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Full-Text Articles in Social and Behavioral Sciences
A Theory Of Economic Policy Lock-In And Lock-Out Via Hysterisis: Rethinking Economists’ Approach To Economic Policy, Thomas I. Palley
A Theory Of Economic Policy Lock-In And Lock-Out Via Hysterisis: Rethinking Economists’ Approach To Economic Policy, Thomas I. Palley
PERI Working Papers
This paper explores lock-in and lock-out via economic policy. It argues policy decisions may near-irrevocably change the economy’s structure, thereby changing its performance. That causes changed economic outcomes concerning distribution of wealth, income and power, which in turn induces locked-in changes in political outcomes. That is a different way of thinking about policy compared to conventional macroeconomic stabilization theory. The latter treats policy as a dial which is dialed up or down, depending on the economy’s state. Lock-in policy is illustrated by the euro, globalization, and the neoliberal policy experiment.
Wage Flexibility Or Wage Coordination? Economic Policy Implications Of The Wage-Led Demand Regime In The Euro Area, Englebert Stockhammer
Wage Flexibility Or Wage Coordination? Economic Policy Implications Of The Wage-Led Demand Regime In The Euro Area, Englebert Stockhammer
PERI Working Papers
Wage shares have fallen substantially in Europe since the early 1980s. To some extent this is due to a macroeconomic policy package that encourages wage flexibility and wage competition. A system of wage coordination in the Euro area would facility a return to a productivity-oriented wage policy by reducing wage competition. In a recent study on the demand effects of changes in functional income distribution Stockhammer, Onaran und Ederer (2007) find that the Euro area is in a wage-led demand regime. According to their results a reduction of the wage share by 1%-point leads to a reduction of demand by …