Selective Use of Discretionary Public Employment and Economic Flexibility

Mathew Forstater
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Mathew Forstater: The Jerome Levy Economics Institute

Macroeconomics from University Library of Munich, Germany

Abstract: Full employment is normally associated with structuralrigidities that may result in production bottlenecks and inflationary pressures. Flexibility or elasticity of the production system istherefore a desirable feature of an economic system. Many standardmodels, however, exhibit flexibility because of the use of unacceptablyunrealistic assumptions. While unemployment and excess capacity areimportant real- life factors that endow economic systems with flexibility, the flexibility gained in this manner comes at a high social and economiccost. This paper explores these issues and proposes the selective use ofdiscretionary public employment as a means of promoting higher levels ofemployment--and even full employment--without creating structuralrigidities, resulting in negative enivronmental consequences, or causing undesirable geographic dislocation of workers.

JEL-codes: E (search for similar items in EconPapers)
Pages: 28 pages
Date: 1998-02-10
New Economics Papers: this item is included in nep-ltv, nep-pbe, nep-pke and nep-pub
Note: Type of Document - Acrobat PDF; prepared on IBM PC ; to print on PostScript; pages: 28; figures: included
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:9802014

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