Bill Mitchell — Keynes and the Classics – Part 1

I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to complete the text by the end of this year. Comments are always welcome. Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it.



Chapter 11

11.1 Introduction and Aims

In Chapter 10, we discussed issues relating to labour market measurement. In this Chapter we will focus on theoretical concepts that underpin the measurement of economic activity in the labour market and the broader economy.

The Chapter has five main aims:

• To explain why mass unemployment arises and how it can be resolved.
• To develop the concept of full employment.
•  To consider the relationship between unemployment and inflation – the so-called Phillips Curve.
• To develop a buffer stock framework for macroeconomic management (full employment and price stability) and compare and contrast the use of unemployment and employment as buffer stocks in this context.
• To more fully explore the concept of a Job Guarantee (employment buffer stock) approach to macroeconomic management.

[THIS JUST REPEATS THE INTRODUCTION FROM LAST WEEK TO SET THE CHAPTER MAP OUT - TODAY WE MOVE ON TO DISCUSS THE CONCEPT OF FULL EMPLOYMENT - LIKE ALL BOOK DRAFTING EXERCISES THE ORDER OF ARGUMENT EVOLVES AS ONE SETS ABOUT MAKING IT. IN THIS CASE, WE ALSO HAVE TO WORRY ABOUT PEDAGOGY AND THAT ADDS ANOTHER DIMENSION - SO THINGS MIGHT BE A LITTLE DIFFERENT ONCE THE FINAL DRAFT IS SET]

11.5 Involuntary unemployment

Bill Mitchell — billy blog
Keynes and the Classics – Part 1
Bill Mitchell