Financial Markets, Unemployment and Inflation Within a Circuitist Framework

Alain Parguez

Chapter 15 in Money and Production, 2024, pp 292-322 from Edward Elgar Publishing

Abstract: This paper addresses within a circuitist framework the fundamental relationship between financial markets and unemployment. It is shown that financial markets generate very strong constraints on firms’ planned expenditures and banks’ credit supply. These constraints explain both the inverse relationship between the money wage rate and the rate of return, which is required by firms, and the high level of unemployment. There is no labour market that could reconcile the supply of labour with firms’ demand for labour.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2024
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