Conditions Of Full Employment Research Articles

New trade theory converges to the old trade theory—An elementary theoretical perspective

AbstractWe introduce factor specificity to reflect the cost of adjustment of reallocating factors between technologies that determine fixed costs and variable costs in a typical Dixit–Stiglitz–Krugman (DSK) model of trade, retaining all other standard specifications of such a framework. We show that such an apparently benign change fundamentally alters the results of the DSK model. The number of varieties and output per variety depends entirely on full employment conditions. Thus, DSK and Heckscher–Ohlin–Samuelson (HOS) models, which represent the major workhorses of old trade theory, converge in the sense that now the number of varieties and outputs per variety are completely determined by factor endowments.

Trade Implications on Active Pharmaceutical Ingredients (APIS) Due to COVID-19 Pandemic and India China Altercation

ABSTRACT: India's pharmaceutical sector has been one of the largest manufacturers of generic drugs globally. During the pandemic, most countries were dependent on imports of generic drugs from India. However, India has been relying on resources from China for Active Pharmaceutical Ingredients (APIs) which are the raw material for preparing generic drugs. We considered, in our analysis, branded product groups of Paracetamol and Amoxicillin due to their extensive use in the treatment of COVID-19. From a thorough market analysis of both the drugs, we conclude that firms have a monopoly over their brands but compete within the same product group and operate in their respective market under varying prices within certain bandwidths which resembles the feature of monopolistic competitive market. We have introduced compensating function a la Helpman (1981) in the pharmaceutical goods market with the assumption that an 'ideal product' exists among the pharmaceutical goods. Given the framework, this paper explores a general equilibrium model set in a monopolistic competitive product market for branded drugs. We concluded through our propositions that expanding the pharmaceutical sector will increase the employment of unskilled labor under no capacity constraint. We will observe an increase in wages of unskilled labor only under full employment conditions wherein we would observe that the expansion of pharmaceutical good will increase wages in the unskilled labor market. However we obtain an intriguing result wherein we obtain that despite instances of limiting trade dependence on China through implementation of policies like 'Aatmanirbhar Bharat' and 'profit linked incentive schemes', yet to maintain the status quo in the global market for generic drugs, India's dependence on China would increase, owing to API imports due to the pandemic crisis. While India can grab the opportunity in the form of increased demand for pharmaceutical goods to increase the employment level of the economy but this improvement in welfare is also dependent on the degree of dependency of API India has on China. The Indian government has recognized the same through the incorporation of 'Covid-Suraksha' and PLI schemes to minimize import dependency, and accelerate the development of APIs and the production of indigenous drugs.

A National Balance Sheet Approach to the Natural Rate of Interest

We present a new estimation method for the “natural” interest rate and estimate its value for the US economy from 1961 to 2020. Presuming theoretical balance between returns on national assets and cost of national capital, we use US balance sheet information to derive a “breakeven” or implicit fundamental risk-free rate. Because, unlike r-star (r*), our rate does not presume conditions of full employment, its value should generally be lower than that of r*. We find, however, that our rate has remained above r* for much of the past 25 years, suggesting that the Federal Reserve’s accommodative policy for the past two decades has been more aggressive than previously believed. Understanding the difference between our natural rate, r*, and current market rates is critical for proper decisions in the fixed income markets.

Labour in the Technocratic Frame: Macroeconomic Policy and Wages in 1950s Australia

Though the labour market has always been central to macroeconomics, policy has usually had no instrument for intervening directly in the wage-setting process. But in the mid-twentieth century, economists commonly believed that there should be such an instrument. In 1950s Australia, it seemed that the arbitration system could potentially be used as such. This article uses Trevor Swan’s contemporary model of Australian policy in the 1950s to understand the tensions facing policy and explain why wage control seemed to be a solution. The arbitration judges began to consider macroeconomics in their decisions, and the unions adapted by presenting macroeconomic arguments of their own. In full employment conditions, labour had considerable economic power outside the tribunal, and the limitations of arbitration as an instrument of policy raised the shadow of unemployment as an alternative disciplining device.

Clark's Malthus delusion: response to ‘Farming in England 1200–1800’

AbstractClark's claims about the scale of English agricultural output from the 1200s to the 1860s flout historical and geographical reality. His income‐based estimates start with the daily real wages of adult males and assume that days worked per year were constant. Those advanced in British economic growth make no such assumption and instead are built up from the output side. They correlate better with population trends and are consistent with an economy slowly growing and becoming richer. Clark's denial that such growth occurred, his assertion that substantially more land must have been under arable cultivation, his belief that conditions of full employment invariably prevailed in the countryside at harvest time, his concern that the wage bill would have exceeded the value of output in British economic growth, his refusal to consider the possibility that the working year was of variable length, and his assertion that output per acre must have been equalized across arable and pasture are all shown to be figments of his ‘Malthus delusion’.

