Selective Use of Discretionary Public Employment and Economic Flexibility

Levy Economics Institute Working Paper No. 218

28 Pages Posted: 5 Jun 1998

See all articles by Mathew Forstater

Mathew Forstater

Bard College - The Levy Economics Institute

Date Written: 1997

Abstract

Full employment is normally associated with structural rigidities that may result in production bottlenecks and inflationary pressures. Flexibility or elasticity of the production system is therefore a desirable feature of an economic system. Many standard models, however, exhibit flexibility because of the use of unacceptably unrealistic assumptions. While unemployment and excess capacity are important real-life factors that endow economic systems with flexibility, the flexibility gained in this manner comes at a high social and economic cost. This paper explores these issues and proposes the selective use of discretionary public employment as a means of promoting higher levels of employment--and even full employment--without creating structural rigidities, resulting in negative environmental consequences, or causing undesirable geographic dislocation of workers.

JEL Classification: E62

Suggested Citation

Forstater, Mathew, Selective Use of Discretionary Public Employment and Economic Flexibility (1997). Levy Economics Institute Working Paper No. 218, Available at SSRN: https://ssrn.com/abstract=95968 or http://dx.doi.org/10.2139/ssrn.95968

Mathew Forstater (Contact Author)

Bard College - The Levy Economics Institute ( email )

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United States
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