Abstract

CRUZ HIDALGO, Esteban  and  MARIO, Agustín. Rethinking external constraint in times of pandemic: The employer of last resort policy for Latin America. Cuad. Econ. [online]. 2021, vol.40, n.spe85, pp.999-1012.  Epub Oct 03, 2022. ISSN 0121-4772.  https://doi.org/10.15446/cuad.econ.v40n85.90780.

The aim of this paper is to rethink the development strategy of the periphery proposing a change of perspective: instead of seeking to obtain foreign trade to grow and, thus, generate employment, an automatic stabiliser based on a reserve of employees is endorsed, what we call the employer of last resort policy, as the axis for a stable and autonomous development strategy. While the periphery may have limited import capacity, governments choose between full employment and unemployment. Until now, the idea has prevailed that maintaining a part of the population unemployed is, for some strange reason, preferable.

Keywords : Economic development; external constraint; fiscal policy; full employment; employer of last resort.

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