IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

A Post-Kaleckian, Post-Olsonian Approach to Unemployment and Income Inequality in Modern Varieties of Capitalism

Author Info

Listed author(s):
  • Arne Heise

    (Department of Politics and Economics, Hamburg University)

Abstract

The 'big trade-off', described by Arthur Okun some thirty years ago, is back again. Equality or efficiency, or to put it differently again: modern highly developed economies and societies must choose between the Scylla of income inequality or the Charybdis of unemployment. Furthermore, it seems that the continental European economies ¡ª foremost Germany and France ¡ª have sided with more egalitarian ends accepting higher unemployment. This has occurred whilst the liberal economies such as the United States and the United Kingdom choose higher inequality for lower unemployment. In this paper it is argued that the trade-off is not a supply-side necessity to maintain work effort in a situation of incomplete contracts, but is a politico-economic issue between particular interest groups to seek rents. However, unlike in Mancur Olson's seminal approach, it is not the trade unions which are forming distributional coalitions on the labour market. Rather, it is the meritocracy who are happy to use Keynesian-type demand management in order to advance their material interests by pursuing a 'Meritocratically Optimal Rate of Unemployment' (MORU).

Download Info

If 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.

File URL: http://www.aeconf.net/Articles/Nov2006/aef070209.pdf
Download Restriction: no
File URL: http://down.aefweb.net/AefArticles/aef070209.pdf
Download Restriction: no

Article provided by Society for AEF in its journal Annals of Economics and Finance.

Volume (Year): 7 (2006)
Issue (Month): 2 (November)
Pages: 357-383

as
in new window

Handle: RePEc:cuf:journl:y:2006:v:7:i:2:p:357-383
Contact details of provider: Web page: http://www.aeconf.net/

More information through EDIRC

Keywords: Unemployment; Income inequality; Political economy;

Find related papers by JEL classification:

  • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
  • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
  • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
  • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
  • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Jean-Marc Burniaux & Thai-Thanh Dang & Douglas Fore & Michael F. Förster & Marco Mira d'Ercole & Howard Oxley, 1998. "Income Distribution and Poverty in Selected OECD Countries," OECD Economics Department Working Papers 189, OECD Publishing.
  2. Persson, Torsten & Tabellini, Guido, 1991. "Is Inequality Harmful for Growth? Theory and Evidence," CEPR Discussion Papers 581, C.E.P.R. Discussion Papers.
  3. Lane Kenworthy & Jonas Pontusson, 2005. "Rising Inequality and the Politics of Redistribution in Affluent Countries," LIS Working papers 400, LIS Cross-National Data Center in Luxembourg.
  4. Jäntti, Markus & Jenkins, Stephen P., 2001. "Examining the Impact of Macro-Economic Conditions on Income Inequality," IZA Discussion Papers 364, Institute for the Study of Labor (IZA).
  5. Lester C. Thurow, 1971. "The Income Distribution as a Pure Public Good," The Quarterly Journal of Economics, Oxford University Press, vol. 85(2), pages 327-336.
  6. Delhey, Jan, 1999. "Inequality and attitudes: postcommunism, western capitalism and beyond," Discussion Papers, Research Unit: Social Structure and Social Reporting FS III 99-403, Social Science Research Center Berlin (WZB).
  7. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147, April.
  8. Michael F. Förster, 2000. "Trends and Driving Factors in Income Distribution and Poverty in the OECD Area," OECD Labour Market and Social Policy Occasional Papers 42, OECD Publishing.
  9. Zweimuller, Josef & Barth, Erling, 1994. "Bargaining Structure, Wage Determination, and Wage Dispersion in 6 OECD Countries," Kyklos, Wiley Blackwell, vol. 47(1), pages 81-93.
  10. Riese, Hajo, 1981. "Theorie der Produktion und Einkommensverteilung. (With English summary.)," Kyklos, Wiley Blackwell, vol. 34(4), pages 540-562.
  11. Heise, Arne, 2004. "Limitations to Keynesian demand management through monetary policy: whither Cartesian policy control," Working Papers on Economic Governance 14, University of Hamburg, Department of Socioeconomics.
  12. Hall, Peter A. & Soskice, David (ed.), 2001. "Varieties of Capitalism: The Institutional Foundations of Comparative Advantage," OUP Catalogue, Oxford University Press, number 9780199247752, April.
  13. Bowles, Samuel & Edwards, Richard & Roosevelt, Frank, 2005. "Understanding Capitalism: Competition, Command, and Change," OUP Catalogue, Oxford University Press, edition 3, number 9780195138658, April.
  14. repec:clr:wugarc:y:2012:v:38i:2p:357 is not listed on IDEAS
  15. Naastepad, C. W. M. & Kleinknecht, Alfred, 2004. "The Dutch productivity slowdown: the culprit at last?," Structural Change and Economic Dynamics, Elsevier, vol. 15(2), pages 137-163, June.
  16. Arestis, Philip & Sawyer, Malcolm, 1998. "Keynesian Economic Policies for the New Millennium," Economic Journal, Royal Economic Society, vol. 108(446), pages 181-195, January.
  17. Giersch,Herbert & Paqué,Karl-Heinz & Schmieding,Holger, 1994. "The Fading Miracle," Cambridge Books, Cambridge University Press, number 9780521358699, December.
  18. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer.
  19. Barth, Erling & Zweimuller, Josef, 1995. " Relative Wages under Decentralized and Corporatist Bargaining Systems," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(3), pages 369-384, September.
  20. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
  21. Georg Feigl & Markus Marterbauer & Miriam Rehm, 2012. "Einkommensverteilung und Krise," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 38(2), pages 357-367.
  22. Arne Heise, 2005. "German Social Democratic Economic Politics in the Light of Agenda Theory," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 2(2), pages 131-151.
Full references (including those not matched with items on IDEAS)

The CitEc project has not yet found citations to this item.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Access and download statistics

When requesting a correction, please mention this item's handle: RePEc:cuf:journl:y:2006:v:7:i:2:p:357-383. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Qiang Gao)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.