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Egalitarian Policies and Effective Demand: Considering Balance of Payments

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  • Taro Abe

Abstract

This study examines the effectiveness of redistribution policies considering balance of payments. Unlike Bowles (2012) and Abe (2016, 2015), we assume that capital movement is sluggish to consider the short-run effects. Results indicate that conventional egalitarian policies such as increasing unemployment compensation and strengthening dismissal regulations can be effective, whereas an asset-based redistribution such as a decrease in the ratio of monitoring labor cannot be. These results contradict Bowles (2012). We need to reevaluate conventional egalitarian policies if the effects of effective demand and adjustment of capital continue in the long run.

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  • Taro Abe, 2017. "Egalitarian Policies and Effective Demand: Considering Balance of Payments," Discussion papers e-17-002, Graduate School of Economics , Kyoto University.
    • Handle: RePEc:kue:epaper:e-17-002
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    References listed on IDEAS

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    1. Samuel Bowles and Robert Boyer., 1988. "Labor Discipline and Aggregate Demand: A Macroeconomic Model," Economics Working Papers 8875, University of California at Berkeley.
    2. Engelbert Stockhammer, 2015. "Rising inequality as a cause of the present crisis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 39(3), pages 935-958.
    3. Taro Abe, 2016. "Egalitarian Policies, Effective Demand, and Globalization: Considering Budget Constraint," Discussion papers e-15-014, Graduate School of Economics , Kyoto University.
    4. Bowles,Samuel, 2012. "The New Economics of Inequality and Redistribution," Cambridge Books, Cambridge University Press, number 9781107014039, November.
    5. Taro ABE, 2015. "Egalitarianism Policy and Effective Demand under Globalization," Journal of Economics and Political Economy, KSP Journals, vol. 2(3), pages 374-382, September.
    6. repec:cdl:econwp:qt8sb2623g is not listed on IDEAS
    7. Bowles,Samuel, 2012. "The New Economics of Inequality and Redistribution," Cambridge Books, Cambridge University Press, number 9781107601604, November.
    8. Bowles, Samuel & Boyer, Robert, 1988. "Labor Discipline and Aggregate Demand: A Macroeconomic Model," American Economic Review, American Economic Association, vol. 78(2), pages 395-400, May.
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    Keywords

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    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • J80 - Labor and Demographic Economics - - Labor Standards - - - General
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

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