Government Debts and Inflation: Stumbling-Blocks in the Way of Keynesian Full Employment Policy

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Government Debts and Inflation: Stumbling-Blocks in the Way of Keynesian Full Employment Policy

Author:: Steindl, Josef

Scope:: Typoskript, 10 Blätter, handschriftliche Anmerkung auf Seite 1, nummeriert

Year of publication:: 1976

Source material date:: [vermutlich um 1976]

Description:: It has been maintained, or pretended, thet Keynesian policies have failed because of obstacles which made them unworkable. Among these are most prominent foreign balance deficits, accumulating government debt and inflation. I do not really believe that these have been sufficient to cause the great change in economic trends and in people's outlook since 1974 (or earlier), but they are serious problems, and, apart from foreign balance problems which all Keynesians have been fully aware of, and which depends entirely on international cooperation, they have not always been taken seriously enough. (Auszug, S. 1)

Note:: Unveröffentlichtes Typoskript.

Topic:: Economic history,economic theory,current developments

JEL Classification:: E12 [General Aggregative Models: Keynes, Keynesian, Post-Keynesian] H68 [Forecasts of Budgets, Deficits, and Debt]

Shelfmark:: S/M.59.5

Access:: Free access

7 4. For a single country a chronic tendency for relative wage cost to increase in relation to other countries might be a reason for tax favours to industry. For all industrial countries taken together this reason does not apply. It goes without saying that the restrictionist policy since 1974 and especially 1979 and 1980 has added to all these reasons for a weakening of the stimulus to invest a further and particularly strong one. Also the burden of the public debt has become vastly increased by the high interest policy. The list of causes does not necessarily suggest how one could undo them, but it gives perhaps food for thought. II. Just as budget deficits and taxation also inflation has started to be troublesome only after a time. In various countries there has been a fairly long period of full employ ment with moderate inflation rates - say of the order of 3 p.c. The theoretical reflection of this has been the structural theory of inflation which explains why a certain degree of inflation must necessarily accompany full employment (when wages are pulled up in industries with high productivity growth the wages in other industries follow so that the growth rate of

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