(Development of the Labor Market in Bulgaria)

Russian Abstract: После Второй мировой войны реально существующие условия для полной занятости дают возможность почти всем странам сосредоточить свои усилия на вопросах эффективности труда, поведения участников в трудовом процессе, их отношения к труду. После 70-х годов во всем мире проводятся существенные изменения в экономической и социальной жизни, которые дают отражение и на «отношении к труду» и трудовые отношения в смысле определения этого понятия. Углубляющиеся несоответствия между спросом и предложением рабочей силы выставляют на передний план понятие рынка труда, в котором основной упор ставится на отношение между работодателями и работниками. Появляются основные признаки так названной «теневой экономики» и «теневого рынка труда». Количественные и качественные расхождения приводят к необходимости мер, с одной стороны, по снижению предложения рабочей силы и, с другой стороны, по стимулированию спроса на рабочую силу. Важными проблемами в этот период является маргинализация определенных групп населения и растущая инфляция. Для стран Европейского союза, США и Японии время после 1980-х годов характеризуется известными достижениями в обеспечении экономического роста, что дало возможность соответственному росту занятости, хотя и более низкими темпами. Структурные изменения в экономике имеют такой характер, что использование старых методов регулирования занятости и безработицы являются уже недостаточными. English Abstract: After the Second World War, the real conditions for full employment enable almost all countries to concentrate their efforts on issues of labor efficiency, participants' behavior in the labor process, their towards work. After the 1970's, significant changes in the economic and social life were carried out around the world, which reflected both the attitude to work and the labor relations in the sense of defining this concept. Deepening discrepancies between the supply and demand of the labor force put forward the concept of the labor market, in which the emphasis is placed on the relationship between employers and employees. The main signs of the so-called shadow and shadow labor market appear. Quantitative and qualitative discrepancies lead to the need for measures, on the one hand, to reduce the supply of labor and, on the other hand, to stimulate demand for labor. Important problems in this period are the marginalization of certain population groups and growing inflation. For the countries of the European Union, the United States and Japan, the period after the 1980s is characterized by well-known achievements in economic growth, which has made it possible for the corresponding growth in employment, albeit at a lower rate. Structural changes in the economy are of such a nature that the use of old methods of regulating employment and unemployment is already inadequate.

‘It’s not like a normal 9 to 5!’: the learning journeys of media production apprentices in distributed working conditions

An apprenticeship in media production in England is at the centre of this case study exploration. The context is exemplified by the organisation of the process of production around project teams and the development of project-based working cultures. Given these developments, the working conditions and learning opportunities presented to apprentices can be characterised as de-centred and distributed. This contrasts with the characterisation of apprentices’ learning as novices who develop expertise in stable, well-bounded vocational communities. Through an analysis of young apprentices’ journeys, we argue that despite the challenges presented, the case study exemplifies the extent to which the apprenticeship is capable of innovation in project working as opposed to full employment conditions. Through its focus on media apprentices’ journeys, this paper makes visible the specific experience of learning in project working, distributed and de-centred working conditions. We conclude by referring to an ideal typical conception of the model of learning underpinning the apprenticeship which may be useful as an heuristic tool for others involved in designing and/or researching apprenticeships in project working conditions.

The origins and evolution of military Keynesianism in the United States

From after World War II until late 1971, the U.S. economy demonstrated new capacities in terms of macroeconomic stability during the so-called Golden Age: recessions were brief and shallow while growth was strong, generating shared returns for the working class, a burgeoning middle class, as well as for capital-owners. Neither then nor up to now has there been sufficient recognition of the key role played by military expenditures in this dynamic process. These enormous outlays at times accounted for as much as 25 percent of gross domestic product—including their induced multiplier effects. This article examines the origins of what has been termed “military Keynesianism” during the Golden Age, emphasizing the little-known leading role played by Leon Keyserling. Keyserling exercised behind-the-scenes power in order to convert Keynesian theory into a macroeconomic policy that would be both consistent with the U.S. institutional context and sufficiently large to promote long-term conditions for full employment. With a degree of audacity, at a historically opportune moment given the socioeconomic resonance of the foundational document known as “NSC-68” promulgated by the “state within the state”—the National Security State—Keyserling successfully challenged the fallacious neoclassical “law” of guns or butter.

