The macro-economics of repressed stagflation. Part 2: The crisis of 2009+ and a reduction of the working week

Thomas Colignatus ()

MPRA Paper from University Library of Munich, Germany

Abstract: The current macro-economic crisis can be diagnosed as repressed stagflation bursting into the open. The Obama Administration and EU stimulus packages prevent economic collapse but do not tackle stagflation itself yet. Without proper measures, a protracted period of high unemployment or high inflation and continued instability can be expected. Instead, macro-economic theory can come at ease with deflation as a temporary state that is logically implied by the notion of price stability. What is crucial is to keep people in jobs. With proper tax measures the NAIRU is shifted to the proper position. The current situation seems to require a (temporary) reduction of the working week, for some areas even from 5 to 4 days.

Keywords: financial crisis; economic crisis; stagflation; inflation; unemployment; Phillipscurve; taxes; working time reduction (search for similar items in EconPapers)
JEL-codes: A1 E0 P16 (search for similar items in EconPapers)
Date: 2009-03-20
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (3)

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