The Breakdown of the Postwar Boom

Lars Anell

The ANNALS of the American Academy of Political and Social Science, 1987, vol. 492, issue 1, 22-35

Abstract: Mass unemployment has returned to Europe, and we know precious little about its causes and effective remedies. There is, however, a clear connection with the breakdown of the postwar boom. In the 1970s a long period of rapid stable growth abruptly gave way to sluggish, unstable growth and financial insecurity. The general consensus among economists is that classical unemployment increased rapidly during the 1970s. There are, however, manifest problems on the demand side. The international economic system is intrinsically geared toward contraction. The classical remedy—that is, lower real wages—could work in theory. In practice, it is too painful and wasteful to be politically feasible. The obvious measures are lower payroll taxes and social service charges in order to reduce labor costs without reducing wages; internationally coordinated demand management; and more employment-focused priorities.

Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:492:y:1987:i:1:p:22-35

DOI: 10.1177/0002716287492001003

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