Fiscal policy in the monetary theory of production: an alternative to the "new consensus" approach

This paper provides an alternative view to the new consensus approach, from the standpoint of the monetary theory of production. It is shown that output growth is demand driven, so that fiscal policies, as well as direct state intervention above all in the labor market, are effective for increasing output and employment. This also applies to the current dynamics, particularly to the effects of the economic policy of the European Union, where, as will be shown, respect for the Maastricht parameters has contributed to determine poor macroeconomic performance.