The idea of a job guarantee (JG) to tackle unemployment has become popular again over recent years. Critics often point to the fiscal costs and the macroeconomic impact of a government financing full employment. In this paper, we analyse the fiscal costs of a JG for long-term unemployed people over the age of 45 in Austria. We show that a JG pays off in the long run. Even if the amount of jobs to be provided increases in times of a recession, or if a government starts with a certain amount of jobs and increases it afterwards, the JG would pay for itself.
{"title":"Does a job guarantee pay off? The fiscal costs of fighting long-term unemployment in Austria","authors":"Simon Theurl, Dennis Tamesberger","doi":"10.4337/EJEEP.2021.0077","DOIUrl":"https://doi.org/10.4337/EJEEP.2021.0077","url":null,"abstract":"The idea of a job guarantee (JG) to tackle unemployment has become popular again over recent years. Critics often point to the fiscal costs and the macroeconomic impact of a government financing full employment. In this paper, we analyse the fiscal costs of a JG for long-term unemployed people over the age of 45 in Austria. We show that a JG pays off in the long run. Even if the amount of jobs to be provided increases in times of a recession, or if a government starts with a certain amount of jobs and increases it afterwards, the JG would pay for itself.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82688644","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-04-07DOI: 10.4337/EJEEP.2021.01.07
Santiago Craña Colella, M. Pellegrini
{"title":"Book review: Furtado, Celso (2020): The Myth of Economic Development, Medford, MA, USA and Cambridge, UK (111 pages, Polity Press, hardcover, ISBN 978-1-5095-4013-6; softcover, ISBN 978-1-5095-4014-3; ebook, ISBN 978-1-5095-4015-0)","authors":"Santiago Craña Colella, M. Pellegrini","doi":"10.4337/EJEEP.2021.01.07","DOIUrl":"https://doi.org/10.4337/EJEEP.2021.01.07","url":null,"abstract":"","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77979469","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-04-07DOI: 10.4337/EJEEP.2021.01.06
M. Lavoie
{"title":"Book review: Mazier, Jacques (2020): Global Imbalances and Financial Capitalism: Stock-Flow-Consistent Modelling, London, UK and New York, NY, USA (318 pages, Routledge, hardcover, ISBN 978-1-138-34558-4; also available as ebook)","authors":"M. Lavoie","doi":"10.4337/EJEEP.2021.01.06","DOIUrl":"https://doi.org/10.4337/EJEEP.2021.01.06","url":null,"abstract":"","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79043703","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The US economic expansion which began in 2009 was unusually prolonged but relatively weak. Profitability and investment strengthened between 2010 and 2015 but then began to falter. After Trump took office in 2017 there was a minor recovery in investment but the proceeds of major tax cuts were overwhelmingly used to finance payouts to share owners. Unemployment fell steadily from 2010 but with a shift towards lower-paid jobs. Median wages increased from around 2014, but while those for women had risen steadily since the 1980s, those for men only recuperated to their 1980 level in 2018. By contrast, top incomes soared. The impact of the COVID-19 epidemic was partly cushioned by huge government spending programmes, but unemployment among less-skilled workers increased strongly, while the massive monetary response led to an unprecedented bonanza for the rich. The Biden government's first major initiative extended unemployment benefits and promoted a national response to the health emergency, but failed to secure an increase in the national minimum wage to $15 an hour.
{"title":"The twilight of neoliberalism in the USA?","authors":"T. Evans","doi":"10.4337/ejeep.2021.0079","DOIUrl":"https://doi.org/10.4337/ejeep.2021.0079","url":null,"abstract":"The US economic expansion which began in 2009 was unusually prolonged but relatively weak. Profitability and investment strengthened between 2010 and 2015 but then began to falter. After Trump took office in 2017 there was a minor recovery in investment but the proceeds of major tax cuts were overwhelmingly used to finance payouts to share owners. Unemployment fell steadily from 2010 but with a shift towards lower-paid jobs. Median wages increased from around 2014, but while those for women had risen steadily since the 1980s, those for men only recuperated to their 1980 level in 2018. By contrast, top incomes soared. The impact of the COVID-19 epidemic was partly cushioned by huge government spending programmes, but unemployment among less-skilled workers increased strongly, while the massive monetary response led to an unprecedented bonanza for the rich. The Biden government's first major initiative extended unemployment benefits and promoted a national response to the health emergency, but failed to secure an increase in the national minimum wage to $15 an hour.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75968225","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article compares inequality in US employment across social groups in the Great Recession and the COVID-19 pandemic. We develop an inequality measure that captures both how much employment declines during a recession and the persistence of those declines. The results show a significant shift of job loss from men in the Great Recession to women in the COVID-19 lockdown. White workers fare better than other racial/ethnic groups in both recessions. Black and Hispanic women are hit especially hard in the COVID-19 pandemic. With our job loss measure, less educated workers had modestly worse outcomes in the Great Recession. However, during COVID-19, less educated workers suffer much more severe employment consequences than more educated groups. We discuss long-term effects of employment inequality and how these findings are relevant to debates about policy responses.
