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Malcolm Sawyer

The construction of the Economic and Monetary Union and its fiscal policy agenda have not been conducive for the attainment of full employment, ‘Fiscal discipline’ has been a major pillar of the structure of EMU since before its formation through the role of budget deficits and debt ratios in the convergence criteria of the Maastricht Treaty, then in the Stability and Growth Pact (SGP), and reinforced by the fiscal compact. As such, the objectives of the fiscal policies of the euro area appear only concerned with budget deficits and debt and not with economic performance including high levels of employment. Many of the countries of the euro area have been plagued by unemployment for a long time, and the favoured ‘structural reforms’ of labour markets to address high levels of unemployment have not worked. The SGP and fiscal compact seek to enforce a ‘one size fits all’ policy arrangement across all countries. These policy arrangements make no allowance for the differing needs across countries for public expenditure and investment. The central assumption of the fiscal compact relates to the feasibility of a balanced structural budget, despite the historical record that such a position is rarely achieved. Seeking to impose such a requirement on all countries without regard to their current account and savings/investment positions ensures that there will be a climate of austerity. The ‘excessive deficit procedures’ put further austerity measures in place. The fiscal compact seeks to prevent political parties campaigning on a fiscal expansion as such a policy would break the terms of the compact.

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Malcolm Sawyer

Sawyer focuses on the fiscal responsibilities of governments and the nature of the objectives to be achieved through fiscal policies, examines the nature of the government budget position (deficit or surplus), and considers the difficulties and constraints of using budget position to achieve full employment. However, government spending has to be financed in the sense of the agency undertaking the expenditure being in prior possession of purchasing power.

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Malcolm Sawyer

Financialisation has accompanied the expansion of the capitalist economies for well over one and a half centuries. It has, though, taken different forms, proceeded at different speeds and had different geographical spreads. The paper elaborates on the nature of financialisation and the spread and growth of the financial sector in the past four decades in what is termed financialisation in the present era. The focus here is on developments in Western industrialised economies although noting that financialisation in the present era has been global. There is a review of the relationships between the expansion of the financial sector and economic growth with the general thrust that such expansion has been associated with a slowing of growth. This leads into a more general consideration of whether the financial sector has become a dysfunctional burden for the capitalist economy.

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Malcolm Sawyer

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Malcolm Sawyer

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Malcolm Sawyer

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Malcolm Sawyer

The terminology of demand and supply is highly misleading in the context of money and both terms have been applied in quite inappropriate ways. The attention paid to the supply-of-money curve in the horizontalist and structuralist debates has distracted from the analysis of the key elements of endogenous money, including how money is created and destroyed. Furthermore, any observed relationship between interest rates and the volume of loans and of money does not represent a supply-of-loans relationship, and a search for some general relationship between the volume of loans and the rate of interest is misplaced.

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Malcolm Sawyer

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Malcolm Sawyer

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Malcolm Sawyer

Kalecki and Keynes were both major contributors to what would now be referred to as post-Keynesian economics. Their ideas on the importance of demand for the level of economic activity and the role of investment (and others), developed at much the same time in the 1930s, have often been linked together and sometimes seen as a case of simultaneous discovery. Both Kalecki and Keynes made many important contributions to economic thinking, although it is their contributions to macroeconomic analyses where comparisons and contrasts can be fruitfully undertaken. They came from different social circumstances and from different intellectual heritages. The relationship between Kalecki and Keynes at the intellectual level is discussed, as are their ideas particularly with regard to macroeconomic analysis, and we discuss their personal-interaction level.