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Fiscal Policy and the Washington Consensus: A Post Keynesian Perspective

Author

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  • Alcino F. Câmara Neto
  • Matias Vernengo

Abstract

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

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    7. Philip Arestis & Stephen P. Dunn & Malcolm Sawyer, 1999. "Post Keynesian Economics and Its Critics," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 21(4), pages 527-549, July.
    8. Kuczynski, Pedro-Pablo & John Williamson (ed.), 2003. "After the Washington Consensus: Restarting Growth and Reform in Latin America," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 350, January.
    9. 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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    Citations

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    Cited by:

    1. Botta, Alberto & Porcile, Gabriel & Spinola, Danilo & Yajima, Giuliano Toshiro, 2023. "Financial integration, productive development and fiscal policy space in developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 175-188.
    2. Angel Asensio, 2009. "Between the cup and the lip," Working Papers halshs-00496911, HAL.
    3. 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.
    4. Alcino Ferreira Câmara Neto & Matías Vernengo, 2007. "Lula’s Social Policies: New Wine in Old Bottles?," Palgrave Macmillan Books, in: Philip Arestis & Alfredo Saad-Filho (ed.), Political Economy of Brazil, chapter 6, pages 73-93, Palgrave Macmillan.
    5. 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.
    6. 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.
    7. Angel Asensio, 2012. "Between the Cup and the Lip: On Post Keynesian Interest Rate Rules and Long-term Interest Rate Management," Chapters, in: Louis-Philippe Rochon & Salewa ‘Yinka Olawoye (ed.), Monetary Policy and Central Banking, chapter 1, Edward Elgar Publishing.
    8. Jan PRIEWE, 2016. "Eight Strategies for Development in Comparison," Turkish Economic Review, KSP Journals, vol. 3(3), pages 401-430, September.
    9. Jesus Ferreiro & Eugenia Correa & Carmen Gomez, 2008. "Has Capital Account Liberalization in Latin American Countries Led to Higher and More Stable Capital Inflows?," International Journal of Political Economy, Taylor & Francis Journals, vol. 37(4), pages 31-63.
    10. 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.
    11. Angel Asensio & Sébastien Charles & Edwin Le Héron & Dany Lang, 2011. "Recent developments in Post-Keynesian modeling [Los desarrollos recientes de la macroeconomía post-keynesiana]," Post-Print halshs-00664867, HAL.
    12. Angel Asensio, 2008. "(Post) Keynesian alternative to inflation targeting," Post-Print halshs-00335560, HAL.
    13. repec:hal:cepnwp:hal-05000473 is not listed on IDEAS
    14. 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).
    15. Angel Asensio, 2009. "Between the cup and the lip," CEPN Working Papers halshs-00496911, HAL.

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    Keywords

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    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • 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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