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Changing Perspectives in the Theory of Economic Policy

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  • Panagiotis Korliras
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    Abstract

    The evolution of the theory of economic policy during the second half of the XX century is analysed. Three periods of its development are outlined. The first is immediately after the World War II and is called "the age of optimism" - age of belief in the advantages of state interference in the economy and growing roles and functions of governments. The second (1960s - 1970s) is the "age of doubt" -years of serious reflection on the potentials of the economic policy based on the latest development of macroeconomics and the diminishing role of the state in the economy. The third stage, which covers the last twenty years of the XX century, is studied in detail. A new trend in the theory of economic policy has emerged, which is related to the development of the New political economy.

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    Bibliographic Info

    Article provided by Bulgarian Academy of Sciences - Economic Research Institute in its journal Economic Thought.

    Volume (Year): (2005)
    Issue (Month): 5 ()
    Pages: 24-36

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    Handle: RePEc:bas:econth:y:2005:i:5:p:24-36

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    1. Thomas J. Sargent & Neil Wallace, 1974. "Rational expectations and the theory of economic policy," Working Papers 29, Federal Reserve Bank of Minneapolis.
    2. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
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