Abstract
The goal of this chapter is to study the conditions required for the maintenance of full employment within a growing economy comprised of ongoing structural change. Two conditions are considered: an effective demand condition and a structural change condition (Pasinetti 1981). The effective demand condition is mostly associated with the work of John Maynard Keynes and has become a central focus in post-Keynesian economic analysis. As in Keynes (1964), post-Keynesians have rejected the notion that self-regulating markets bring about conditions to attain full employment, whereby full employment becomes only a special case scenario and unlikely to occur in a laissez faire economy. “Pump priming” stimulus may not be sufficient to bring the economy to full employment as different public policies have different effects on private sector employment. Rather, post-Keynesians have favored a targeted demand approach (Tcherneva 2011). Absent of direct federal job creation, fiscal policy must target job creating sectors, which will be much more effective than traditional aggregate demand stimulus.
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© 2013 Michael J. Murray and Mathew Forstater
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Murray, M.J. (2013). Effective Demand, Technological Change, and the Job Guarantee Program. In: Murray, M.J., Forstater, M. (eds) The Job Guarantee. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137297990_6
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DOI: https://doi.org/10.1057/9781137297990_6
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