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The Role and Effectiveness of Fiscal Policy

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  • Neil Hart

Abstract

A meaningful discussion of the role and effectiveness of fiscal policy is not possible within the context of the antiquated textbook models, which in their current and likely future form (the ‘New Neo-Classical Synthesis) have been used to endorse the deflationary bias in macroeconomic policy formulation during recent decades. This paper present a critique of the ‘mainstream’ textbook modelling of fiscal policy, and suggests a more meaningful framework in which to consider the role of fiscal policy; a framework which in particular recognises the realities of endogenous money and interest rate targeting by central banks.

Suggested Citation

  • Neil Hart, 2005. "The Role and Effectiveness of Fiscal Policy," The Economic and Labour Relations Review, , vol. 16(1), pages 17-41, July.
    • Handle: RePEc:sae:ecolab:v:16:y:2005:i:1:p:17-41
    DOI: 10.1177/103530460501600103
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    References listed on IDEAS

    as
    1. Victoria Chick & Sheila Dow, 2002. "Monetary Policy with Endogenous Money and Liquidity Preference: A Nondualistic Treatment," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 24(4), pages 587-607, July.
    2. Thomas I. Palley, 2002. "Endogenous Money: What it is and Why it Matters," Metroeconomica, Wiley Blackwell, vol. 53(2), pages 152-180, May.
    3. Pierre Piegay, 1999. "The New and Post Keynesian Analyses of Bank Behavior: Consensus and Disagreement," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 22(2), pages 265-283, December.
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