Minsky's Approach to Employment Policy and Poverty: Employer of Last Resort and the War on Poverty

Levy Economics Institute Working Paper Series No. 515

19 Pages Posted: 13 Sep 2007

See all articles by L. Randall Wray

L. Randall Wray

University of Missouri at Kansas City; Bard College - The Levy Economics Institute

Date Written: September 12, 2007

Abstract

While Hyman P. Minsky is best known for his work on financial instability, he was also intimately involved in the postwar debates about fiscal policy and what would become the War on Poverty. Indeed, at the University of California, Berkeley, he was a vehement critic of the policies of the Kennedy and Johnson administrations, and played a major role in developing an alternative. Minsky insisted that the high investment path chosen by postwar fine-tuners would generate macroeconomic instability, and that the War on Poverty would never lower poverty rates significantly. In retrospect, he was correct on both accounts. Further, he proposed high consumption and an employer of last resort policy as essential ingredients of any coherent strategy for achieving macro stability and poverty elimination. This paper summarizes Minsky's work in this area, focusing on his writings from the early 1960s through the early 1970s in order to explore the path not taken.

Keywords: Hyman Minsky, Employment and Poverty, Employer of Last Resort, War on Poverty, Regional and Sectoral Disparities, Financial Instability

JEL Classification: E24, E61, J68, R11

Suggested Citation

Wray, L. Randall, Minsky's Approach to Employment Policy and Poverty: Employer of Last Resort and the War on Poverty (September 12, 2007). Levy Economics Institute Working Paper Series No. 515, Available at SSRN: https://ssrn.com/abstract=1014163 or http://dx.doi.org/10.2139/ssrn.1014163

L. Randall Wray (Contact Author)

University of Missouri at Kansas City ( email )

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

Bard College - The Levy Economics Institute

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

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