PSST: Patterns of Sustainable Specialization and Trade
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.
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Volume (Year): 6 (2011)
Issue (Month): 2 (December)
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References listed on IDEAS
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"Aggregate Demand Management in Search Equilibrium,"
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