The subject of budgetary policy in the period following the General Theory concerns the impact of public expenditure and taxation on aggregate demand. More recently some attention has also been paid to the relationship between the budget and aggregate supply. In both cases emphasis must be placed on the word ‘aggregate’. The structure of government expenditure and taxation will also have an impact which can be studied at the microeconomic level in terms of effects on individual firms, households and markets, but that is not what is normally covered by the present heading.
- The literature on budgetary policy is enormous. The following works contain useful bibliographies as well as being valuable in their own right.Google Scholar
- Hansen, B. 1956. The economic theory of fiscal policy. London: Allen & Unwin.Google Scholar
- Peacock, A.T. and Shaw, R. 1982. The economic theory of fiscal policy. 2nd edn, London: Allen & Unwin.Google Scholar
- Peston, M. 1982. Theory of macroeconomic policy. 2nd edn, Oxford: Philip Allan.Google Scholar