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...

This paper reviews the current theoretical and empirical literature on the transmission mechanisms of fiscal policy. Its main conclusion is that there is nothing closely approaching an agreement on the effects of fiscal policy. The theoretical and empirical literature on the subject is scarce...

One of the greatest achievements of the modern mainstream approach to monetary policy is to have rejected the old quantity-theoretic framework, and to have replaced it with a Wicksellian two-interest-rate analysis, which closely reflects the actual behavior of central banks around the world....

This paper discusses three controversial questions to which I was naturally led by the reading of John E. King's A History of Post Keynesian Economics Since 1936 (2002). First, did King unduly play down the role of the second generation of Post Keynesian economists? Second, how revolutionary...

In academic and policy circles, the assumption is often made that the Fed and the European Central Bank (ECB) have a perfectly identical understanding of what monetary policy can achieve and they follow the same policy strategy. This assumption seats uncomfortably with the different legislative...

The paper shows that the "monetary policy rules and inflation targeting" literature and the "endogenous money" literature share a reaction function approach to central banking policy. Monetary aggregates are the outcome of the price-maker and quantity-taker behavior of central banks in the...