Reinventing Functional Finance: Transformational Growth and Full Employment - Hardcover

Edward J. Nell; Mathew Forstater

Hardcover

ISBN 10: 1843761114 ISBN 13: 9781843761112

Publisher: Edward Elgar Publishing, 2003

Synopsis

This ambitious book seeks both to revive and revise the idea of ‘functional finance’. Followers of this doctrine believe that government budgets should concentrate solely on the macroeconomic impact on the economy, rather than reflecting a concern for sound finance and budgetary discipline.

Reinventing Functional Finance examines the origins of this idea, and then considers it in a modern context. The authors explore the concept of NAIRU and argue that modern economies can operate at the level of full employment without provoking unmanageable inflation. They also contend that budget deficits do not have the deleterious effects commonly ascribed to them; the belief that they do rests on a misunderstanding of modern money. In this context, they highlight the relevance of Abba Lerner’s famous dictum, ‘money is a creature of the State’. The authors also debate the merits of various proposals for ‘Employer of Last Resort’ programs, which combine automatic stabilizers with the buffer stock principle.

The book boasts an array of eminent contributors which include, among others, James Duesenberry, Robert Eisner, Robert Heilbroner, Richard Musgrave, Edward Nell and Randall Wray.

Financial economists, politicians, policymakers and bankers will welcome this provocative and refreshing book which challenges established economic thinking.

About this title

About the Author:

Edward J. Nell, Malcolm B. Smith Professor of Economics, Graduate Faculty, New School University and Mathew Forstater, Director, Center for Full Employment and Price Stability, University of Missouri - Kansas City

Contributors include:
P.G. Berglund,
D. Colander,
J.S. Duesenberry,
R. Eisner,
M. Forstater,
R. Heilbroner,
P. Mehrling,
B. Mitchell,
R.A. Musgrave,
E.J. Nell,
I.H. Rima,
J. Smithin,
H.-M. Trautwein,
L. Turgeon,
L.R. Wray

Review:

`This book serves as a good introduction to the neglected approach to macroeconomic theory and policy developed by Abba Lerner and his followers. Graduate students will find it particularly useful, but most of the essays could be read by undergraduates in appropriate courses, and anyone interested in macroeconomics will find them profitable reading.' -- Christopher J. Niggle, Review of Political Economy `Grounded on the fundamental analysis of the state nature of money and the role of government in the modern capitalist economy, Reinventing Functional Finance is without any doubt a great book through which solutions to various economic problems can be sought.' -- Yan Liang, Oeconomicus `Nell and Forstater have put together a set of thought-provoking papers that examine Lerner's functional finance theory, linking it to transformational growth, full employment, price stability, labour market dynamics, as well as fiscal and monetary policies . . . Reinventing Functional Finance is a must read for all scholars interested in public finance and full employment policy. Policymakers (and their economic advisers) are encouraged to read it and to consider going back to the basic insights that Abba Lerner and others brought to light six decades ago. This is an insightful, fresh, and well-overdue look at functional finance and its policy implications. The challenging task ahead is to take the principles of functional finance back to the policy arena.' -- Fadhel Kaboub, International Labor Review

About this edition

• Publisher: Edward Elgar Publishing
• Publication date: 2003
• ISBN 10: 1843761114
• ISBN 13: 9781843761112
• Binding: Hardcover
• Number of pages: 368