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From theory to practice in macroeconomic models: post-Keynesian eclecticism

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  • Ignazio Visco

    () (Banca d'Italia, Roma (Italy))

Abstract

The paper analyses retrospectively the impact that the publication of The economists' "Manifesto" on unemployment in the EU has exerted on the European economic policies. On the supply side, it is acknowledged that many suggestions have been put in practise: among them, the labour market reforms that introduced more flexibility in labour contracts, raising employment and reducing the unemployment rates in all European countries. On the contrary, the suggestions on the demand management policies were less followed. In fact, all countries pursued tight fiscal policies due to the Maastricht parameters, and the BCE adopted a tight monetary policies that appreciated the euro exchange rate. Also disappointing are the regional development policies. At this regard, the paper suggests to use fiscal incentives to capture foreign direct investments to promote an accelerated growth in the European backward regions.

Suggested Citation

  • Ignazio Visco, 2005. "From theory to practice in macroeconomic models: post-Keynesian eclecticism," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 67-90.
  • Handle: RePEc:psl:bnlaqr:2005:27
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    More about this item

    Keywords

    Macroeconomic Model; Macroeconomics; Post Keynesian; Supply;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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