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An investment and equality-led sustainable development strategy for Europe

An investment and equality-led sustainable development strategy for Europe

Onaran, Özlem ORCID: 0000-0002-6345-9922, Andersen, Lars, Cozzi, Giovanni, Dahl, Signe, Nissen, Thea, Obst, Thomas and Tori, Daniele (2017) An investment and equality-led sustainable development strategy for Europe. [Working Paper]

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Abstract

Austerity policies coupled with rising inequality in Europe have resulted in a prolonged stagnation and a vicious circle of chronically low demand, slow down in investment and productivity, and economic, social and political instability. In order to end this vicious cycle, Europe needs directed public investment policies accompanied by industrial policy, higher equality, stimulated demand, and regulation of finance and corporate governance. Our research presents strong empirical evidence that expansionary fiscal policy is sustainable when wage and public investment policies are combined with progressive tax policy; the impact is stronger when these policies are implemented in a coordinated fashion across Europe due to strong positive spill over effects on demand. A strong investment performance also requires a process of de-financialization of the economy and a new approach to corporate governance.

Item Type: Working Paper
Uncontrolled Keywords: Public spending; Tax policy; Wage share; Growth; Financialization; Investment; Non-financial sector; Financial development; Social infrastructure; Physical infrastructure; Sustainable development; Europe
Subjects: H Social Sciences > HG Finance
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Greenwich Political Economy Research Centre (GPERC)
Last Modified: 04 Apr 2017 10:14
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/16212

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