Orígenes y evolución de la política fiscal militar postkeynesiana en Estados Unidos

After the Second World War, during the so-called “Golden Age” the U.S. economy, until late 1971, demonstrated new capacities in terms of macroeconomic stability: recessions were brief and shallow while growth was strong, generating shared returns for the working class, a burgeoning middle class and for capital-owners. Neither then or since, up to the moment, has there been sufficient recognition of the key role played by military expenditures in this dynamic process accounting for at times —including induced multiplier effects— as much as twenty-five percent of the GDP. In this article we examine the origins of what has been termed “Military Keynesianism” during the Golden age, emphasizing the little-known leading role played by Leon Keyserling, who exercised behind-the-scenes power in order to convert Keynesian theory into a macroeconomic policy consistent with the U.S. institutional context that would be sufficiently large to promote long-term conditions of full employment. With a degree of audacity, at an historically opportune moment given the socioeconomic resonance of the foundational document known as “NSC-68” promulgated by the “State within the State” —the National Security State— Keyserling successfully challenged the fallacious neoclassical “law” of guns or butter.

Cyprus small business ventures invigorate the economy

AbstractCyprus has managed to advance itself and be recognized as one of the world's 32 advanced economies. By supporting local and foreign socioeconomic interests over the years, the small island‐nation today boasts rapid growth, full employment conditions, external and internal stability, strong telecommunications infrastructure, and a society well prepared to embrace the emerging knowledge economy. Recognizing its susceptibility to external economic trends as well as its attraction for various migrant groups, however, the people of Cyprus have embraced the benefits of putting their social capital to financial gain and the improvement of quality of life by supporting local business and welcoming foreign investment. © 2012 Wiley Periodicals, Inc.

A social innovation or a product of its time? The Rehn–Meidner model's relation to contemporary economics and the Stockholm school

A wage and economic-policy programme for full employment, price stability, growth and equity was developed by two Swedish trade-union economists in the early post-war period. A restrictive macroeconomic policy, a wages policy of solidarity and an active labour-market policy are the cornerstones of the Rehn–Meidner model. The model was influenced by Hans Singer's analysis of the fallacies of incomes policy under full employment conditions. However, it is difficult to find equivalences in contemporary economics to the model's combination of policy goals and instruments, its proposed relation between the instruments, or to its emphasis on the role of actual profits in wage formation.

The Output Gap and Cyclical Movements of Tourism, GDP and Their Transmission Mechanism: Case of Croatia

The output gap, usually defined as the difference between the real GDP and that of the potential GDP, indicates the imbalance existing in a real economy. The output gap is based on the definition of unobserved potential output. This article presents estimations of the output gap in Croatian economy in the long run. The co-integration analysis is used to estimate the Cobb-Douglas production function of aggregate output from 1952-2004 and the Vector Error-Correction model is developed to analyze the relationships between output and production factors. The output gap is obtained with full labor force utilization corrected by the NAWRU rate. We described potential GDP as the maximum quantity of output the economy can produce under conditions of full employment (which is understood as the maximum level of employment not generating wage inflationary pressures). To identify the transmission mechanism of observed cyclical components of Croatian GDP and tourism output, we used a multi-equation framework by means of a VAR model.

A Pasinettian approach to international economic relations: the pure labor case

In this paper, the pure labor version of Pasinetti's model of structural change and economic dynamics is extended to consider international economic relations. The conditions for full employment, full expenditure of national income and trade balance equilibrium are established along with solutions for the systems of physical quantities and prices in an open economy. Analytical results concerning the benefits of international trade and learning are studied with formal rigor. Then static and dynamic aspects of the principle of comparative cost advantages are analyzed considering the determinants of the level of specialization and international prices.

An Extension of the Structural Change Model to International Economic Relations

ABSTRACTIn this paper Pasinetti's model of structural economic dynamics (1981) is extended to consider international economic relations. Conditions for full employment, full expenditure of income and equilibrium of the trade balance are established for an open economy that requires capital goods to produce final commodities. Analytical results concerning the benefits from free trade and international learning are formally studied. In addition, static and dynamic aspects of the ‘principle of comparative cost advantage’ are analysed considering the determinants of the specialization level.

Hegemonie Modulation and the Discourse of Fiscal Crisis

In the decades following World War II global capital revolved around the Fordist accumulation strategy. This strategy was centered around processes of mass production, the Taylorist or habituated worker, and the aggressive promotion of mass consumption. Fordism was served well by the widely accepted idea of the Keynesian-welfare state, a state that could intervene directly into the economy to maintain the conditions of full employment, thereby dampening the cyclical shocks to domestic economies by sustaining consumption. In the last quarter century, however, we have witnessed a movement away from Fordist arrangements.

Friends, Enemies, and Factor Diversification: Implications for Protectionist Pressures

This paper examines the relationship between changes in commodity prices and changes in factor prices when individuals can diversify their factor owner ship portfolios. In a closed economy, it is always possible to find a distribution of factor ownership which makes everyone indifferent to any small, exogenous price change and which satisfies the conditions for full employment of each fac tor. Such a distribution of factor ownership would dissipate interest in any price change since it would leave everyone's real income unchanged. In an open econ omy, it may not be possible to find such a distribution of factor ownership.

