Journal Article

The logic and limits of désinflation compétitive

F Lordon

in Oxford Review of Economic Policy

Published on behalf of The Oxford Review of Economic Policy Ltd

Volume 14, issue 1, pages 96-113
Published in print March 1998 | ISSN: 0266-903X
Published online March 1998 | e-ISSN: 1460-2121 | DOI: http://dx.doi.org/10.1093/oxrep/14.1.96
The logic and limits of désinflation compétitive

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  • Economic Development and Growth
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How could it be that, starting with a Keynesian-Marxian economic programme, the Socialists decided in 1983, 2 years after coming to power in France, to adopt a diametrically opposed economic policy? The désinflation compéitive, which has been maintained for 15 years, comprises an almost classic conservative policy, substituting nominal stability, wage restraint, and public finance discipline for increased consumption, nationalizations, and devaluations. This major shift, in fact, corresponds to the acknowlegement by the Socialists of the new rules of opened and internationalized economies. The déinflation compétitive was certainly necessary in the early 1980s to correct severe imbalances. However, it appeared more and more irrelevant and counterproductive as inflation disappeared and unemployment kept on rising. The failure of the déinflation compétitive either to bring about disinflation, other than through brutal market adjustments, or to stop the rise in unemployment, reveals the inability of the French Socialists to build up genuine social-democratic institutions and policies.

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Subjects: Economic Development and Growth ; Public Economics ; Political Economy ; Public Policy

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