Economic theory and policy: a coherent post-Keynesian approach

Philip Arestis

European Journal of Economics and Economic Policies: Intervention, 2013, vol. 10, issue 2, 243-255

Abstract: This contribution focuses on a coherent new way of thinking about the macroeconomy in terms of both economic theory and economic policies. The central bank should focus on financial stability; for fiscal policy in the short term and in the long term to address demand issues is very important. Interest rate policy should be such that the real rate of interest is in line with trend rate of growth in the economy. Fiscal and monetary policies, though, should be coordinated closely. Major central bank cooperation and intervention in the foreign exchange market is necessary to control the exchange rate. Regional and industrial policies to create the required capacity are important, along with incomes policies, to contain inflationary/deflationary pressures. Distribution of income and wealth is another important policy dimension in view of its importance in terms of the great recession.

Keywords: Â economic theory; economic policies; post-Keynesian economics (search for similar items in EconPapers)
JEL-codes: D30 E12 E42 E43 E44 E64 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:elg:ejeepi:v:10:y:2013:i:2:p243-255

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