Global Ramifications of Reoriented US Policies Towards Employment Generation

Parthapratim Pal () and Atulan Guha ()
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Parthapratim Pal: Indian Institute of Management Calcutta
Atulan Guha: Institute of Rural Management

Chapter 8 in Market, Regulations and Finance, 2014, pp 113-140 from Springer

Abstract: Abstract The economic downturn faced by USA has led to reorientation of some of its key economic policies. The objective of this chapter is to analyze and investigate the consequences and ramifications of the reoriented US policies which are geared towards domestic employment generation. Using the “Cambridge Alphametrics Model of the world economy” we develop different scenarios to model these changes in US policies. Our simulation indicates that it will be difficult to generate reasonably high level of employment in USA by reducing government intervention. Such a policy would require private investment in the USA to reach around 20 % of GDP, a level not seen in the last 30 years of US history. An alternate simulation shows that increasing state intervention coupled with implementing moderately protectionist policies would likely ensure a moderate recovery for the USA. The second scenario is unlikely to have a major impact on employment and growth pattern of the rest of the world.

Keywords: Employment; USA; Fiscal policy; Business fluctuations; International policy coordination and transmission (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isbchp:978-81-322-1795-4_8

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DOI: 10.1007/978-81-322-1795-4_8

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