search query: @author Arestis, P. / total: 9
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| Author: | Arestis, P. Howells, P. |
| Title: | Changes in income distribution and aggregate spending: constraints on full-employment? |
| Journal: | Review of Political Economy
1995 : APR, VOL. 7:2, p. 150-163 |
| Index terms: | EMPLOYMENT LOW INCOMES UNITED KINGDOM |
| Language: | eng |
| Abstract: | During the 1980s, rising inequality in the UK resulted partly from market conditions, and partly from supply-side policies that reduced social security benefits and income supports for low-wage earners. Greater inequality, plus low levels of investment spending (relative consumption) hinder the ability of demand management raise the level of output and employment in the UK economy. Higher income earners have higher import propensities. Consquently, at any stage of the economic cycle, the trade deficit is now larger than it was before 1980. Increases in demand leak into a demand for import, further reducing the incentive to invest. The paper argues for lower interest rates to encourage investment, and a fiscal policy that redistributes income towards those with lower incomes to solve their problems. |
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