The Job Guarantee and Eurozone Stabilisation

Martin J. Watts, Timothy Sharpe and James Juniper
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Martin J. Watts: University of Newcastle
James Juniper: University of Newcastle

Chapter Chapter 5 in The Job Guarantee and Modern Money Theory, 2017, pp 89-115 from Palgrave Macmillan

Abstract: Abstract Government macroeconomic policy is typically assessed against fiscal accounting imperatives; so called ‘sound’ finance. Modern Monetary Theory, which is underpinned by the principles of chartalism and functional finance, shows that sound finance is not useful for prescriptive policy since it fails to distinguish between (1) a sovereign currency government and non-sovereign currency government and (2) financing (initial finance) and funding (final finance). Instead, the Modern Money/Circuit theoretic approach reframes the debate regarding the appropriate (functional) conduct of fiscal and monetary policy, and is sensitive to specific institutional arrangements. The framework allows for a more informed and robust debate vis-à-vis finance and the Job Guarantee. This chapter engages in this debate by unpacking and extending the arguments of Harvey (2013) and Wray (2013) in the previous edited volume to critically assess the options and implications—macroeconomic and financial—of financing and funding the Job Guarantee for a sovereign currency and non-sovereign currency (Eurozone) government.

Keywords: Minimum Wage; Fiscal Policy; European Central Bank; Debt Ratio; European Monetary Union (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:bifchp:978-3-319-46442-8_5

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DOI: 10.1007/978-3-319-46442-8_5

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