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dc.contributor.authorTcherneva, Pavlina R.en_US
dc.description.abstractThis paper argues that John Maynard Keynes had a targeted (as contrasted with aggregate) demand approach to full employment. Modern policies, which aim to close the demand gap,” are inconsistent with the Keynesian approach on both theoretical and methodological grounds. Aggregate demand tends to increase inflation and erode income distribution near full employment, which is why true full employment is not possible via traditional pro-growth, pro-investment aggregate demand stimuli. This was well understood by Keynes, who preferred targeted job creation during expansions. But even in recessions, he did not campaign for wide-ranging aggregate demand stimuli; this is because different policies have different employment creation effects, which for Keynes was the primary measure of their effectiveness. There is considerable evidence to argue that Keynes had an on the spot” approach to full employment, where the problem of unemployment is solved via direct job creation, irrespective of the phase of the business cycle.en_US
dc.publisher|aLevy Economics Institute of Bard College |cAnnandale-on-Hudson, NYen_US
dc.relation.ispartofseries|aWorking papers // The Levy Economics Institute |x542en_US
dc.subject.keywordJohn Maynard Keynesen_US
dc.subject.keywordpublic worksen_US
dc.subject.keywordfiscal policyen_US
dc.subject.keywordfull employmenten_US
dc.subject.keywordaggregate demanden_US
dc.subject.keywordtargeted demanden_US
dc.subject.keyworddemand gap analysisen_US
dc.titleKeynes's approach to full employment: aggregate or targeted demand?en_US
dc.type|aWorking Paperen_US

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