Peter Cooper — Quantity Dynamics with a Job Guarantee

A job guarantee would be a standing offer of a publicly funded job. Spending on the program would adjust automatically and countercyclically in response to take-up of positions. The likely feedback between spending on the program and activity in general is interesting and can be considered within the income-expenditure framework. In what follows, the standard model is modified to find the steady state levels and compositions of income and employment and other key variables. Attention then turns to how the system might behave outside a steady state. A way of conceptualizing the dynamics of the system is suggested and formulas developed to describe that behavior. The suggested dynamics are shown to be consistent with steady state requirements.

The material is a little on the technical side for a blog. In future I hope to do some short and simple posts on the topic, but it seemed helpful to establish a reference point first. For convenience, a list of notation is provided at the end. The images can be opened in a different tab or window by right-clicking on them. If text size is an issue, holding down the control button while pressing plus or minus can adjust the size.….

This is more an article than a blog post — with (gasp) equations. Fortunately, it's the weekend. 😃

heteconomist
Quantity Dynamics with a Job Guarantee
Peter Cooper

If you didn't catch the previous post (29 Oct), here it is

Job Guarantee as Nominal Price Anchor