CONSUMPTION AND KEYNESIAN FISCAL POLICY

The elements of Keynes fiscal policy were developed in 1930's. Since then, the Keynesian fiscal policy is in action. The economists believe even now that if the economy is operating below its potential level, the increase in government expenditure and cut in taxes is the perfect medicine to bring the economy back to its full employment level. The economists stress that government should encourage investment to increase the rate of capital formation by using timely proper fiscal measures. The government borrowing for financing schemes of development, the increase in ratio of savings to national income, cut in taxes to increase investment spending can accelerate the rate of capital for nation in the country and lead to

That is, Keynesian fiscal policy is not designed to increase economic growth in the long run

[…] Keynesian fiscal policy, for instance, is based on the notion that more growth is just a simple question of having the government spend more money. […]

Here's what I wrote last year about Keynesian fiscal policy

Many (mostly conservatives, but some liberals too) are skeptical of Keynesian fiscal policy theory […] but I think that collapse is almost inevitable at this point. Class warfare tax policy and Keynesian fiscal policy are not a recipe for a good […]

Chapter 11: Keynesian Fiscal Policy and the Multipliers

When I look back at Canadian fiscal policy over the last few years I see something that looks very close to an application of the preponed government spending multiplier idea. It was very New Keynesian fiscal policy.

Keynesian Fiscal Stimulus Policies Stimulate Debt -- Not the Economy


The elements of Keynes fiscal policy were developed in 1930's. Since then, the Keynesian fiscal policy is in action. The economists believe even now that if the economy is operating below its potential level, the increase in government expenditure and cut in taxes is the perfect medicine to bring the economy back to its full employment level. The economists stress that government should encourage investment to increase the rate of capital formation by using timely proper fiscal measures. The government borrowing for financing schemes of development, the increase in ratio of savings to national income, cut in taxes to increase investment spending can accelerate the rate of capital for nation in the country and lead to […] always been more concerned about the negative economic impact of government spending and the failure of Keynesian fiscal policy, but it’s also important to focus on waste and fraud. The average taxpayer may not want to […]