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Stagnation policy in the Eurozone and economic policy alternatives: A Steindlian/neo-Kaleckian perspective

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  • Eckhard Hein

    () (Berlin School of Economics and Law, Berlin (GE))

Abstract

Empirically, the macroeconomic institutions and the macroeconomic policy approach in the Eurozone have failed badly, both in terms of preventing the global financial and economic crisis from becoming a euro crisis and in generating a rapid recovery from the crisis, in particular. In this paper I will argue that the dominating macroeconomic policy regime in the Eurozone can be seen as a version of what Steindl (1979) had called ‘stagnation policy’. To underline this argument, I will provide a simple Steindlian distribution and growth model in order to identify the main channels through which stagnation policy affects accumulation and productivity growth. This will also provide a set of elements of a Steindlian anti-stagnation policy. Against this theoretical background I will then examine the macroeconomic institutions and the macroeconomic policy approach of the Eurozone which has been based on the New Consensus Macroeconomics (NCM) and I will highlight its main deficiencies. This will then provide the grounds for an outline of an alternative macroeconomic policy approach for the specific institutional setup of the Eurozone based on a post-Keynesian/Steindlian/neo-Kaleckian approach.

Suggested Citation

  • Eckhard Hein, 2017. "Stagnation policy in the Eurozone and economic policy alternatives: A Steindlian/neo-Kaleckian perspective," Working Papers 10/17, Sapienza University of Rome, DISS.
  • Handle: RePEc:saq:wpaper:10/17
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    References listed on IDEAS

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    Cited by:

    1. Eckhard Hein & Walter Paternesi Meloni & Pasquale Tridico, 2019. "Welfare models and demand-led growth regimes before and after the financial and economic crisis," FMM Working Paper 41-2019, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    2. repec:clr:wugarc:y:2019v:2019i:2p:277 is not listed on IDEAS
    3. Eckhard Hein & Petra Dünhaupt & Ayoze Alfageme & Marta Kulesza, 2017. "Financialisation and distribution in three main Eurozone countries from a Kaleckian perspective: France, Germany and Spain compared – before and after the crisis," Working Papers 8/17, Sapienza University of Rome, DISS.

    More about this item

    Keywords

    Stagnation; stagnation policy; Eurozone; policy alternatives; Steindl.;

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • 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
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions

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