Reinstating fiscal policy for normal times: Public investment and Public Jobs Programmes

Robert Skidelsky () and Simone Gasperin ()
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Robert Skidelsky: House of Lords, UK
Simone Gasperin: UCL Institute for Innovation and Public Purpose, UK

PSL Quarterly Review, 2021, vol. 74, issue 296, 3-24

Abstract: This paper upholds the classical Keynesian position that a laissez-faire market economy lacks a spontaneous tendency to full employment. Focusing on the UK case, it argues that monetary policy could not prevent the economic collapse of 2008-9 or achieve full recovery from the Great Recession that followed. The paper then outlines the case for fiscal policy to regain a permanent status of primacy in modern macroeconomic management, beyond the pandemic emergency. It distinguishes between public investment and automatic stabilisers, reducing discretionary actions to a minimum. It presents the case for re-empowering the State’s public investment function and for reforming the system of automatic counter-cyclical stabilisers by means of public jobs programmes.

Keywords: monetary policy; fiscal policy; public investment; job programmes (search for similar items in EconPapers)
JEL-codes: E32 E52 E61 E62 E63 H54 J68 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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