The Role of Governments in Aligning Functional Income Distribution with Full Employment. Issue 3 (3rd July 2017)

• Record Type: Journal Article
• Authors: Spithoven, Antoon
• Is Part Of: Journal of economic issues. Volume 51:Issue 3(2017)
• Page Start: 688
• Page End: 697
• Publication Date: 2017-07-03
• Subjects: economic policies -- Keynesian economics -- United States; E6 -- E12 -- N12; Economics -- Periodicals; Economics; Économie politique -- Périodiques; Economie; ECONOMICS; ECONOMIC POLICY; Periodicals; 330.05
• DOI: 10.1080/00213624.2017.1359035
• Languages: English
• ISSNs: 0021-3624

Abstract

Abstract: Demand is an incentive for investment. The latter is necessary to create employment. If demand lags behind supply, then unemployment and underemployment rise. Persistent unemployment and underemployment indicate a dysfunctional price mechanism. Then, only governments can stimulate demand. They may equalize ex ante saving and investment by public investment, income redistribution, or market regulation.