"There is a solution to unemployment: if we worked the same shorter hours as Germany, we'd eliminate joblessness overnight"
Nobel Laureate Paul Krugman and Richard Layard, a distinguished British economist, took the lead last week in drafting a sign-on "Manifesto for Economic Common Sense", condemning the turn toward austerity in many countries. This manifesto seems destined to garner tens or even hundreds of thousands of signatures, including mine.
While the basic logic of the manifesto is solid, there is an important aspect to the argument that is overlooked. We can deal with unemployment every bit as effectively by having people work fewer hours, as we can by increasing demand.
See also Re: The Krugman-Layard "Manifesto for Economic Sense"