{"id":4861,"date":"2012-05-25T14:14:01","date_gmt":"2012-05-25T18:14:01","guid":{"rendered":"http:\/\/www.multiplier-effect.org\/?p=4861"},"modified":"2012-05-25T14:21:06","modified_gmt":"2012-05-25T18:21:06","slug":"no-more-fiscal-policy-bank-shots","status":"publish","type":"post","link":"https:\/\/blogs.bard.edu\/multiplier-effect\/no-more-fiscal-policy-bank-shots\/","title":{"rendered":"No More Fiscal Policy Bank Shots"},"content":{"rendered":"

A little while back the Wall Street Journal<\/em> observed<\/a> that if there were as many people employed by government today as there were in the last month of George W. Bush’s tenure, the unemployment rate would be around 7.1 percent.\u00a0 Job creation policy, in other words, can sometimes be quite simple.\u00a0 Step One:\u00a0 stop firing so many people.<\/p>\n

Reuters’ Edward Hadas picks up<\/a> Pavlina Tcherneva’s research on the reorientation of fiscal policy and points us in the direction of a Step Two:\u00a0 offer a job to anyone who wants to work but can’t find paid employment.\u00a0 Tcherneva’s research reveals that the standard way of doing fiscal stimulus,\u00a0 trying to boost economic growth with traditional pump-priming and hoping that the jobs follow, has it backwards.\u00a0 Instead of the traditional “trickle-down Keynesian” approach, Tcherneva suggests that targeting the unemployed with direct job creation policies that run throughout the business cycle would be far more efficient. Tcherneva envisions a direct job creation program that would function as a more effective automatic stabilizer, expanding in recessions and contracting in booms.<\/p>\n

She argues that this “bottom up” approach is not only closer to what Keynes actually advocated, but that it is also more likely to bring us back to full employment\u2014while being less inflationary and more equitable.\u00a0 Although expanding government payrolls for projects fulfilling various public purposes would be one way of accomplishing this, Tcherneva advocates using social enterpreneurs and the nonprofit sector to offer jobs to all those willing and able to work (with funding provided by government).<\/p>\n

From the standpoint of an ongoing debate<\/a> about counterfactuals and whether the Federal Reserve would have allowed a more aggressive fiscal stimulus to take effect, one intriguing aspect of Tcherneva’s research stems from her finding that direct employment policies tend to be less inflationary, suggesting that reorienting fiscal policy in this direction might be able to get us closer to full employment before triggering a reaction from the Fed.<\/p>\n

The article Hadas cites from the Review of Social Economy<\/em><\/a> is behind a paywall but Tcherneva’s previous working papers on this topic can be downloaded here<\/a>.\u00a0 Her newest working paper is here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

A little while back the Wall Street Journal observed that if there were as many people employed by government today as there were in the last month of George W. Bush’s tenure, the unemployment rate would be around 7.1 percent.\u00a0 Job creation policy, in other words, can sometimes be quite simple.\u00a0 Step One:\u00a0 stop firing […]<\/p>\n","protected":false},"author":202,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,49],"tags":[1128,316,1131,34,315],"class_list":["post-4861","post","type-post","status-publish","format-standard","hentry","category-employment","category-fiscal-policy","tag-employment","tag-employment-guarantee","tag-fiscal-policy","tag-keynes","tag-pavlina-tcherneva"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/4861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/users\/202"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/comments?post=4861"}],"version-history":[{"count":19,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/4861\/revisions"}],"predecessor-version":[{"id":4886,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/4861\/revisions\/4886"}],"wp:attachment":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/media?parent=4861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/categories?post=4861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/tags?post=4861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}