*Paper written for presentation at the “International Conference on Management and Economic Policy for Development”, Kozminski University, Warsaw, 10-11 October 2013.
In the last three years the IMF has revised upwards the size of fiscal multipliers. This has devastating implications: if the fiscal multiplier is greater than the inverse of the Public Debt/GDP ratio, fiscal consolidation necessarily raises instead of lowering the Public Debt/GDP ratio with respect to what it would have been without consolidation. This appears to be the case for all or nearly all of advanced countries.
By the 1970s conservatives and corporate interests enacted a series of economic changes that reduced the bargaining power of workers, and the link between productivity growth and wages was broken.
Western multinationals are behind disasters like the Bangladesh factory collapse. Will public outrage and a new labor agreement lead to improvements for workers?