The Problem of Social Deflation

The crisis has structural roots. The potential aggregate demand deficiency actually preceded the financial crisis - the crisis simply made it apparent. This lack of demand was due to structural changes in income distribution. Since 1980, the median wage in most advanced countries has stagnated and i...

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Bibliographic Details
Published in:	Aftershocks pp. 74 - 81
Main Author:	Fitoussi, Jean-Paul
Format:	Book Chapter
Language:	English
Published:	Amsterdam University Press 10-11-2009
Subjects:	Applied economics Econometrics Economic competition Economic conditions Economic crises Economic deflation Economic disciplines Economic indicators Economic policy Economics Economics and Finance Employment Financial economics Financial market structures Governance Government Government budgets Government crises Humanities and Social Sciences Income distribution Income inequality International economics Labor economics Macroeconomics Monetary policy National politics Political science Politics Price fluctuations Price levels Public debt Scope of employment Socioeconomics Unemployment
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Summary:	The crisis has structural roots. The potential aggregate demand deficiency actually preceded the financial crisis - the crisis simply made it apparent. This lack of demand was due to structural changes in income distribution. Since 1980, the median wage in most advanced countries has stagnated and in some cases even declined. Inequalities have grown as, at the same time, high levels of unemployment were tolerated, above all in Europe. This situation has no historical equivalent in times of peace. These trends have a variety of causes, including asymmetric globalisation (with greater liberalisation of capital than of labour markets), deficiencies in
ISBN:	9089641920 9789089641922