A Post Keynesian theory of economic policy - filling a void

Arne Heise

No 28, Working Papers on Economic Governance from University of Hamburg, Department of Socioeconomics

Abstract: The traditional theory of economic policy of the Tinbergen-Theil-type has come under severe criticism: in the ontological setting of the New Classical Macroeconomics based on the Rational Expectations Hypothesis (REH), economic policy is ineffective or neutral with respect to real variables. In the ontological setting of Hayekian economics based on informational deficiencies, economic policy is without orientation and, therefore, more harm- than helpful. Therefore, both criticisms are united in their rejection of state interventions. In this paper, a Post Keynesian alternative will be presented which is situated between nomocratic abstinence and teleological controllability.

Keywords: economic policy; Post Keynesianism; policy coordination (search for similar items in EconPapers)
Date: 2008
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Journal Article: A Post Keynesian theory of economic policyâfilling a void (2009)
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