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| Format: | Artículo científico |
| Language: | en |
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Universidad Nacional Autónoma de México
2003
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| Online Access: | https://www.redalyc.org/articulo.oa?id=60124601 |
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- Chicago, Keynes and Fiscal Policy Esteban Pérez Caldentey Economía y Finanzas During the first half of the 1930s, the founders of the Chicago School ofeconomics and John Maynard Keynes in England advocated public works as acure for unemployment and a way to overcome the Great Depression. Countercyclical fiscal policy was seen as a feasible strategy to attenuate the phases ofthe economic cycle and was advocated on the basis of market rigidities and theimpotency of monetary policy.By the end of the decade both Chicago economists and Keynes had departedfrom this fiscal policy stance. The former became concerned with the inflationaryconsequences of expansionary fiscal policies, especially when there was thetemptation to implement them pro cyclically. Ultimately, fiscal issues wereovershadowed by monetary policy concerns.Keynes remained an advocate of counter cyclical fiscal policy but recantedfrom the instruments he had proposed earlier to combat economic fluctuations.Using the framework he developed in the General Theory (1936), he extendedthe division of income (consumption) and non-income (investment) relatedcategories to the governments budget. Thus, Keynes distinguished between acurrent (government consumption) and a capital (government investment) budget.The current budget was to be in balance or show a surplus to finance the capitalbudget, which in turn played the fundamental stabilizing role. This allowed himto advance two different concepts of fiscal policy, capital and deficit budgeting.Capital budgeting, to which he adhered under the assumption of capital scarcity,meant rejecting the short-term stabilization tools associated with deficit budgeting(public works and the use of taxation to alter consumption patterns). Once thecapital saturation point was reached fiscal policy could change its focus frominvestment to consumption and perhaps from capital to deficit budgeting. 2003 artículo científico 0185-1667 https://www.redalyc.org/articulo.oa?id=60124601 en http://www.redalyc.org/revista.oa?id=601 Investigación Económica application/pdf Universidad Nacional Autónoma de México Investigación Económica (México) Num.246 Vol.LXII