IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/0862.html
   My bibliography  Save this paper

Stabilization Policies in the World Economy: Scope and Skepticism

Author

Listed:
  • Jeffrey Sachs

Abstract

Throughout the industrialized world, macroeconomic performance since the mid-1970s has been very poor, and the prospects in the near term remain bleak. While there is no consensus among macroeconomists regarding the diagnosis (or cure) of these ills, the major competing schools of thought have focused most of their blame on macroeconomic policy. This paper summarizes a series of studies, in collaboration with Michael Bruno, suggesting rather that supply shocks coupled with real wage rigidities are a central source of the poor macroeconomic performance. Various hypotheses are mentioned as a source for the resistance to real wage cuts, and some illustrations of the policy implications of supply shocks are provided.

Suggested Citation

  • Jeffrey Sachs, 1982. "Stabilization Policies in the World Economy: Scope and Skepticism," NBER Working Papers 0862, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:0862
    Note: ITI IFM
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w0862.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. D. Grubb & R. Jackman & R. Layard, 1982. "Causes of the Current Stagflation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(5), pages 707-730.
    2. Grossman, Sanford J & Hart, Oliver D, 1981. "Implicit Contracts, Moral Hazard, and Unemployment," American Economic Review, American Economic Association, vol. 71(2), pages 301-307, May.
    3. Martin Neil Baily, 1981. "Productivity and the Services of Capital and Labor," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(1), pages 1-66.
    4. Morley, R, 1979. "Profit, Relative Prices and Unemployment," Economic Journal, Royal Economic Society, vol. 89(355), pages 582-600, September.
    5. Irving B. Kravis & Robert E. Lipsey, 1984. "Prices and Terms of Trade for Developed Country Exports of Manufactured Goods," International Economic Association Series, in: Béla Csikós-Nagy & Douglas Hague & Graham Hall (ed.), The Economics of Relative Prices, chapter 18, pages 415-453, Palgrave Macmillan.
    6. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
    7. Phelps, Edmund S, 1978. "Commodity-Supply Shock and Full-Employment Monetary Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 10(2), pages 206-221, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rosen, Sherwin, 1985. "Implicit Contracts: A Survey," Journal of Economic Literature, American Economic Association, vol. 23(3), pages 1144-1175, September.
    2. Alan S. Blinder & Jeremy B. Rudd, 2013. "The Supply-Shock Explanation of the Great Stagflation Revisited," NBER Chapters, in: The Great Inflation: The Rebirth of Modern Central Banking, pages 119-175, National Bureau of Economic Research, Inc.
    3. repec:eee:labchp:v:2:y:1986:i:c:p:1039-1089 is not listed on IDEAS
    4. Henry S. Farber, 1984. "The Analysis of Union Behavior," NBER Working Papers 1502, National Bureau of Economic Research, Inc.
    5. Mulder, C B, 1993. "Wage-Moderating Effects of Corporatism: Decentralized versus Centralized Wage Setting in a Union, Firm, Government Context," The Manchester School of Economic & Social Studies, University of Manchester, vol. 61(3), pages 287-301, September.
    6. H. Schneider, 1983. "Mitbestimmung, unvollständige Information und Leistungsanreize: Überlegungen zu einer funktionsfähigen Unternehmensverfassung," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 119(III), pages 337-355, September.
    7. MacLeod, W. Bentley, 2011. "Great Expectations: Law, Employment Contracts, and Labor Market Performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 18, pages 1591-1696, Elsevier.
    8. Alan S. Blinder & Jeremy B. Rudd, 2013. "The Supply-Shock Explanation of the Great Stagflation Revisited," NBER Chapters, in: The Great Inflation: The Rebirth of Modern Central Banking, pages 119-175, National Bureau of Economic Research, Inc.
    9. Louis N. Christofides & Andrew J. Oswald, 1991. "Efficient and Inefficient Employment Outcomes: A Study Based on Canadian Data," NBER Working Papers 3648, National Bureau of Economic Research, Inc.
    10. Hogan, Chad, 2001. "Enforcement of Implicit Employment Contracts through Unionization," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 171-195, January.
    11. repec:pri:cepsud:176blinder is not listed on IDEAS
    12. Sampson, Anthony A, 1994. "Implicit Contracts, Trade Unions and Involuntary Unemployment," Bulletin of Economic Research, Wiley Blackwell, vol. 46(1), pages 23-39, January.
    13. Jeffrey Sachs, 1986. "High Unemployment in Europe: Diagnosis and Policy Implications," NBER Working Papers 1830, National Bureau of Economic Research, Inc.
    14. Polterovich, Victor, 2000. "Employment- wage decisions in the insider-owned firm," BOFIT Discussion Papers 1/2000, Bank of Finland, Institute for Economies in Transition.
    15. Jonathan Temple, 2002. "The Assessment: The New Economy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 18(3), pages 241-264.
    16. Fanti, Luciano & Gori, Luca, 2013. "Efficient bargaining versus right to manage: A stability analysis in a Cournot duopoly with trade unions," Economic Modelling, Elsevier, vol. 30(C), pages 205-211.
    17. Kee, Hiau Looi & Hoon, Hian Teck, 2005. "Trade, capital accumulation and structural unemployment: an empirical study of the Singapore economy," Journal of Development Economics, Elsevier, vol. 77(1), pages 125-152, June.
    18. Tobias Brändle & Laszlo Goerke, 2018. "The one constant: a causal effect of collective bargaining on employment growth? Evidence from German linked‐employer‐employee data," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(5), pages 445-478, November.
    19. Eichengreen, Barry & Hatton, Tim, 1988. "Interwar Unemployment in International Perspective," Institute for Research on Labor and Employment, Working Paper Series qt7bw188gk, Institute of Industrial Relations, UC Berkeley.
    20. Swati Basu & Saul Estrin & Jan Svejnar, 2005. "Employment Determination in Enterprises under Communism and in Transition: Evidence from Central Europe," ILR Review, Cornell University, ILR School, vol. 58(3), pages 353-369, April.
    21. Oswald, Andrew J, 1982. "Optimal Intervention in an Economy with Trade Unions," The Warwick Economics Research Paper Series (TWERPS) 221, University of Warwick, Department of Economics.
    22. Luca Gori & Luciano Fanti, 2009. "Right-to-manage unions endogenous growth and welfare," Economics Bulletin, AccessEcon, vol. 29(2), pages 903-917.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0862. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.