ABSTRACT
The goal of full employment must be distinguished from that of economic growth, which differs from full employment, as does price stability, in that it reflects a conflict of interests. Fiscal policy for full employment is implemented either by changing the disposable real incomes of households and firms, or by changing the prices of assets, usually financial assets, that households and firms hold. The shortfall in approach to the other goal, capacity utilization, remains zero, an achievement however that lacks significance in view of the growing level of unemployment. The assumption of a steady percentage increase in the labor force can be dropped, and full employment and full capacity utilization can be maintained, if only the ratio of saving-investment to national income changes correspondingly. Public finance policy measures exert part of their effects abroad, and the reactions abroad to these effects in turn affect the initially acting country's progress toward the goals of full employment, capacity output, and price stability.
