Selective Use of Discretionary Public Employment and Economic Flexibility
Full employment is normally associated with structuralrigidities that may result in production bottlenecks and inflationary pressures. Flexibility or elasticity of the production system istherefore a desirable feature of an economic system. Many standardmodels, however, exhibit flexibility because of the use of unacceptablyunrealistic assumptions. While unemployment and excess capacity areimportant real- life factors that endow economic systems with flexibility, the flexibility gained in this manner comes at a high social and economiccost. This paper explores these issues and proposes the selective use ofdiscretionary public employment as a means of promoting higher levels ofemployment--and even full employment--without creating structuralrigidities, resulting in negative enivronmental consequences, or causing undesirable geographic dislocation of workers.
|Date of creation:||10 Feb 1998|
|Date of revision:|
|Note:||Type of Document - Acrobat PDF; prepared on IBM PC ; to print on PostScript; pages: 28; figures: included|
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- Imad A. Moosa, 1997. "On the Costs of Inflation and Unemployment," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 19(4), pages 651-666, July.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- L. Randall Wray, 1998.
"Government as Employer of Last Resort: Full Employment Without Inflation,"
- L. Randall Wray, 1997. "Government as Employer of Last Resort: Full Employment without Inflation," Economics Working Paper Archive wp_213, Levy Economics Institute.
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