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Reinstating fiscal policy for normal times: Public investment and Public Jobs Programmes

Author

Listed:
  • Robert Skidelsky

    (House of Lords, UK)

  • Simone Gasperin

    (UCL Institute for Innovation and Public Purpose, UK)

Abstract

This paper upholds the classical Keynesian position that a laissez-faire market economy lacks a spontaneous tendency to full employment. Focusing on the UK case, it argues that monetary policy could not prevent the economic collapse of 2008-9 or achieve full recovery from the Great Recession that followed. The paper then outlines the case for fiscal policy to regain a permanent status of primacy in modern macroeconomic management, beyond the pandemic emergency. It distinguishes between public investment and automatic stabilisers, reducing discretionary actions to a minimum. It presents the case for re-empowering the State’s public investment function and for reforming the system of automatic counter-cyclical stabilisers by means of public jobs programmes.

Suggested Citation

  • Robert Skidelsky & Simone Gasperin, 2021. "Reinstating fiscal policy for normal times: Public investment and Public Jobs Programmes," PSL Quarterly Review, Economia civile, vol. 74(296), pages 3-24.
    • Handle: RePEc:psl:pslqrr:2021:11
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    File URL: https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/17483/16695
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    References listed on IDEAS

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    Cited by:

    1. Meryem Gökten & Philipp Heimberger & Andreas Lichtenberger, 2024. "How Far from Full Employment? The European Unemployment Problem Revisited," wiiw Working Papers 245, The Vienna Institute for International Economic Studies, wiiw.
    2. Servaas Storm, 2021. "Labour's loss: Why macroeconomics matters," PSL Quarterly Review, Economia civile, vol. 74(299), pages 249-285.

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    More about this item

    Keywords

    monetary policy; fiscal policy; public investment; job programmes;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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