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The Job Guarantee: MMT's Proposal for Full Employment and Price Stability

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  • Pavlina R. Tcherneva

Abstract

Orthodox economic theory presents the policy maker with an impossible choice: eradicate unemployment at the cost of undesirable inflation or keep prices stable by maintaining some level of involuntary unemployment. This is the canon, as embodied in the natural rate of unemployment theory and the Non-Accelerating Inflation Rate of Unemployment (NAIRU). In the mainstream, there is no alternative. Heterodoxy has long criticized the NAIRU and the natural rate, but has not mounted a robust challenge for lack of a clearly articulated policy alternative that can target both goals: full employment and price stability. Modern Money Theory (MMT) has such a proposal--the federal Job Guarantee. Originally issued as EDI Working Paper No. 02, 2022.

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  • Pavlina R. Tcherneva, 2024. "The Job Guarantee: MMT's Proposal for Full Employment and Price Stability," Economics Working Paper Archive wp_1060, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_1060
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    1. William F. Mitchell, 1998. "The Buffer Stock Employment Model and the NAIRU: The Path to Full Employment," Journal of Economic Issues, Taylor & Francis Journals, vol. 32(2), pages 547-555, June.
    2. Mathew Forstater, 1998. "Flexible Full Employment: Structural Implications of Discretionary Public Sector Employment," Journal of Economic Issues, Taylor & Francis Journals, vol. 32(2), pages 557-563, June.
    3. Pavlina R. Tcherneva, 2019. "The Federal Job Guarantee: Prevention, Not Just a Cure," Challenge, Taylor & Francis Journals, vol. 62(4), pages 253-272, July.
    4. Pavlina Tcherneva, 2011. "The Case for Labor Demand Targeting," Journal of Economic Issues, Taylor & Francis Journals, vol. 45(2), pages 401-410.
    5. Mosler, Warren & Silipo, Damiano B., 2017. "Maximizing price stability in a monetary economy," Journal of Policy Modeling, Elsevier, vol. 39(2), pages 272-289.
    6. William S. Vickrey, 2004. "Full Employment and Price Stability," Books, Edward Elgar Publishing, number 3110 edited by Mathew Forstater & Pavlina R. Tcherneva, March.
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