Abstract
In this article we shall try to establish the guidelines of the Keynesian fiscal and monetary policies. In order to better understand the Keynesian macroeconomic system it is necessary to go briefly over the Classical economics in the pre-Keynesian period and the fiscal and monetary policies based on those analyses. While principally dwelling on the Keynesian macroeconomic system and the fiscal and monetary policies based on this system, we think we have some grounds about the significance of the subject. Firstly, the Keynesian analyses keep holding the balance of power in the theoretical field even in the post-Keynes era, and constitute the foundation of the macroeconomic textbooks. Secondly, despite the economic conditions of these days which have gone through many changes, and the emergence of anti-Keynesian views, the governments and monetary authorities (Central Banks) both in Europe and in the States, still implement – cautiously– fiscal and monetary policies in accordance with the Keynesian principles. In effect during Reagan era in the States and M. Thatcher in Britain, policies under the influence of Monetarism had been applied, however, since inflation was not prevented and there was an increase in unemployment, these policies were forsaken and moderate Keynesian policies were implemented low-key. But criticisms coming from both Monetarists and particularly New Classical economists forced fundamental methodological and assumptive changes in Keynesianism since the ‘80s; the school that emerged in the USA is called the New Keynesian Economics, in England the Post-Keynesian Economics.
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Özlen Hiç-Birol is a full-time faculty in the Economics Faculty of İstanbul University. From 2006 to 2009 she was Professor of Economics at Wisconsin International University in Ukraine, teaching undergraduate courses in the areas of Mathematics for Social Sciences and Macroeconomics. From 2002-2011 Ozlen was a part-time faculty in the Economics Department of Bogazici University and from 2004 to 2012 she was a part-time faculty at Kadir Has University. She graduated in 1994 with a BA in Economics from Bosphorus University, in 1996 with a Master’s degree in Economic Theory from Istanbul University and in 2001 with a Ph.D. in Economic Theory from Istanbul University.
Ayşen Hiç-Birol is a full-time faculty (associate Professor) in the Economics Faculty of İstanbul Aydın University. From 2008 to 2011 she was assistant Professor of Economics at Beykent University, teaching undergraduate courses in the areas of Econometrics and Statistics and International Economics. From 2007-2008 Ayşen was a faculty in the Economics Department of İstanbul Ticaret University and from 2002 to 2006 she was a faculty at Boston University. She graduated in 1992 with a BA in Economics from Bosphorus University. She has 3 Master’s degrees; in 1994 from Istanbul University, in 1996 from Boston College and in 2000 from Boston University; and she has 2 Ph.D; in 2002 from Istanbul University and in 2006 from Boston University.
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Hiç-Birol, Ö., Hiç Gencer, A. The keynesian system: fiscal and monetary policy guidelines. GSTF J Bus Rev 3, 26 (2014). https://doi.org/10.7603/s40706-014-0026-6
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DOI: https://doi.org/10.7603/s40706-014-0026-6