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An economic policy for the fifth long wave

Author

Listed:
  • 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. 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.
    2. Nelson, Richard R., 2004. "The market economy, and the scientific commons," Research Policy, Elsevier, vol. 33(3), pages 455-471, April.
    3. Harcourt,G. C., 1972. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9780521096720, October.
    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. Brouwer, Erik & Kleinknecht, Alfred, 1999. "Keynes-Plus? Effective Demand and Changes in Firm-Level R&D: An Empirical Note," Cambridge Journal of Economics, Oxford University Press, vol. 23(3), pages 385-391, May.
    6. Jonathan Michie & Maura Sheehan, 2003. "Labour market deregulation, 'flexibility' and innovation," Cambridge Journal of Economics, Oxford University Press, vol. 27(1), pages 123-143, January.
    7. 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.
    8. Kleinknecht, Alfred, 1998. "Is Labour Market Flexibility Harmful to Innovation?," Cambridge Journal of Economics, Oxford University Press, vol. 22(3), pages 387-396, May.
    9. Goodhart, Charles, 2001. "What Weight Should Be Given to Asset Prices in the Measurement of Inflation?," Economic Journal, Royal Economic Society, vol. 111(472), pages 335-356, June.
    10. Brouwer, Erik & Kleinknecht, Alfred, 1999. "Keynes-Plus? Effective Demand and Changes in Firm-Level R&D: An Empirical Note," Cambridge Journal of Economics, Oxford University Press, vol. 23(3), pages 385-391, May.
    11. C. Goodhart, 2001. "What Weight Should be Given to Asset Prices in the Measurementof Inflation?," DNB Staff Reports (discontinued) 65, Netherlands Central Bank.
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    Cited by:

    1. Alessandro Roncaglia, 2009. "Rule, instability and crisis," PSL Quarterly Review, Economia civile, vol. 62(248-251), pages 3-13.
    2. 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.
    3. repec:sgh:gosnar:y:2017:i:5:p:5-30 is not listed on IDEAS

    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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