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Political Aspects of ‘Buffer Stock’ Employment: A Reconsideration

Author

Listed:
  • Peter Kriesler

    (School of Economics, University of New South Wales)

  • Joseph Halevi

    (International University College of Turin)

  • Mark Setterfield

    (Department of Economics, New School for Social Research)

Abstract

Advocates of Job Guarantee (JG) or Employer of Last Resort (ELR) schemes have suggested that if the state provides ‘buffer stock’ employment to workers displaced from private employment, then full employment can be maintained over the course of the business cycle. Kalecki was sceptical about the prospects for maintaining full employment in capitalist economies, without fundamental institutional change that would alleviate certain political constraints on the maintenance of full employment. We argue that in and of themselves, JG/ELR schemes do not create the fundamental institutional change required to address Kalecki’s concerns and so ensure that full employment becomes achievable as a permanent state.

Suggested Citation

  • Peter Kriesler & Joseph Halevi & Mark Setterfield, 2020. "Political Aspects of ‘Buffer Stock’ Employment: A Reconsideration," Working Papers 2009, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:2009
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    File URL: http://www.economicpolicyresearch.org/econ/2020/NSSR_WP_092020.pdf
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    References listed on IDEAS

    as
    1. James Juniper & Timothy P. Sharpe & Martin J. Watts, 2014. "Modern monetary theory: contributions and critics," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 37(2), pages 281-307, December.
    2. William F. Mitchell, 1998. "The Buffer Stock Employment Model and the NAIRU: The Path to Full Employment," Journal of Economic Issues, Taylor & Francis Journals, vol. 32(2), pages 547-555, June.
    3. Andreas Knabe & Steffen Ratzel, 2011. "Quantifying the psychological costs of unemployment: the role of permanent income," Applied Economics, Taylor & Francis Journals, vol. 43(21), pages 2751-2763.
    4. Halevi, J. & Kriesler, P., 1999. "On the Limitations of Fiscal Policy: a Radical Kalechian View," Papers 99/14, New South Wales - School of Economics.
    5. Michal Kalecki, 1971. "Class Struggle And The Distribution Of National Income," Kyklos, Wiley Blackwell, vol. 24(1), pages 1-9, February.
    6. Heinz D. Kurz & Neri Salvadori (ed.), 1998. "The Elgar Companion to Classical Economics," Books, Edward Elgar Publishing, volume 0, number 851.
    7. Marc Lavoie, 2013. "The Monetary and Fiscal Nexus of Neo-Chartalism: A Friendly Critique," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(1), pages 1-32.
    8. Enrico Sergio Levrero, 2019. "On the Criticisms of and Obstacles to the Employer of Last Resort Policy Proposal," International Journal of Political Economy, Taylor & Francis Journals, vol. 48(1), pages 41-59, January.
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    Cited by:

    1. Guglielmo Forges Davanzati, 2020. "The Italian Economic Decline and the Proposal of the State as Innovator of First Resort," Working Papers 0049, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.

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    More about this item

    Keywords

    Employer of last resort; job guarantee; buffer stock employment; political aspects of full employment;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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