Prices and Quantities

Arthur M Okun

doi:10.5771/9780815718727

Summary

During the past decade Arthur M. Okun, like many economists, focused attention on finding ways to fight inflation without sacrificing goals of high employment and prosperity. In recent years the economy has been plagued by stagflationthe simultaneous persistence of high inflation and high unemployment. Traditional methods of aggregate demand management that have been reasonably successful in curing either one or the other of these problems have not been effective, and the nation has not been able to contain inflation even in periods of economic slack. It now seems clear that the economists’ traditional model that presumes short-run flexibility in wages and prices no longer holds for most of the industrial world, and hence the response of inflation to shifts in macroeconomic policy is weak. In this volume Okun seeks to explain that loss of responsiveness by analyzing how modern labor and product markets work and how they are structured. A central feature of Okun’s analysis is implicit contract theory, which recognizes that efficiency-maximizing decisions by business firms reflect long-term considerations as well as short-term changes in markets. His interpretation of microeconomic behavior and macroeconomic performance provides a basis for the design of policies to deal with stagflation.

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Bibliographic data

Copyright year: 2011
ISBN-Print: 978-0-8157-6479-3
ISBN-Online: 978-0-8157-1872-7
Publisher: Rowman & Littlefield, Lanham
Language: English
Pages: 367
Product type: Book Titles

1. Contents No access
2. Tables No access
3. Figures No access
1. The State of Macroeconomics No access
2. The Heritage of Classical and Keynesian Theory No access
3. Plan of the Book No access
4. Bibliographical Notes No access
1. Simple Search Model No access
2. Enriched Search Model No access
3. "Toll" Model No access
4. Interpreting the Toll No access
5. Bibliographical Notes No access
1. The Personnel Strategy No access
2. Influences and Standards in Wage Setting No access
3. Implications of Various Wage Influences No access
4. Adjustments to Cyclical Changes No access
5. Cyclical Variations in the Wage Path No access
6. The Role of Unions No access
7. Bibliographical Notes No access
1. Auction Markets No access
2. Customer Markets No access
3. The Nature of the Cost Standard No access
4. Pricing, Information, and Competition No access
5. Bibliographical Notes No access
1. Money in a Price-Tag Economy No access
2. Financial Institutions No access
3. Real Assets No access
4. The Fisher Theorem No access
5. Inflation in a Monetary Economy No access
6. Bibliographical Notes No access
1. Features of the System No access
2. A Comparison with Other Views of Price-Quantity Adjustments No access
3. A Simplified Algebraic Representation No access
4. Appendix No access
5. Bibliographical Notes No access
1. Optimum Output and the Trade-off No access
2. Social Costs of Recession and Slack No access
3. Social Costs of Inflation No access
4. Indexing: Cure or Disease? No access
1. Strategic Issues of Demand Management No access
2. Cost-Reducing Policy Instruments No access
3. An Efficient Macroeconomic Strategy No access