A Small, Open Share Economy

Hans Aage

Cambridge Journal of Economics, 1988, vol. 12, issue 4, 471-79

Abstract: The essence of the argument for a share system as a permanent solution to stagflation problems consists of two basic propositions: that an economy-wide switch to profit sharing tends to lower prices without preceding unemployment, and that lower prices stimulate aggregate demand. Both of these properties are more plausible and more straightforward to justify if foreign trade is included in the model. But, this does not eliminate the possibility of a prevailing element of markup pricing, which may reverse the conclusion. In this case, income sharing tends to aggravate the problems of unemployment, inflation, and balance-of-payments deficit. Copyright 1988 by Oxford University Press.

Date: 1988
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