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Keynesian Macroeconomic Policy: Theoretical Analysis and Empirical Evidence

Accepted version
Peer-reviewed

Type

Article

Change log

Authors

Filho, Fernando Ferrari 
Terra, Fabio Henrique Bittes 

Abstract

Investment depends on subjective factors, such as expectations, conventions, and confident animal spirits. In a context of economic instability and crises, economic policy is the main source to support entrepreneurs’ expectations and investment. In this sense, macroeconomic policies are capable of affecting effective demand and building a good institutional environment, which is essential to keep the entrepreneurs’ expectations confident and promote their animal spirits. Given these propositions, this contribution has two objectives: the first is to develop a Keynesian type of macroeconomic policy able to stimulate investment and effective demand, and, as a result, mitigate unemployment. The idea is to offer alternative macroeconomic policy prescriptions in relation to the New Consensus Macroeconomics one. This proposal aims to establish the role, according to the Post Keynesian view, the logic of operation of each policy, and the proper coordination among them of these Keynesian macroeconomic policies. The second objective is to present, briefly, relevant empirical evidence of this Post Keynesian macroeconomic policies.

Description

Keywords

Keynes, Economic Policy, Fiscal Policy, Monetary Policy, Exchange Rate Policy

Journal Title

Panoeconomicus

Conference Name

Journal ISSN

1452-595X
2217-2386

Volume Title

Publisher

Economists' Association of Vojvodina