From theory to practice in macroeconomic models: post-Keynesian eclecticism

The paper analyses retrospectively the impact that the publication of The economists' "Manifesto" on unemployment in the EU has exerted on the European economic policies. On the supply side, it is acknowledged that many suggestions have been put in practise: among them, the labour market reforms that introduced more flexibility in labour contracts, raising employment and reducing the unemployment rates in all European countries. On the contrary, the suggestions on the demand management policies were less followed. In fact, all countries pursued tight fiscal policies due to the Maastricht parameters, and the BCE adopted a tight monetary policies that appreciated the euro exchange rate. Also disappointing are the regional development policies. At this regard, the paper suggests to use fiscal incentives to capture foreign direct investments to promote an accelerated growth in the European backward regions.