 The slump in Europe: reconstructing open economy theoryEdmund Phelps and Jean-Paul Fitoussi SciencePo Working papers Main from HAL Abstract: The subject of this book is the alarming rise of unemployment in Europe during the eighties, which in 1985 reached levels that had not been seen since the Great Depression, and which shows no sign of falling dramatically. In its explanation of the slump in Europe, this book assigns a crucial role to the package of policy innovations in the US and introduces new theoretical elements to understand the mechanisms through which these shocks have been transmitted to Europe. The three processes which are central to the markets and the mark up on customer markets and the behaviour of contractual or indexed wages, and the cost or supply effects of real interest rates, are new to the macroeconomic analyses of slumps such as the recent one in Europe. The book examines the distinctive features of the 1980s slump; the fall of labour's share, the rise of productivity, and vanished excess capacity and reviews the implications of orthodox open economy theory. The authors develop a new theory which is consistent with the recent developments on both sides of the Atlantic and finally look at what could have been done to prevent the slump and at what can be done now to generate recovery. (Publisher's abstract) Keywords: Unemployment; Europe (search for similar items in EconPapers) Published in Blackwell Publishing, pp.145, 1988, 9780631155577 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-03393283 Access Statistics for this paper More papers in SciencePo Working papers Main from HAL |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.