The financial crisis and the 2008-2009 recession is now an ongoing crisis that is far from being resolved. It poses fundamental questions of theory and policy and they are not much addressed in the current debate and research. The paper asks the question of the nature of the crisis and why it is indeed different from those of the last thirty years. Because of that it is hardly manageable by the tools of standard theory and also by traditional anti-cyclical Keynesian policies. Thus the second point is that it requires reconsideration of the role of government. Reacting to the criticism by prominent Keynesian such as Krugman, who has argued for a much stronger stimulus the paper argues that any recovery driven by private investment need a change in the role of government. Indeed the crisis calls for a rethinking of Keynesian theory and policy.
The Ongoing Crisis: Questions for Keynesian Theory
GUALERZI, DAVIDE
2013
Abstract
The financial crisis and the 2008-2009 recession is now an ongoing crisis that is far from being resolved. It poses fundamental questions of theory and policy and they are not much addressed in the current debate and research. The paper asks the question of the nature of the crisis and why it is indeed different from those of the last thirty years. Because of that it is hardly manageable by the tools of standard theory and also by traditional anti-cyclical Keynesian policies. Thus the second point is that it requires reconsideration of the role of government. Reacting to the criticism by prominent Keynesian such as Krugman, who has argued for a much stronger stimulus the paper argues that any recovery driven by private investment need a change in the role of government. Indeed the crisis calls for a rethinking of Keynesian theory and policy.Pubblicazioni consigliate
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