Macroeconomic Policy for the Real World: A Post-Keynesian Perspective

The current mainstream neoclassical economic analysis of growth in a “Western” economy holds that in anything but the relatively short run, defined as the length of a business cycle, the economy reaches an equilibrium growth rate determined entirely by supply side factors and unaffected by measures...

Full description

Saved in:
Bibliographic Details
Published in:Economic papers (Economic Society of Australia) 2015-09, Vol.34 (3), p.108-117
Main Authors: Nevile, JW, Harcourt, GC, Kriesler, Peter
Format: Article
Language:English
Subjects:
Aggregate demand
deregulation
financial crisis
Industrial policy
Macroeconomic policy
neoclassical growth theory
Policy analysis
Political reform
Post-Keynesianism
Regulatory policy
Stabilization policy
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The current mainstream neoclassical economic analysis of growth in a “Western” economy holds that in anything but the relatively short run, defined as the length of a business cycle, the economy reaches an equilibrium growth rate determined entirely by supply side factors and unaffected by measures taken to increase aggregate demand during a slump. In addition, the process of transformation to this long‐run equilibrium position is never explained. As a result of these views, the finance sector, both domestically and internationally, has obtained undue influence and behaved in a manner that caused the crisis which started in 2007. This paper considers these propositions, focussing on neoclassical growth theory. After establishing these claims, the policy implications are discussed.
ISSN:0812-0439
1759-3441
DOI:10.1111/1759-3441.12107