Skip to main content
SpringerLink
Log in
Book cover

The Limits of Fiscal Policy pp 1–14Cite as

The Keynesian Revival

  • Chapter
  • First Online:

  • 686 Accesses

Abstract

This chapter provides a critical overview of the Keynesian revival since the Global Financial Crisis. It discusses the G20 fiscal response to the crisis, as well as introducing a range of non-Keynesian perspectives. It also examines the significance of the multiplier and briefly summarises the themes of subsequent chapters.

We are spending more than we have ever spent before and it does not work … after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!

Henry Morgenthau , US Treasury Secretary, 1939

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   49.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD   64.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

References

  • Auerbach, A., Gale, W., & Harris, B. (2010). Activist Fiscal Policy. Journal of Economic Perspectives, 24(4), 141–164.

    Article  Google Scholar 

  • Barro, R., & Redlick, C. (2011). Macroeconomic Effects from Government Purchases and Taxes. Quarterly Journal of Economics, 126, 51–102.

    Article  Google Scholar 

  • Bernanke, B. (2004). Essays on the Great Depression. Princeton, NJ: Princeton University Press.

    Google Scholar 

  • Bernheim, D. (1987). Ricardian Equivalence: An Evaluation of Theory and Evidence. In S. Fischer (Ed.), NBER Macroeconomics Annual 1987. Cambridge, MA: MIT Press.

    Google Scholar 

  • Clemens, J., & Miran, S. (2012). Fiscal Policy Multipliers on Sub-national Government Spending. American Economic Journal: Economic Policy, 4, 46–68.

    Google Scholar 

  • Cogan, J., Cwik, T., Taylor, J., & Wieland, V. (2010). New Keynesian Versus Old Keynesian Multipliers. Journal of Economic Dynamics and Control, 34(3), 281–295.

    Article  Google Scholar 

  • Davig, T., & Leeper, E. (2011). Monetary—Fiscal Interactions and Fiscal Stimulus. European Economic Review, 55, 211–227.

    Article  Google Scholar 

  • Eichengreen, B. (1992). The Origins and Nature of the Great Slump Revisited. Economic History Review, 44(2), 213–239.

    Article  Google Scholar 

  • Friedman, M. (1957). A Theory of the Consumption Function. New Jersey: Princeton University Press.

    Google Scholar 

  • Friedman, M., & Schwartz, A. (2008). The Great Contraction, 1929–1933 (new ed.). Princeton: Princeton University Press.

    Book  Google Scholar 

  • Gali, J., Lopez-Salido, D., & Valles, J. (2007). Understanding the Effects of Government Spending on Consumption. Journal of the European Economic Association, 38(1), 117–132.

    Google Scholar 

  • Grant, J. (2015). The Forgotten Depression: 1921, The Crash That Cured Itself. New York: Simon and Schuster.

    Google Scholar 

  • Guest, R., & Makin, A. J. (2013). The Dynamic Effects of Fiscal Stimulus in a Two Sector Open Economy. Review of Development Economics, 17(3), 609–626.

    Article  Google Scholar 

  • Ilzetzki, E., Mendoza, E., & Végh, C. (2013). How Big (Small?) Are Fiscal Multipliers? Journal of Monetary Economics, 60(2), 239–254.

    Article  Google Scholar 

  • Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. London: Macmillan.

    Google Scholar 

  • Kollmann, R. (2010). Government Purchases and the Real Exchange Rate. Open Economies Review, 21, 49–64.

    Article  Google Scholar 

  • Loayza, N., Schmidt-Hebbel, K., & Serva, L. (2000). What Drives Private Saving Across the World? Review of Economics and Statistics, 82, 165–181.

    Article  Google Scholar 

  • Makin, A. J., & Narayan, P. (2011). How Potent Is Fiscal Policy in Australia? Economic Papers, 30(3), 377–385.

    Article  Google Scholar 

  • Makin, A. J., & Narayan, P. (2013). Re-examining the ‘Twin Deficits’ Hypothesis: Evidence from Australia. Empirical Economics, 45, 817–829.

    Article  Google Scholar 

  • Masson, P., Bayoumi, T., & Samiei, H. (1998). International Evidence on the Determinants of Private Saving. World Bank Economic Review, 12, 483–501.

    Article  Google Scholar 

  • Mountford, A., & Uhlig, H. (2009). What Are the Effects of Fiscal Policy Shocks? Journal of Applied Econometrics, 24(6), 960–992.

    Article  Google Scholar 

  • Obstfeld, M., & Rogoff, K. (1996). Foundations of International Macroeconomics. Boston: MIT Press.

    Google Scholar 

  • Pizano, D. (2009). Conversations With Great Economists. New York: Jorge Pinto.

    Google Scholar 

  • Ramey, V. (2011). Identifying Government Spending Shocks: It’s All in the Timing. Quarterly Journal of Economics, 126(1), 1–50.

    Article  Google Scholar 

  • Ravn, M., Schmitt-Grohe, S., & Uribe, M. (2012). Consumption, Government Spending and the Real Exchange Rate. Journal of Monetary Economics, 59, 215–234.

    Article  Google Scholar 

  • Schmitt-Grohe, S., & Uribe, M. (2017). Open Economy Macroeconomics. Princeton, NJ: Princeton University Press.

    Google Scholar 

  • Spilimbergo, A., Symansky, S., Blanchard, O., & Cottarelli, C. (2008). Fiscal Policy for the Crisis. International Monetary Fund, SPN/08/01, December.

    Google Scholar 

  • Tagkalakis, A. (2008). The Effects of Fiscal Policy on Consumption in Recessions and Expansions. Journal of Public Economics, 92, 1486–1508.

    Article  Google Scholar 

  • Tanzi, V. (2013). Dollars, Euros and Debt. London: Palgrave Macmillan.

    Google Scholar 

  • Tanzi, V. (2015). Fiscal and Monetary Policies During the Great Recession: A Critical Evaluation. Comparative Economic Studies, 57(2), 243–275.

    Article  Google Scholar 

  • Taylor, J. (2009a). The Lack of an Empirical Rationale for a Revival of Discretionary Fiscal Policy. Paper presented at the Annual Meeting of the American Economic Association, January.

    Article  Google Scholar 

  • Taylor, J. (2009b). Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis. Stanford, CA: Hoover Institution Press.

    Google Scholar 

  • Temin, P. (1991). Lessons for the Great Depression. Oxford: Oxford University Press.

    Google Scholar 

  • Vegh, C. (2013). Open Economy Macroeconomics in Developing Countries. Masachusetts: MIT Press.

    Google Scholar 

  • Wickens, M. (2012). Macroeconomic Theory A Dynamic General Equilibrium Approach. New Jersey: Princeton University Press.

    Google Scholar 

  • Woodford, M. (2011). Simple Analytics of the Government Expenditure Multiplier. American Economic Journal: Macroeconomics, 3, 1–35.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Griffith University, Gold Coast, QLD, Australia

    Anthony J. Makin

Authors
  1. Anthony J. Makin
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Anthony J. Makin .

Rights and permissions

Reprints and permissions

Copyright information

© 2018 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Makin, A.J. (2018). The Keynesian Revival. In: The Limits of Fiscal Policy. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-319-90158-9_1

Download citation

Publish with us

Policies and ethics

Search

Navigation