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TOWARDS FULL EMPLOYMENT AND PRICE STABILITY: A REVIEW OF THE OECD REPORT
Author(s) -
Cornwall* John
Publication year - 1978
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1978.tb00665.x
Subject(s) - stagflation , economics , inflation (cosmology) , price of stability , economic stability , macroeconomics , full employment , keynesian economics , economic policy , monetary policy , unemployment , physics , theoretical physics
SUMMARY The article reviews a recent OECD attempt to explain the causes of the acceleration of inflation from the mid‐1960's to the early 1970's and the impact of government policy responses i.e ., stagflation. The report is optimistic about the future growth, employment and inflation performance of the OECD economies. This optimum is criticised for several reasons. While most of the factors as causes of the acceleration in inflation are non‐economic, the chief policy measures advocated for a return to ‘normally’ are economic, i.e ., demand management. No evidence is offered that the (largely) non‐economic structural changes that contributed to the acceleration of inflation have disappeared and are therefore unlikely to reassert themselves if and when governments decide to push for full employment. The future is just as likely to be one of continued stagflation or a permanent incomes policy as it is a return to pre‐1970 conditions.