Institute, The.
- Greg Hannsgen, 2004. "The Transmission Mechanism of Monetary Policy: A Critical Review," Macroeconomics 0411004, EconWPA.
- Till van Treeck, 2012. "Did inequality cause the U.S. financial crisis?," IMK Working Paper 91-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Giuseppe Fontana & Bill Gerrard, 2006.
"The future of Post Keynesian economics,"
BNL Quarterly Review,
Banca Nazionale del Lavoro, vol. 59(236), pages 49-80.
- Nathan Perry & Nathaniel Cline, 2013. "Wages, Exchange Rates, and the Great Inflation Moderation: A Post-Keynesian View," Economics Working Paper Archive wp_759, Levy Economics Institute, The.
- Thomas Goda, 2013. "The role of income inequality in crisis theories and in the subprime crisis," Working Papers PKWP1305, Post Keynesian Economics Study Group (PKSG).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.