Abstract
In the ‘neoclassical synthesis’, unemployment is not a permanent problem. The economy is always tending towards full employment, but the wage and price stickiness that slows it down does justify some stabilising intervention by government. Thus, Keynes’ popularisers emasculated his revolution into a reform.1 This view seemed to fit the facts of the 1950s and 1960s well enough. As shown in Chapter 2, these years were dominated by ‘cycles’ — ups and downs in economic activity of a few years’ duration — which never strayed far from full employment.
‘Flag? I see no flag.’
HORATIO, LORD NELSON
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References
E. S. Phelps et al, Micro economic Foundations of Employment and Inflation Theory (Norton, 1970).
See James Tobin, ‘Stabilization Policy Ten Years After’, Brookings Papers, (1: 1980), pp. 58–61.
For a survey of this evidence, see my paper in Zmira Hornstein et al (eds), The Economics of the Labour Market (HMSO, 1981).
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© 1984 Tim Hazledine
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Hazledine, T. (1984). The Wacky World of Mark II Monetarism. In: Full Employment without Inflation. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-17697-7_4
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DOI: https://doi.org/10.1007/978-1-349-17697-7_4
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