Keywords: John Maynard Keynes, full employment, environmental protection, no economic growth, Canada, poverty elimination, sustainability, sustainable development, simulation
The Canadian economy with full employment, no growth, no poverty, and no government deficit: a Keynesian exercise
John Maynard Keynes showed us how poverty and unemployment could be eliminated in developed countries without economic growth. Given the environmental dilemma we all face, developed countries like Canada must drastically reduce their rates of growth if we are to have global sustainability and global elimination of poverty. The simulation exercise conducted in this paper reveals that a Canadian economy with macroeconomic relations not very different from those currently experienced can generate full employment with no growth, no poverty, and no government deficit. The widespread belief that a reduced rate of growth must lead to increasing poverty and unemployment is therefore mistaken.