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The Role of Public Investment as Principal Macroeconomic Tool to Promote Long-Term Growth

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  • Mario Seccareccia

Abstract

The "new consensus" in macroeconomics downplayed fiscal policy prior to the financial crisis. This view dramatically changed during and immediately following the crisis. However, this view has witnessed a reversal and returned to the pre-crisis policy perspective, especially since 2010. In this article, the modern "financial balances" view of fiscal policy is analyzed. While this modern framework of analysis, which is diametrically opposed to the new consensus framework, is correct in its emphasis on functional finance (which ensues directly from the latter fiscal policy perspective), the article advocates a return to a view of long-term fiscal policy, which Keynes espoused both in The General Theory and thereafter on the "socialization of investment."

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  • Mario Seccareccia, 2011. "The Role of Public Investment as Principal Macroeconomic Tool to Promote Long-Term Growth," International Journal of Political Economy, Taylor & Francis Journals, vol. 40(4), pages 62-82.
    • Handle: RePEc:mes:ijpoec:v:40:y:2011:i:4:p:62-82
    DOI: 10.2753/IJP0891-1916400403
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    Cited by:

    1. Massimo Florio, 2021. "Knowledge creation: new frontiers for public investment," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(3), pages 379-386, September.
    2. Eichacker, Nina, 2020. "German Public Banks, Financial Competition, and Crisis: Institutional Change in German Banking and Financial Vulnerability Before the Global Financial Crisis," SocArXiv jkp5u, Center for Open Science.
    3. Zeilbeck, Severin, 2015. "An investment initiative for fiscally constrained EU member states: The role of synergetic financial instruments," IPE Working Papers 58/2015, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    4. Gechert, Sebastian, 2012. "The multiplier principle, credit-money and time," MPRA Paper 34648, University Library of Munich, Germany.
    5. Petra Došenoviæ Bonèa & Maks Tajnikar, 2018. "Austerity policies, economic growth and fiscal balance: lessons from Slovenia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(1), pages 287-308.
    6. Massimo Cingolani, 2013. "Finance Capitalism: A Look at the European Financial Accounts," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(3), pages 249-290, May.

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