The evolution of fiscal policy theory and the Eurozone

Name: The evolution of fiscal policy theory and the Eurozone
Brand: Vita e Pensiero
Price: 6.00 EUR
Availability: OnlineOnly

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Issue

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2019 - 2

Title

The evolution of fiscal policy theory and the Eurozone

Author

Rosaria Rita Canale

Publisher

Vita e Pensiero

Format

Article |

Pdf

Pages

Online from

10-2019

Doi

10.26350/000518_000031

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

This paper is devoted to fiscal policy theory and to how its evolution influenced the policy principles implemented from the end of the WWII to nowadays. It shows how the theoretical foundations evolved, from the Keynesian theory according to which public expenditure was conceived as an instrument to sustain aggregate demand and achieve full employment, to the present theoretical framework in which, following the intertemporal approach, it has been downgraded to an external shock. After the occurrence of the great financial crisis a new process of revision started, according to which, in times of declining macroeconomic conditions, fiscal policy has not only short-run effects on income, but also long run effects on potential output. However, it did not yet translate into a new role for fiscal policy at least in the Eurozone.

keywords

Fiscal policy, Keynesian approach, Intertemporal approach, Public finance, Eurozone

Author biography

Rosaria Rita Canale, Dipartimento di Studi Aziendali ed Economici, Università degli Studi di Napoli ‘‘Parthenope’’. Email: rorita.canale@uniparthenope.it