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Reassuring the Role of Keynesian Policies for the New Millenium


  • Philip Arestis

    (The Jerome Levy Economics Institute)

  • Malcolm Sawyer

    (The Jerome Levy Economics Institute)


It is often asserted that, whatever role Keynesian policies may have played in underpinning the long post war boom, those policies are no longer relevant. In contrast this paper seeks to reassert the need for Keynesian policies in order to secure full employment. In doing so, as will be seen below, we interpret Keynesian economic policies in a rather broad sense, and specifically wish to distance ourselves from treating Keynesian policies as virtually synonymous with fiscal demand management designed to fine tune the economy. We also recognize that there are many constraints on the pursuit of full employment, arising from the demand and the supply sides, and that the key objective of Keynesian policies is to alleviate those constraints in the pursuit of full employment. This paper puts forward an approach to economic policy which could be described as post Keynesian. Since the term Keynesian policies has been variously defined, we indicate in section II what we mean by the term, which is broader than most usages. The case for Keynesian policies arises out of, and can only be appreciated by reference to, a conception underlying this paper in section III. This is further elaborated in section IV by a consideration of the constraints on the achievement on full employment in a market economy. This leads into section V in which we outline the nature of Keynesian policies which relate to both the demand side and the supply side of the economy. The final main section, section VI, considers some of the constraints on the implementation of the type of Keynesian policies which we are advocating.

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  • Philip Arestis & Malcolm Sawyer, 1998. "Reassuring the Role of Keynesian Policies for the New Millenium," Macroeconomics 9801004, EconWPA.
  • Handle: RePEc:wpa:wuwpma:9801004 Note: Type of Document - Acrobat PDF; prepared on IBM PC ; to print on PostScript; pages: 25; figures: included

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    References listed on IDEAS

    1. Cowling, Keith & Sugden, Roger, 1989. "Exchange Rate Adjustment and Oligopoly Pricing Behaviour," Cambridge Journal of Economics, Oxford University Press, vol. 13(3), pages 373-393, September.
    2. Paul Davidson, 1994. "Post Keynesian Macroeconomic Theory," Books, Edward Elgar Publishing, number 124.
    3. Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-1255, December.
    4. Camerer, Colin, 1989. " Bubbles and Fads in Asset Prices," Journal of Economic Surveys, Wiley Blackwell, vol. 3(1), pages 3-41.
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    6. Lars Calmfors, 1993. "Centralisation of Wage Bargaining and Macroeconomic Performance: A Survey," OECD Economics Department Working Papers 131, OECD Publishing.
    7. Steven R. Cunningham & Jon Vilasuso, 1995. "Is Keynesian Demand Management Policy Still Viable?," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 17(2), pages 187-210, January.
    8. J. S. L. McCombie & A. P. Thirlwall, 1997. "The Dynamic Harrod Foreign Trade Multiplier and the Demand-orientated Approach to Economic Growth: an Evaluation," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(1), pages 5-26.
    9. Nickell, Stephen, 1990. "Inflation and the UK Labour Market," Oxford Review of Economic Policy, Oxford University Press, vol. 6(4), pages 26-35, Winter.
    10. Arestis, Philip & Howells, Peter, 1996. "Theoretical Reflections on Endogenous Money: The Problem with 'Convenience Lending.'," Cambridge Journal of Economics, Oxford University Press, vol. 20(5), pages 539-551, September.
    11. Arestis, Philip, 1996. "Post-Keynesian Economics: Towards Coherence," Cambridge Journal of Economics, Oxford University Press, vol. 20(1), pages 111-135, January.
    12. Philip Arestis & Iris Biefang-Frisancho Mariscal, 1997. "Conflict, Effort and Capital Stock in UK Wage Determination," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 24(3), pages 179-193, October.
    13. Victoria Chick, 1983. "Macroeconomics after Keynes: A Reconsideration of the General Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530457, July.
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    JEL classification:

    • E - Macroeconomics and Monetary Economics


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