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The Role and Effectiveness of Fiscal Policy

Published online by Cambridge University Press:  01 January 2023

Neil Hart
Neil Hart*
Affiliation:
School of Economics and Finance, University of Western Sydney
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Abstract

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A meaningful discussion of the role and effectiveness of fiscal policy is not possible within the context of the antiquated textbook models, which in their current and likely future form (the ‘New Neo-Classical Synthesis) have been used to endorse the deflationary bias in macroeconomic policy formulation during recent decades. This paper present a critique of the ‘mainstream’ textbook modelling of fiscal policy, and suggests a more meaningful framework in which to consider the role of fiscal policy; a framework which in particular recognises the realities of endogenous money and interest rate targeting by central banks.

Type
Symposium on Monetary and Fiscal Policy in Theory and Practice
Information
The Economic and Labour Relations Review , Volume 16 , Issue 1 , July 2005 , pp. 17 - 41
Copyright
Copyright © The Author(s) 2005

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