During this weekend Italian citizens will go to vote. Most part of political parties have proposed more or less economy manouvres based on Keynesian theory. Do you think that to restart the South Europe countries economy it needs to invest public money?
As a hardcore anti-Keynesian, I’ll have to go with no, it won’t.
^Agree. Keynesian economics is loved by many politicians because it gives them a ticket to spend in hopes to drive growth in the short-term, making them look like geniuses. However, it is usually quite wasteful and harmful long-term.
it may work it may not work - in theory the heightened public spending can spur the economy and drive growth that can assist the economy at large. Funding large public works projects can put money into the pockets of workers that flow to businesses which can invest with increased revenues. Its all fairly theoretical and thus who knows if it actually works, same with trickle down economics. Some people will tell you it works, some will say otherwise. In reality the economy has so many moving pieces that no single policy will work all the time. Plus this is italy we are talking about so its almost a surefire way to stuff some money into the mob guys that run that countries pockets.
depends on the situation imo.
consider a depression like environment where unemployment is high, and incomes are heading lower. keynesian economics will have a dramatic effect because a lot of people will have income that they can then borrow against causing more credit to speed up the economy. similar to a situation when you give a refund to poor people vs rich people. giving money to poor people causes more positive effects to the economy who spend it all and need it vs rich people who save the majority of it who either invest it, or sit on it and do nothing.
now consider it in a situation where incomes are high, and unemployment is low. government will then be overpaying and the amount they spend wont boost the economy by a lot less.
also what the government spends it on also matter. if they are spending hte money for people to be more productive such as roads, business grants, self employment stuff, then it will have a positive effect. vs say they spend it on stuff like monuments, parks, or giving free money to everyone, these will not make people more productive.
agree…for both major statements
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It may work and may not work…Fiscal and monetary policy are works of Keynesian…Also the failed Bush era trickle down economy or supply side expansion - in big picture is semi Keynesian - failed spectacularly…"If I no longer have to pay luxury tax on my $300k lambo and get a $10k tax break on my $1M income, how is this going to help the middle and lower class and expand the economy when I am just going to tuck it away in savings lol
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Italy is a whole different animal…Just one of their many many mafias, 'Ndrangheta that focuses on narcotics, human trafficking, extortion, kidnappings accounts for 4% of Italy’s GDP…This is only possible because so many politicians and even their prime ministers are directly or indirectly connected to the mafia world…so, yeah let’s not compare them to America…
Comparison should only be made between two similar things, persons…Comparing whether a tree is higher from the sea level or ISS is higher is not a comparison…
Keynesian spending will not have a lasting impact when their money supply is limited as part of the Euro. Keynesian spending is only effective near economic troughs to jumpstart investment and prevent a deflationary spiral. spending a whole bunch of money when wages are stable and EU unemployment is well off cycle lows will just create excesses that burn out in the near future. this would be incredibly risky for italy in particular due to its huge debt load.
aww that makes sense.