Sawyer, MC (2003) Employer of last resort: could it deliver full employment and price stability? Journal of Economic Issues, 37 (4). 881 - 907. ISSN 0021-3624
Abstract
Proposals under the headings of employer of last resort (ELR) and job guarantee have been made under which jobs would be available to all at a basic wage. These schemes promise a combination of full employment and price stability. This paper examines whether they would be able to deliver on such a promise. The paper discusses the notion of ‘functional finance’ which forms an important element of ideas on ELR. The nature and role of money as envisaged in the tax driven money approach which is often associated with the ELR proposals is critically examined. It is argued that whilst the ELR budgetary costs may be relatively small, this would also be the case from any public sector employment program. The question is raised as to whether there would be jobs of a type which could fit in with the ELR proposals, and what the nature of these jobs might be. The paper considers the extent to which ELR would involve underemployment and unemployment by another name. The possible inflationary implications of the ELR are next considered. This has two aspects: first to consider whether inflation would result from unemployment falling below any form of supply-side inflation barrier (such as a NAIRU), and second to consider whether the use of a base wage would bring price stability as claimed. In the subsequent section, the idea that ELR employment would form a buffer stock is critically examined.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | (c) 2003, M.E. Sharpe Inc. This is an author produced version of a paper published in the Journal of Economic Issues. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | employer of last resort; full employment; inflation; unemployment |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Economics Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 06 Dec 2013 12:31 |
Last Modified: | 20 Feb 2024 16:30 |
Published Version: | http://www.jstor.org/stable/4227957 |
Status: | Published |
Publisher: | M.E. Sharpe Inc. |
Identification Number: | 10.1080/00213624.2003.11506635 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:77125 |