This chapter surveys the recent literature on the theory of macroeconomic policy. We study the effect of various incentive constraints on the policy making process, such as lack of credibility, political opportunism, political ideology, and divided government. The survey is organized in three...

Chapter 1. Introduction and Overview of the Fourth Edition -- Chapter 2. National Income Accounts -- Chapter 3. Budget Deficits, Trade Deficits and Global Capital Flows: The National Savings Identity -- Chapter 4. Aggregate Demand: Setting the Stage for Demand-Side Stabilization -- Chapter 5....

For Europe, the war in Ukraine is a first-order economic shock. While the direct fiscal implications of taking care of refugees, increasing military spending and strengthening energy autonomy remain limited, the impact of elevated energy and food prices on national income and its distribution is...

This paper examines the dynamics of Keynesian models that incorporate feedback effects from the labor market to income distribution, investment, aggregate demand and output. A baseline version of the model can generate endogenous growth cycles, but cumulative divergence and economic collapse...