Keynesian economics steering is back - end of liberal economic policy?

Mogens Ove Madsen

Chapter 7 in Welfare States in a Turbulent Era, 2023, pp 98-111 from Edward Elgar Publishing

Abstract: The main question in this chapter is whether, in economic theory and economic policy, there will be a lasting Keynesian paradigm shift in public finances due to Covid-19? Keynesianism can be said to have made a strong comeback during the financial crisis of 2007-2008, but it did not suppress neoliberal orthodoxy, as the latter enjoyed a brief renaissance with austerity policies. On the other hand, it can be argued that Covid-19 has been a springboard towards new fiscal paradigms, just as it has been a ground-breaking accelerator for latent political shifts that were already underway. The pandemic serves as a focal event that has opened a unique policy window for government intervention of an unprecedented scale in most countries, reflecting a Keynesian theoretical understanding.

Keywords: Development Studies; Economics and Finance; Politics and Public Policy Sociology and Social Policy; Sustainable Development Goals; Urban and Regional Studies (search for similar items in EconPapers)
Date: 2023
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