Open AccessEgalitarian Policies and Effective Demand: Considering Balance of Payments (Note 1)
Author(s) -
Taro Abe
Publication year - 2017
Publication title -
journal of business theory and practice
Language(s) - English
Resource type - Journals
eISSN - 2372-9759
pISSN - 2329-2644
DOI - 10.22158/jbtp.v5n2p89
Subject(s) - economics , redistribution (election) , unemployment , dismissal , monetary economics , macroeconomics , political science , politics , law
This study examines the effectiveness of redistribution policies considering balance of payments. Unlike Bowles (2012) and Abe (2015, 2016), we assume that capital movement is sluggish to consider the short-run effects. Results indicate that conventional egalitarian policies such as increasing unemployment compensation and strengthening dismissal regulations can be effective, whereas an asset-based redistribution such as a decrease in the ratio of monitoring labor cannot be. These results contradict Bowles (2012). We need to reevaluate conventional egalitarian policies if the effects of effective demand and adjustment of capital continue in the long run.