Aggregate Demand and Employment
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Aggregate Demand and Employment

International Perspectives

Edited by Brian K. MacLean, Hassan Bougrine and Louis-Philippe Rochon

With an emphasis on developments during and after the Great Recession, and paying due attention to the impacts of austerity policies, the chapters assembled for this book explain that high growth of aggregate demand is as essential as ever for achieving full employment and rising living standards. Written by distinguished Keynesian and Post-Keynesian economists from diverse national backgrounds, the book tackles critical theoretical and empirical issues to illuminate the economic experiences both of large geographic regions such as Europe, Latin America, and Africa, as well as specific national economies including the USA, Japan, India, and Canada.
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Chapter 2: Dualism and economic stagnation: can a policy of guaranteed basic income return mature market economies to les Trente glorieuses?

Mario Seccareccia

Abstract

The starting point of this chapter is an analysis of the original 19th-century classical dualistic structure of emerging industrial economies associated with a decoupling between real wage and productivity growth. This is followed by a description of how this gap disappeared during the Golden Age period of les Trente glorieuses and then re-emerged after the 1970s. This is done with the purpose of providing a framework for discussing some of the literature on guaranteed income programmes as promoted by both mainstream and heterodox economists. As is well known, proposals in favour of guaranteed income have become fashionable in recent times to address this growing income polarisation that has become endemic in mature industrial economies, and this chapter offers a critique of these proposals from a Polanyian perspective. While supporting the principle of a universal basic income as a means to establish a social subsistence floor, it is argued that a guaranteed income policy without also a societal commitment to full employment may trigger mechanisms that could actually strengthen labour market decoupling.

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