{"title":"US Employment Inequality in the Great Recession and the COVID-19 Pandemic","authors":"Steven M. Fazzari, Ella Needler","doi":"10.36687/INETWP154","DOIUrl":"https://doi.org/10.36687/INETWP154","url":null,"abstract":"This article compares inequality in US employment across social groups in the Great Recession and the COVID-19 pandemic. We develop an inequality measure that captures both how much employment declines during a recession and the persistence of those declines. The results show a significant shift of job loss from men in the Great Recession to women in the COVID-19 lockdown. White workers fare better than other racial/ethnic groups in both recessions. Black and Hispanic women are hit especially hard in the COVID-19 pandemic. With our job loss measure, less educated workers had modestly worse outcomes in the Great Recession. However, during COVID-19, less educated workers suffer much more severe employment consequences than more educated groups. We discuss long-term effects of employment inequality and how these findings are relevant to debates about policy responses.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88723631","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper provides a discussion of the relationships between austerity, the macroeconomic performance of the Greek economy, debt sustainability, and the provision of healthcare and other social services since 2010. It explains that austerity was imposed in the name of debt sustainability. However, there was a vicious cycle of recession and austerity: each round of austerity measures led to a deeper recession, which increased the debt-to-GDP ratio and therefore undermined the goal of debt sustainability and led to another round of austerity. One of the effects of the austerity policies was the significant reduction of healthcare expenditure, which made Greece more vulnerable to the recent pandemic. Finally, it shows how recent pre-COVID debt sustainability analyses projected that Greek public debt would become unsustainable even under minor deviations from an optimistic baseline. The pandemic shock will thus lead to an explosion of public debt. This brings again to the fore the need for a restructuring of Greek public debt, and other policies that will address the eurozone’s structural imbalances.
{"title":"Crisis, austerity, and fiscal expenditure in Greece: recent experience and future prospects in the post-COVID-19 era","authors":"M. Nikiforos","doi":"10.4337/EJEEP.2021.0076","DOIUrl":"https://doi.org/10.4337/EJEEP.2021.0076","url":null,"abstract":"This paper provides a discussion of the relationships between austerity, the macroeconomic performance of the Greek economy, debt sustainability, and the provision of healthcare and other social services since 2010. It explains that austerity was imposed in the name of debt sustainability. However, there was a vicious cycle of recession and austerity: each round of austerity measures led to a deeper recession, which increased the debt-to-GDP ratio and therefore undermined the goal of debt sustainability and led to another round of austerity. One of the effects of the austerity policies was the significant reduction of healthcare expenditure, which made Greece more vulnerable to the recent pandemic. Finally, it shows how recent pre-COVID debt sustainability analyses projected that Greek public debt would become unsustainable even under minor deviations from an optimistic baseline. The pandemic shock will thus lead to an explosion of public debt. This brings again to the fore the need for a restructuring of Greek public debt, and other policies that will address the eurozone’s structural imbalances.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72421641","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is a widespread perception around the world that the Washington Consensus is dead. In contrast to the world tide prior to the global financial crisis of 2008, this paper aims to demonstrate that the conditionalities inspired by the Washington Consensus and imposed by the international financial institutions are still pertinent. Using as a case study the Greek financial crisis of 2010–2014, it is verified that the Troika’s austerity imposed conditionalities that neatly fit within the Washington Consensus framework. However, consistent with the neoclassical framework, the Washington Consensus recommends the reduction in taxes, whereas the Troika’s austerity conditionalities entail an increase in taxes. It appears that a striking paradox is present, in that the neoclassical tax conditionality policy is sacrificed in the name of increased tax revenue. This allegedly perplexing tax policy and blatant conflict, which appears to controvert the very essence of the neoclassical ideological framework of the Washington Consensus and the IMF, will be further explored.
