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The German anti-Keynes? On Walter Eucken's macroeconomics

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  • Feld, Lars P.
  • Köhler, Ekkehard A.
  • Nientiedt, Daniel

Abstract

Germany's approach to solving the Eurozone crisis is supposedly based on the ideas of Walter Eucken (1891-1950), the founder of ordoliberalism. In this and other contexts, Eucken's work has been described as being in direct opposition to that of John Maynard Keynes. Our paper aims to clarify and differentiate the relationship between the two scholars by making two main points. First, we show that Eucken supported a proto-Keynesian stimulus programme at the height of the Great Depression, the so-called Lautenbach plan of 1931. Second, we critically examine Eucken's description of 'full employment policy', a strategy with obvious parallels to Keynesian economic policy. Additionally, the paper maintains that when comparing Eucken and Keynes, more emphasis should be given to the fact that the former favours a rule-based rather than discretionary approach to policy-making.

Suggested Citation

  • Feld, Lars P. & Köhler, Ekkehard A. & Nientiedt, Daniel, 2018. "The German anti-Keynes? On Walter Eucken's macroeconomics," Freiburg Discussion Papers on Constitutional Economics 18/11, Walter Eucken Institut e.V..
    • Handle: RePEc:zbw:aluord:1811
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    References listed on IDEAS

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    1. Barry Eichengreen & Albrecht Ritschl, 2009. "Understanding West German economic growth in the 1950s," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 3(3), pages 191-219, October.
    2. Backhouse, Roger E. & Bateman, Bradley W. & Nishizawa, Tamotsu & Plehwe, Dieter (ed.), 2017. "Liberalism and the Welfare State: Economists and Arguments for the Welfare State," OUP Catalogue, Oxford University Press, number 9780190676681, Decembrie.
    3. Hansjorg Klausinger, 1999. "German Anticipations of the Keynesian Revolution?: The Case of Lautenbach, Neisser and Ropke," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 6(3), pages 378-403.
    4. Eichengreen, Barry & Hatton, Tim, 1988. "Interwar Unemployment in International Perspective," Institute for Research on Labor and Employment, Working Paper Series qt7bw188gk, Institute of Industrial Relations, UC Berkeley.
    5. Barry Eichengreen & Albrecht Ritschl, 2009. "Understanding West German economic growth in the 1950s," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 3(3), pages 191-219, October.
    6. Blyth, Mark, 2013. "Austerity: The History of a Dangerous Idea," OUP Catalogue, Oxford University Press, number 9780199828302, Decembrie.
    7. Jörg Bibow, 2018. "How Germany’s anti-Keynesianism has brought Europe to its knees," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(5), pages 569-588, September.
    8. Keynes, John Maynard, 1919. "The Economic Consequences of the Peace," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number keynes1919.
    9. Blaug,Mark, 1997. "Economic Theory in Retrospect," Cambridge Books, Cambridge University Press, number 9780521577014, Enero-Abr.
    10. Dal Pont Legrand, Muriel & Hagemann, Harald, 2017. "Business Cycles, Growth, And Economic Policy: Schumpeter And The Great Depression," Journal of the History of Economic Thought, Cambridge University Press, vol. 39(1), pages 19-33, March.
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    Cited by:

    1. Francesco Denozza, 2019. "Spettri del mitico ordo: diritto e mercato nel neoliberalismo (Ghosts of mytical ordo: Law and markets in neoliberalism)," Moneta e Credito, Economia civile, vol. 72(288), pages 327-348.
    2. Feld, Lars P. & Köhler, Ekkehard A. & Nientiedt, Daniel, 2021. "Ordoliberalism and the social market economy," Freiburg Discussion Papers on Constitutional Economics 21/5, Walter Eucken Institut e.V..

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    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • 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

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