Keynesian Macroeconomic Theory and Policy: Ongoing and Increasing Relevance

In: Socio-economic review, Band 7, Heft 2, S. 343-347

Abstract

Multiple criticisms of John Maynard Keynes' macroeconomic theories appeared between the mid-1960s, when dissident schools of economic theory & research consolidated their prominence at the Department of Economics of the University of Chicago & other institutional sites of economic research & writing (Delazay & Garth, 2002), & the early 1980s, when these views & theories became internalized in governmental & non-profit institutions & dominated journalistic writing & public opinion at large (Lind, 1996). The Keynesian economic model was criticized on a number of points: for stressing the demand side of the economy, for being too short term in its perspective, for disregarding agents' rational expectations. It was criticized for being a 'closed-system' & for depending too much on fixed exchange rates & on stable global costs such as oil prices. In terms of policy, it was suspected that Keynesian economic theory was subject to or even inclined towards irresponsible misuse-e.g. the ill-timed & excessively stimulative use of specific economic policy instruments within a 'political business cycle'-& it was criticized for being too dependent on monetary preconditions. In response to these criticisms, I will simply call attention to two aspects of Keynesian economics that would support contemporary or prospective economic & financial policies in a Keynesian perspective. Adapted from the source document.