Reflation and Austerity

Part 1 Understanding the economic crisis: the oil shocks - Keynesian depression and stagflation; the first oil shock; the second oil shock - recession by restrictive policies. Part 2 Reflation runs into difficulties: the economic situation in France in spring 1981; the reflation of 1981-82; a comparative analysis of the reflation of 1981-82. Part 3 Unavoidable external constraints: deterioration of external balances; analysis of the party changes; measures complementing the devaluations; devaluations are no substitute for economic austerity; foreign debt and financing the external deficit. Part 4 The fight against unemployment: shorter working hours; the creation of public sector jobs and direct aid for jobs; labour force management policy; the development of employment policy and its effect on unemployment. Part 5 The fruits of austeriry: disinflation and the return of profitability; the reduction of budget deficit; tax reduction - myths and realities; arguments for a coordinated reflation. Appendices: Keynes and classical economics - a traditional model; analyzing the effects of an oil price rise using a Keynesian model of an open economy; the budget - "economic budgets" and the plan.