9058009876

CHAPTF.R ITT

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86230

CHAPTRR ITT

KEY-8T0NE8 FOR AN ALTRRNAT TVR APPROACH TO THE PRESENT CRTSTS

1 • _H£Eto_.BEo.3H£i:iXi

T1»e has coie to st.ate In the sleplest. posslble way the hasło rat.lonale of t.he prohlaes we are-fadng. Tnorder to do 1t. wlt.hout. aeh 1 gu 1 1.1 as , we shall support onr consłdorstłons wlt.h oxt.reioly slwple RlgehralcforBiilas.¹

The natlonal produot., Q, asy be seen as t.he prodnct. of t.he average lahour prodnct. 1 v1 ty . v (hoa anich a worker prodnce* on average per unit of t.lee) M»es t.he nuiber of ewployed workers, N:

Q - v N

Cali N* the nniher . of workers correspondlng to fuli eiap 1 oyaent.;

Q* - v N*

won ld t.hus be the waxlBUM po ss łbie outpiit of o nr soc1 ety.

We have    uneaployaent. , present. ly,    1 n onr sodet.les.

Therefore we have an out.put whlch 1 s less t.han the iaxłaui poss1hle one:

Q*vN<Q*-vN*

The fiindaaent.nl reason whlch la alleged for t.his, and t.bat pushed the governaent.fi to adopt. t.he present. ly preva1l1ng poi kies, ł n t.hat. snnh polldes 1aprove the coape t. i 1.1 venes s of the connt.rles whlch adopt. t.hen, ralse t.helr    average

product1vłt.y, and therefore t.helr natlonal prodnct.. Tt. Is adailt.t.ed t.hat. t.he cholce of a cowpet. 1t.1ve pat.h could prodnce uneaployaent. In t.he short. run; but t.his łs regarded t.o prodnce morę ewploywent. * 1n t.he longer run, sińce 11. 1s held that. t.he gałns In coaipet 11.1 veness will enlarge t.he natlonal shares In the International world t.rade.

We can t.hlnk of the p r o h 1 e ■ as łf one could select. aiong t.wo different. strategie*. Strat.egy 1 (SI) won Id ensure fuli eaployaent. , whlle strat.egy 2 (S2) would not. be able t.o obt.afn t.his resnlt, hut. 1t. would prodnce, however , an average prodnct. 1 v1 ty, v2 , high er t.han t.hat. of strat.egy 1, v1 ; high er enough -1t. wust be added- t.o ensure t.hat. the Inat.lonal prodnct. assoclat.ed wlt.h such strat.egy, Q2, could be larger t.han t.he natlonal prodnct. assoclat.ed wlt.h strat.egy 1, Q1 , despft.e the lack of fuli ewp 1 oywen t.‘:

Q2 * v2 N2 > Q1 - v1 N*

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