Cost-Determined and Demand-Determined Prices: Lessons for the Industrialised World from Development Economics

Dipak Ghosh and Kobil Ruziev

No 2008-22, Stirling Economics Discussion Papers from University of Stirling, Division of Economics

Abstract: In labour surplus developing countries a strategy based on the application of the Keynesian multiplier to generate employment is constrained by the availability of resources. In some of Keynes's writings in general and those on the post-War employment and commodity policy in particular it seems that Keynes himself became aware of the limitation of the savings investment multiplier in generating and maintaining full employment in industrialized economies. The paper argues that the time has now arrived for the economic policy makers to wake up to the limitations of expansionary fiscal and monetary policy alone to combat the current downturn in economic activities.

Keywords: wage goods; Commod Control; employment; fix-price; flex-price; Bretton Woods (search for similar items in EconPapers)
Date: 2008-11
New Economics Papers: this item is included in nep-lab and nep-pke
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