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An economic policy for the fifth long wave

Author

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  • Angelo Reati

    (Technical University of Lisbon)

  • Jan Toporowski

    (University of Amsterdam)

Abstract

The paper starts by reviewing a recent contribution on long-waves, in order to recall the essential points of a theory that, better than any other, is able to explain the long term development of capitalist economies. Considering that the present technological revolution in ICT is part of the broad phenomenon of a new long wave, it follows that the main focus of economic policy should be to support the diffusion of the new technological style and to favour the institutional changes required by such an objective. On the basis of a selective view of what is deemed crucial to foster the full implementation of the new long wave, four broad guidelines are suggested: (i) a Keynesian policy for demand; (ii) a policy to re-establish the primacy of productive capital through systematic concerted open market operations to regulate liquidity in the financial markets; (iii) a reconstruction of the employment relationship that, while taking into consideration the requirements of the new technological paradigm, preserves the essential features of the “European social model”; a targeted flexibility of labour, that contrasts with the all-out market flexibility that results from the neoclassical theory, is also suggested; (iv) a regime for intellectual property rights that avoids the drawbacks – both ethical and economic – of current US practices.

Suggested Citation

  • Angelo Reati & Jan Toporowski, 2005. "An economic policy for the fifth long wave," GE, Growth, Math methods 0510008, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpge:0510008
    Note: Type of Document - pdf; pages: 43. published in BNL Quarterly Review n. 231, December 2004
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/ge/papers/0510/0510008.pdf
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    References listed on IDEAS

    as
    1. Jan Toporowski, 2003. "The End of Finance and Financial Stabilisation," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 29(4), pages 531-541.
    2. Jan Toporowski, 2005. "Theories of Financial Disturbance," Books, Edward Elgar Publishing, number 3179.
    3. Harcourt,G. C., 1972. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9780521096720.
    4. Reati, Angelo, 1998. "A Long-Wave Pattern for Output and Employment in Pasinetti’s Model of Structural Change," MPRA Paper 1663, University Library of Munich, Germany.
    5. Francisco Louçã & Jan Reijnders (ed.), 1999. "The Foundations of Long Wave Theory," Books, Edward Elgar Publishing, volume 0, number 1516.
    6. Luigi L. Pasinetti, 2000. "Critique of the neoclassical theory of growth and distribution," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 383-431.
    7. Brouwer, Erik & Kleinknecht, Alfred, 1999. "Keynes-Plus? Effective Demand and Changes in Firm-Level R&D: An Empirical Note," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 23(3), pages 385-391, May.
    8. Jonathan Michie & Maura Sheehan, 2003. "Labour market deregulation, 'flexibility' and innovation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 27(1), pages 123-143, January.
    9. Rainer Metz, 1992. "A Re-examination of Long Waves in Aggregate Production Series," Palgrave Macmillan Books, in: Alfred Kleinknecht & Ernest Mandel & Immanuel Wallerstein (ed.), New Findings in Long-Wave Research, chapter 4, pages 80-119, Palgrave Macmillan.
    10. Richard R. Nelson, 2006. "The Market Economy and the Scientific Commons," Chapters, in: Birgitte Andersen (ed.), Intellectual Property Rights, chapter 1, Edward Elgar Publishing.
    11. Luigi L. Pasinetti, 2000. "Critique of the neoclassical theory of growth and distribution," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 383-431.
    12. Freeman, Chris, 2001. "A hard landing for the 'New Economy'? Information technology and the United States national system of innovation," Structural Change and Economic Dynamics, Elsevier, vol. 12(2), pages 115-139, July.
    13. Kleinknecht, Alfred, 1998. "Is Labour Market Flexibility Harmful to Innovation?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 22(3), pages 387-396, May.
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    Cited by:

    1. Marco Gallegati, 2019. "A system for dating long wave phases in economic development," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 803-822, July.
    2. Mark Knell & Simone Vannuccini, 2022. "Tools and concepts for understanding disruptive technological change after Schumpeter," Jena Economics Research Papers 2022-005, Friedrich-Schiller-University Jena.
    3. Alessandro Roncaglia, 2009. "Rule, instability and crisis," PSL Quarterly Review, Economia civile, vol. 62(248-251), pages 3-13.
    4. Phillip Anthony O’Hara, 2013. "Policies and Institutions for Moderating Deep Recessions, Debt Crises and Financial Instabilities," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(1), pages 19-49, March.
    5. Maciej Holko, 2017. "Oszczędności pracowników, rozwój rynku kapitału i inwestycje zagraniczne - rządowy plan rozwoju z perspektywy postkeynesowskiej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5, pages 5-30.
    6. Tomás Gutiérrez-Barbarrusa, 2019. "The interpretation of the cyclical history of capitalism. A comparison between the neo-Schumpeterian and social structure of accumulation (SSA) approaches in light of the long wave theory," Journal of Evolutionary Economics, Springer, vol. 29(4), pages 1285-1314, September.

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    More about this item

    Keywords

    long-waves;

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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