IDEAS home Printed from https://ideas.repec.org/a/ids/ijpubp/v7y2011i1-2-3p70-82.html
   My bibliography  Save this article

The institutional dimension of new economic policy

Author

Listed:
  • Jesus Ferreiro
  • Felipe Serrano

Abstract

In the mainstream economics, the postulate of rational expectations downgrades the relevance of macroeconomic policy and institutions. In a world of full information and rational expectations, aggregate demand is irrelevant in anything other than a strictly short-run context, and the only institutions that matter (apart from competitive markets) are those that bind the state to consistent (and therefore predictable) policy interventions. However once the existence of fundamental uncertainty is recognised, both the importance of aggregate demand and the role of institutions in the economy are radically revised. Institutions must be required and designed to reach a full employment level of economic activity. A well-designed institutional framework is a necessary condition to warrant the existence of that outcome and to help to implement macroeconomic policies that allow to reaching and maintaining this objective.

Suggested Citation

  • Jesus Ferreiro & Felipe Serrano, 2011. "The institutional dimension of new economic policy," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 7(1/2/3), pages 70-82.
    • Handle: RePEc:ids:ijpubp:v:7:y:2011:i:1/2/3:p:70-82
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=39576
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carlos Carrasco & Jesus Ferreiro, 2013. "Inflation targeting in Mexico," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 35(3), pages 341-372.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijpubp:v:7:y:2011:i:1/2/3:p:70-82. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=97 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.