Unemployment, Inflation, and the Job Structure
In this working paper James K. Galbraith, professor of economics at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin, rejects the analytical construct within which many economists currently operate, that is, the construct in which in the extreme macroeconomic behavior is identical to the behavior reflected in microeconomic demand and supply curves. He rejects it on the theoretical and practical grounds that microeconomic categories (supply, demand, price, and quantities) "have little bearing on important policy questions." The markets that have a bearing on policy are either asset markets (for which the rules are dramatically different from those for flow markets) or are not really markets at all but, rather, a set of deeply structural social relations. According to such thinking, microeconomic issues become secondary in the policy arena and macroeconomic policy tools—spending, taxes, incomes policies, and interest rates—take the fore.
|Date of creation:||20 Oct 1998|
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|Note:||Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 31; figures: included|
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- Gordon, David M, 1988. "The Un-natural Rate of Unemployment: An Econometric Critique of the NAIRU Hypothesis," American Economic Review, American Economic Association, vol. 78(2), pages 117-23, May.
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- Lucas, Robert E, Jr, 1981. "Tobin and Monetarism: A Review Article," Journal of Economic Literature, American Economic Association, vol. 19(2), pages 558-67, June.
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