Is Incomes Policy the Answer to Unemployment? (1982)

Richard Layard
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Richard Layard: London School of Economics and Political Science

Chapter 18 in Tackling Unemployment, 1999, pp 404-423 from Palgrave Macmillan

Abstract: Abstract In Western Europe unemployment has remained obstinately high ever since 1975. What has prevented governments from reducing it? The answer is simple. If unemployment were reduced by normal methods, inflation would rise. It follows that the only way to cut the long-run level of unemployment is to find some other way of controlling inflation. No such device will be costless. But if we could find any method that was less costly than unemployment, we ought to adopt it. Maurice Chevalier was asked in later life what he thought of old age. ‘It’s not so bad’, he replied, ‘when you consider the alternative’. That was a true economist talking, and it is also the spirit in which I shall approach the unhappy choices open to us.

Keywords: Inflation Rate; Real Wage; Wage Increase; Wage Equation; Phillips Curve (search for similar items in EconPapers)
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37920-6_18

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DOI: 10.1057/9780230379206_18

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