Fiscal Policy & Keynesian Economics
- Waymaker Module: Fiscal Policy
Video Lecture Clips:
- Classical Economics
- The Great Depression
- Keynesian Economics
- Intro to Fiscal Policy – Part 1
- Intro to Fiscal Policy – Part 2
- Intro to Fiscal Policy – Part 3
Additional Readings: (Check these for fiscal policy / Keynesian references)
- