21st Century Keynesian Economic Policies

Abstract

This chapter starts from the idea that the ways in which macroeconomic policies are formulated are heavily conditioned by the underlying analysis of the macroeconomy. We develop a broad Keynesian approach to the macroeconomy analysis, which is relevant for the realities of the 21st century. The overall objectives of economic policy, which forms the basis of our approach, is squarely sustainable (environmental and otherwise) and equitable economic development and growth. And within it we identify the main objective of macroeconomic policy as the achievement of full employment of the available labour force (recognising that the available labour force depends on social conditions and is influenced by the path of economic activity). Achieving such an objective would require, inter alia, the maintenance of a high level of aggregate demand consistent with the full employment of labour, and the provision of sufficient productive capacity to enable that full employment, where sufficient is to be interpreted in terms of quantity, quality and geographical distribution.KeywordsKeynesian economics21st centurymacroeconomic policiesfull employment