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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. Gökten, Meryem & Heimberger, Philipp & Lichtenberger, Andreas, 2024. "How far from full employment? The European unemployment problem revisited," European Economic Review, Elsevier, vol. 164(C).
    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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