Labour value and socialist economic calculation

The use of labour values as a basis for economic calculation in a socialist economy is defended. A resource allocation mechanism is outlined that uses a combination of labour value calculation with market clearing prices for consumer goods. Conditions for full employment are specified. A type theoretic analysis of economic calculation is presented. Information theory is used to estimate the information content of real price vectors. It is demonstrated that both price calculations and value calculations are type theory equivalent and that both involve information loss. It is shown that modern computer technology is capable of computing up to date labour values with comparative ease.

Conflict between the efficiency and equity goals of manpower policies

We have shown in this paper that there is a poor chance under the purely neoclassical economic regime for simultaneously realizing the optimal goals of manpower policies, namely maximizing economic efficiency (allocative goal), distributive equity (X-efficiency goal) and price stability (economic stabilization goal). Consequently, both theory and evidence received from developing and industrialized countries point to the fact that the goal of distributive equity in manpower policies has not been realized, and that focus on this goal appears to fade away in preference to that given on aggregative fiscal and monetary policies for realizing aggregative full-employment conditions, not reduction of structural unemployment.

La structure de la main d'œuvre comme facteur de changement dans l'industrie textile de l'après-guerre : exemple polonais

Two periods of development of labour force in Poland after World War II can be distinguished. There were four main features of the development of labour resources before the seventies, ie. A high dynamics of labour force growth, professional activation of potential labour resources, shift of considerable labour resources from agriculture to other sectors. and a rapid rise of the qualifications of manpower resources. Until the seventies the economic growth of Poland was based among others on the abundance of labour force resources. One of the main objectives of the social and economic policy in that period was creating conditions for full employment. Such a situation favoured the development of the Polish textile industry which needed great amount of labour. The employment in textile industry grew fast to reach 4782 thousand in 1975. The situation in the labour market changed in the seventies, and in 1973 a certain shortage of manpower could be felt ; at first it applied only to male workers, later also to female workers. In 1980 the employment in textile industry decreased to 441.6 thousand. The difficulties were aggravated by the fact that work in this branch was not attractive because of work in shifts and low wages. There were no more reserves of female workers. The shortage of labour in the textile industry in seventies resulted in the necessity of modernization of this industrial branch and changes in the structure of labour force. The rationalization of employment became essentiel. The level of qualifications of manpower was rising. The modernization resulted also among others in the decrease in the employment of productive workers and changes in the structure of employment in particular professions. In the nearest future the shortage of labour resources will still influence the directions of the development of textile industry and should promote further improvement in technics and organization.

Unemployment and Benefit-Cost Analysis: A Case Study Test of a Haveman-Krutilla Hypothesis

Since the early 1950s there has been a marked increase in the use of benefitcost analysis in designing public projects and in choosing between alternative public expenditures. One of the important problems emerging from this use of benefit-cost analysis concerns the determination of the true social cost of labor and other resources. Theory indicates that during periods of full employment market prices are the appropriate indications of social opportunity costs. When there is substantial unemployment of factors, however, the market price may overstate the true opportunity cost of using a factor in a public works project. Haveman and Krutilla attempted to overcome this problem in a 1967 article later expanded to book length (Haveman, Krutilla and Steinberg 1968). The present paper is an empirical analysis of the hypothesis introduced by Haveman and Krutilla: Does the nominal labor wage in an area of high unemployment and low income overstate the real cost to society of employing that labor? Specifically, the study is directed toward an analysis of the on-site labor force associated with constructing a large multipurpose dam in southcentral Pennsylvania. Several authors have addressed the problem of adjusting benefit-cost ratios to reflect less than full employment conditions. In general, the solutions suggested have been either to reduce the cost of the factors to reflect a lower i ce th early 1950s t ere has been a social opportunity cost, or alternatively, to increase the benefits of projects which employ otherwise unemployed resources. Sewell (1965), Harberger, et al. (1972), Khatkhatke (1961), and Marglin (1962) have argued that the adjustments should be made to costs, while McKean (1958) and the United States Army Corps of Engineers (1966) feel that the adjustment should be made to benefits. The Haveman and Krutilla study upon which this report is based follows the thinking of the former group. They have developed a method for evaluating a public expenditure project that adjusts the nominal factor prices to reflect any unemployment of resources and idle capacity in industry. Haveman and Krutilla studied the period between 1957 and 1964, a time of substantial nonfrictional unemployment that persisted nationally despite rising income and employment. They assessed the national and regional impact of public expenditures using models based on Leontief input-output systems. The models were designed to enable the analyst to decompose a dollar expended for a final good into its detailed sectoral