{"title":"The Troika’s conditionalities during the Greek financial crisis of 2010–2014: the Washington Consensus is alive, well, and here to stay","authors":"J. Marangos","doi":"10.4337/EJEEP.2021.0075","DOIUrl":"https://doi.org/10.4337/EJEEP.2021.0075","url":null,"abstract":"There is a widespread perception around the world that the Washington Consensus is dead. In contrast to the world tide prior to the global financial crisis of 2008, this paper aims to demonstrate that the conditionalities inspired by the Washington Consensus and imposed by the international financial institutions are still pertinent. Using as a case study the Greek financial crisis of 2010–2014, it is verified that the Troika’s austerity imposed conditionalities that neatly fit within the Washington Consensus framework. However, consistent with the neoclassical framework, the Washington Consensus recommends the reduction in taxes, whereas the Troika’s austerity conditionalities entail an increase in taxes. It appears that a striking paradox is present, in that the neoclassical tax conditionality policy is sacrificed in the name of increased tax revenue. This allegedly perplexing tax policy and blatant conflict, which appears to controvert the very essence of the neoclassical ideological framework of the Washington Consensus and the IMF, will be further explored.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82985033","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Liberalization policies of international movements of capital and labour have represented a crucial feature of the so-called ‘globalization’ era. More recently, however, several restrictions on migratory movements have been adopted to face the alleged negative effects of immigration. On the contrary, free movement of capital has almost always been preserved. This paper aims to verify whether this current framework of international economic policy can be justified in economic terms. We propose an unprecedented direct comparison between the macroeconomic and distributive impacts of ‘extreme’ episodes of net capital outflows and net migrant inflows in OECD countries between 1970 and 2017. Applying a fixed-effects approach and an event-study approach, we show that GDP growth and functional income distribution have null or even positive statistical relationships with immigration, while they have largely negative statistical relationships with capital flights. More specifically, extreme migrant inflows are not related or in some cases are positively related to real GDP growth, real GDP per capita growth and the wage share, while extreme capital outflows are negatively related to real GDP growth and real GDP per capita growth. These results contrast with current policy agendas and seem to suggest that controls should concern capital movements rather than migratory flows of people.
{"title":"Migrant inflows, capital outflows, growth and distribution: should we control capital rather than immigration?","authors":"E. Brancaccio, A. Califano, Fabiana De Cristofaro","doi":"10.4337/EJEEP.2021.0074","DOIUrl":"https://doi.org/10.4337/EJEEP.2021.0074","url":null,"abstract":"Liberalization policies of international movements of capital and labour have represented a crucial feature of the so-called ‘globalization’ era. More recently, however, several restrictions on migratory movements have been adopted to face the alleged negative effects of immigration. On the contrary, free movement of capital has almost always been preserved. This paper aims to verify whether this current framework of international economic policy can be justified in economic terms. We propose an unprecedented direct comparison between the macroeconomic and distributive impacts of ‘extreme’ episodes of net capital outflows and net migrant inflows in OECD countries between 1970 and 2017. Applying a fixed-effects approach and an event-study approach, we show that GDP growth and functional income distribution have null or even positive statistical relationships with immigration, while they have largely negative statistical relationships with capital flights. More specifically, extreme migrant inflows are not related or in some cases are positively related to real GDP growth, real GDP per capita growth and the wage share, while extreme capital outflows are negatively related to real GDP growth and real GDP per capita growth. These results contrast with current policy agendas and seem to suggest that controls should concern capital movements rather than migratory flows of people.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72801287","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"‘It is clear that this kind of deregulated capitalism will not survive in the end’","authors":"Eckhard Hein","doi":"10.4337/EJEEP.2021.0073","DOIUrl":"https://doi.org/10.4337/EJEEP.2021.0073","url":null,"abstract":"","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78850234","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-01DOI: 10.4337/ejeep.2020.03.12
Eckhard Hein
{"title":"Book review: Łaski, K. (2019): Lectures in Macroeconomics: A Capitalist Economy Without Unemployment, Jerzy Osiatyński and Jan Toporowski (eds), Oxford, UK and New York, NY, USA (192 pages, Oxford University Press, ISBN 978-0-19-884211-8)*","authors":"Eckhard Hein","doi":"10.4337/ejeep.2020.03.12","DOIUrl":"https://doi.org/10.4337/ejeep.2020.03.12","url":null,"abstract":"","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2020-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79685486","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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