The slump in Europe : reconstructing open economy theory
In this examination of the economic slump in Europe in the 1980s, the author discusses the fall of labour's share, the rise of productivity and vanished excess capacity, and reviews the implications of orthodox open economy theory. A new theory consistent with recent developments is put forward.
VIII, 145 p. ; 22 cm
9780631155577, 9780631171812, 0631155570, 0631171819
911312378
Part 1 The problem for analysis: magnitude of the slump; existing explanations; new directions; plan of the book. Part 2 Stylized facts: exchange rate movements; real interest rates; user cost of capital; wage shares; mark-ups; average product of labour; investment; relative price of capital goods; (un)employment. Part 3 Orthodox theory: the standard propositions and qualifications; the essential orthodox model. Part 4 Elements of a reconstructed theory: customer markets in the transmission of foreign shocks; capital mechanisms in the transmission of real interest shocks; real investment-good prices in the transmission of shocks; the persistence of the slump in Europe - our supply-price view. Part 5 An examination of demand-side explanations: the fiscal austerity hypothesis; the tight money hypothesis; the hysteresis effect required by demand-side explanations. Part 6 Can Europe do it?.