CAN MACROECONOMIC POLICIES RAISE EMPLOYMENT

Differences in the stance of demand management policies, the authors a rgue, may have played a small role in explaining medium-term variation s in GDP growth rates, and hence in differential employment performanc e, among the industrialized countries since 1973. They examine how a s pecific tool of macroeconomic policy - tax-financed increases in publi c expenditure on goods and services - could be used for employment cre ation. For this proposal to work, society would have to be ready to be ar some (small) increase in taxes in exchange for the benefits of lowe r unemployment and better public services and infrastructure.