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Fiscal Policy and the Washington Consensus: A Post Keynesian Perspective


  • Alcino F. Câmara Neto
  • Matias Vernengo


The debt crisis of the early 1980s prompted several analyses that emphasized the negative role of fiscal deficits on economic development. This negative view of fiscal deficits was consolidated in the so-called Washington Consensus agenda. International financial crises – recurrent in a world of true uncertainty with unregulated capital flows, and flexible exchange rates – have led to perennial fiscal adjustment. Alternatives to the permanent fiscal adjustment, the main legacy of the Washington Consensus, from a Post Keynesian perspective, are presented. It is emphasized that the notion of the euthanasia of the rentier is a necessary complement to the socialization of investment.

Suggested Citation

  • Alcino F. Câmara Neto & Matias Vernengo, 2004. "Fiscal Policy and the Washington Consensus: A Post Keynesian Perspective," Working Paper Series, Department of Economics, University of Utah 2004_09, University of Utah, Department of Economics.
  • Handle: RePEc:uta:papers:2004_09

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    References listed on IDEAS

    1. Ayhan Kose & Kenneth Rogoff & Eswar S Prasad & Shang-Jin Wei, 2003. "Effects of Financial Globalization on Developing Countries; Some Empirical Evidence," IMF Occasional Papers 220, International Monetary Fund.
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    3. Gale, William G. & Orszag, Peter R., 2003. "Economic Effects of Sustained Budget Deficits," National Tax Journal, National Tax Association, vol. 56(3), pages 463-485, September.
    4. Grunberg, Isabelle, 1998. "Double jeopardy: Globalization, liberalization and the fiscal squeeze," World Development, Elsevier, vol. 26(4), pages 591-605, April.
    5. Fernando J. Cardim de Carvalho, 1992. "Mr Keynes And The Post Keynesians," Books, Edward Elgar Publishing, number 79.
    6. Luiz Bresser Pereira & Fernando Dall’Acqua, 1991. "Economic Populism Versus Keynes: Reinterpreting Budget Deficit in Latin America," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 14(1), pages 29-38, September.
    7. Colander, David, 1984. "Was Keynes a Keynesian or a Lernerian?," Journal of Economic Literature, American Economic Association, vol. 22(4), pages 1572-1575, December.
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    Cited by:

    1. Ramírez-Cedillo, Eduardo. & López-Herrera, Francisco., 2014. "Inversión pública y privada en México y su incidencia en el crecimiento," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(19), pages 53-76, segundo s.
    2. Alcino Ferreira Câmara Neto & Matías Vernengo, 2006. "Lula’s Social Policies: New Wine in Old Bottles?," Working Paper Series, Department of Economics, University of Utah 2006_07, University of Utah, Department of Economics.
    3. Carlos E. Schonerwald da Silva & Matías Vernengo, 2007. "Foreign Exchange, Interest and the Dynamics of Public Debt in Latin America," Working Paper Series, Department of Economics, University of Utah 2007_02, University of Utah, Department of Economics.
    4. Esteban Pérez-Caldentey & Matías Vernengo, 2007. "A Tale of Two Monetary Reforms: Argentinean Convertibility in Historical Perspective," Working Paper Series, Department of Economics, University of Utah 2007_01, University of Utah, Department of Economics.
    5. Asensio, Angel & Charles, Sébastien & Lang, Dany & Le Heron, Edwin, 2011. "Les développements récents de la macroéconomie post-keynésienne," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 10.
    6. Angel Asensio, 2008. "(Post) Keynesian alternative to inflation targeting," Post-Print halshs-00335560, HAL.
    7. Priewe, Jan, 2015. "Eight strategies for development in comparison," IPE Working Papers 53/2015, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    8. Angel Asensio, 2012. "Between the Cup and the Lip: On Post Keynesian Interest Rate Rules and Long-term Interest Rate Management," Chapters,in: Monetary Policy and Central Banking, chapter 1 Edward Elgar Publishing.
    9. Jan PRIEWE, 2016. "Eight Strategies for Development in Comparison," Turkish Economic Review, KSP Journals, vol. 3(3), pages 401-430, September.
    10. Angel Asensio, 2009. "Between the cup and the lip," CEPN Working Papers halshs-00496911, HAL.

    More about this item


    Policy; Development; Post Keynesian Economics;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General

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