Economists of a classical bent lay a large part of the decline of employment, and thus lagging output, to a contraction of labour supply.
From Edmund Phelps
An indictment of entitlements has to focus on the huge 'social wealth' that the welfare state creates at the stroke of the pen. Yet statistical tests of the effects of welfare spending on employment yield erratic results.
Workers in decent jobs view the economy as unjust if they or their children have virtually no chance of climbing to a higher rung in the socioeconomic ladder.
Disciples of Keynes, who focus on aggregate demand, view any increase in household wealth as raising employment because they say it adds to consumer demand.
Things can get only so bad. People want to eat, so at some point they resist further cuts to their consumption - it's not a bottomless pit.
The need to encourage entrepreneurship and ensure that young people have the opportunity to start new businesses is acute.
Some economists believe that the Greeks' work ethic and thrift can pull them through. But the classical virtues can do nothing to offset the dearth of innovation that plagues the economy.
A modern economy is marked by the feasibility of endogenous change: Modernization brings myriad arrangements from expanded property rights to company law and financial institutions.
In America, black urban teenagers have long been lacking in inclusion. In France, there is a comparable lack of inclusion among North Africans. In much of Europe, there has been little attempt to include the Roma.
When the word 'morality' comes up in connection with economics, income distribution and financial stability are usually the issues. Is it moral for rich countries to use such a high proportion of the world's resources or for investment bankers to earn large bonuses?
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