MACROECONOMICS FOR THE 21ST CENTURY: FULL EMPLOYMENT AS A POLICY GOAL

Roger Farmer

National Institute Economic Review, 2010, vol. 211, issue 1, 109-114

Abstract: This paper describes research that integrates Keynesian and Walrasian economics in a new way. The author develops a model in which high unemployment can persist and any unemployment rate can occur as an equilibrium. Equilibrium is selected by the self-fulfilling beliefs of asset market participants. Using this new framework, the author argues that fiscal policy is not the best solution to the problem of restoring full employment. A policy of asset market management, similar to quantitative easing, is put forward as a more effective approach.

Keywords: Unemployment; Keynesian economics; quantitative easing; financial crisis (search for similar items in EconPapers)
Date: 2010
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Journal Article: Macroeconomics for the 21st Century: Full Employment as a Policy Goal (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:niesru:v:211:y:2010:i:1:p:109-114

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