IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Searching for Keynes

Since its publication over 60 years ago, Keynes' General Theory of Employment, Interest and Prices (1936) has substantially influenced both macroeconomic theory and popular opinion about what governments can and should do. However, the extent to which counter-cyclical stabilization has actually been attempted remains an open question. Investigation of this issue requires the construction of a counterfactual describing what the relationship between fiscal policy and transitory macroeconomic shocks would have been like 'after Keynes', if Keynesianism stabilization was not implemented. This counterfactual must allow for the possibility that after Keynes, as well as before, political pressure exerted by voters who find themselves in adverse circumstances may have led to the adoption of fiscal policies that look Keynesian, but are not. We estimate such a counterfactual for Canada using consistent budgetary data for the period from 1870 to 1995 constructed by Irwin Gillespie (and updated by the authors), and use it to test for the presence of Keynesian elements in the fiscal policy choices of the Government of Canada. The estimating equations are based on an intertemporal probabilistic voting framework in which parties compete for support from two types of voters; those who are liquidity constrained and those who are not. The Canadian case is of particular interest: the White Paper on Employment and Income in 1945 signalled the acceptance of Keynesianism in senior policy circles; one of Keynes’ students, Robert Bryce, who dates the first Keynesian budget from 1939, played an important role for many years in the Department of Finance; and the fixed exchange rate policy conducted from 1962 to 1970 created an environment conducive to fiscal policy actions.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Full text
Download Restriction: None

Paper provided by Carleton University, Department of Economics in its series Carleton Economic Papers with number 99-06.

in new window

Length: 39 pages
Date of creation: Mar 1999
Date of revision: Jun 2008
Publication status: Published: – revised version: Searching for Keynesianism, European Journal of Political Economy, Vol. 24, No. 2 (June 2008), pp. 294–316
Handle: RePEc:car:carecp:99-06
Contact details of provider: Postal: C870 Loeb Building, 1125 Colonel By Drive, Ottawa Ontario, K1S 5B6 Canada
Phone: 613-520-3744
Fax: 613-520-3906

Order Information: Email:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:car:carecp:99-06. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabrina Robineau)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.