Why Keynes is important today

Peter Temin, David Vines 14 November 2014

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Macroeconomists have largely failed in explaining and recommending policies since the Global Financial Crisis of 2008. Today when thinking about fiscal policy they cite Ricardian Equivalence to deny the efficacy of Keynesian analysis (which was abandoned in the turbulent 1970s that signaled the end of rapid growth). They seem unaware that they have revived the views of Montagu Norman, Governor of the Bank of England, in 1930.

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Topics:  Global crisis Macroeconomic policy

Tags:  stimulus, Ricardian equivalence, Keynesianism

Reconciling Hayek's and Keynes' views of recessions

Paul Beaudry, Dana Galizia, Franck Portier 01 June 2014

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There remains considerable debate regarding the causes and consequences of recessions. Two views that are often presented as opposing, and which created controversy in the recent recession and its aftermath, are:

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Topics:  Macroeconomic policy

Tags:  recession, Keynesianism, Hayekian recession

The return of schools of thought in macroeconomics

Simon Wren-Lewis 24 February 2012

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Topics:  Frontiers of economic research Macroeconomic policy

Tags:  Keynesianism, Schools of thought, New Classical economics, freshwater, saltwater

Fiscal policy: What does ‘Keynesian’ mean?

Jonathan Portes 07 February 2012

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I joined the UK Treasury in 1987 and subsequently went to Princeton, where I studied with Rogoff and Campbell. Eventually, I ended up in the Cabinet Office, advising the Prime Minister, on the eve of the 2008 crisis. At no point during this period, however, did I think of myself as a ‘Keynesian’. Nor was it really a meaningful question. You might as well have asked a physicist if he was a ‘Newtonian’. Keynes was a great figure (indeed, one of the greatest Britons of the 20th century) and you had to understand his insights to understand macroeconomics; but the debate had moved on.

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Topics:  Macroeconomic policy Politics and economics

Tags:  UK, Keynesianism

Europe’s new fiscal compact treaty does not outlaw Keynesianism and is a stepping stone to more progress

Jacob Funk Kirkegaard 06 February 2012

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In record time since the idea was first mulled over at the EU Council on 9 December 2011, Europe has compiled a new Fiscal Compact Treaty.1 Angela Merkel on the night of its final approval on 30 January called it a “masterpiece”. It is perhaps unsurprising, though, that not everyone agrees.

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Topics:  EU policies

Tags:  Germany, Keynesianism, Eurozone crisis, Stability and Growth Pact, Fiscal Compact Treaty

Germany spending is not the cure

Alberto Alesina, Roberto Perotti 17 June 2010

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A widely held view in Europe goes more or less as follows. After the shock of reunification, Germany has sought to enhance competitiveness through a variety of means. The policy was remarkably successful, turning the “sick man of Europe” into a highly competitive economy. One implication, however, was an imbalance with the rest of Europe. Germany’s current account surplus find its counterparts in, amongst other places, current account deficits in southern Europe, especially Spain, Portugal, and Greece.

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Topics:  EU institutions

Tags:  Germany, Keynesianism, fiscal austerity, Eurozone rescue

Farewell to the natural rate: Why unemployment persists

Roger E. A. Farmer 06 January 2010

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Is the new-Keynesian approach (Clarida, Galí, and Gertler 2000) right? Here I suggest that US data on inflation, unemployment, and vacancies is best viewed through the lens of old-Keynesian theory.

A dynamic (literally) description of the data

Here I provide a video of data that illustrates how events unfolded in real time. I proceed to connect these data with three strands of research.

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Topics:  Labour markets

Tags:  unemployment, Beveridge Curve, Keynesianism

Events