This study explains why the OECD economies have been in a high unemployment equilibrium trap for the past 15 years. An institional-analytical framework is adopted to reveal how institutions interact with the economic and political demands of organized interest groups to determine both the difference in performances between countries and the general failure of the OECD economies to recover. Stagnation is traced in the first instance to an unwillingness of countries to employ stimulative Keynesian policies because of their adverse inflation and payments side effects. Underlying this are institutional changes, largely induced by the economic successes of the 1950s and 1960s, that have greatly reduced the ability of policy makers to use aggregate demand and exchange rate policies to stabilize the economy. Further instutional changes induced by governments are required for recovery. Given the radical nature of the required changes, continued long-run stagnation seems assured.
- ISBN10 0631148817
- ISBN13 9780631148814
- Publish Date 25 January 1990
- Publish Status Out of Print
- Out of Print 15 January 1993
- Publish Country GB
- Publisher John Wiley and Sons Ltd
- Imprint Blackwell Publishers
- Format Hardcover
- Pages 256
- Language English