On the Limitations of Fiscal Policy: a Radical Kalechian View

J. Halevi and Peter Kriesler

Working Papers from New South Wales - School of Economics

Abstract: Kalecki was one of the co-developers of the principle of effective demand. This was used by many economists, in the post war period, to argue that government fiscal policy could be used to stimulate effective demand and fine tune the economy to reduce cyclical unemployment. Kalecki, however, was always dubioud of this proposition. Initially, he argued that expansionary fiscal policy, in the form of budget deficits, could reduced unemployment, but that to sustain this lower level of unemployment would require ever increasing deficits. Later, in his famous "Political aspects of full employment" Kalecki was much more skeptical of even this positions.

Keywords: FISCAL POLICY; MACROECONOMICS (search for similar items in EconPapers)
JEL-codes: E00 E62 (search for similar items in EconPapers)
Pages: 18 pages
Date: 1999
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:nesowa:99/14

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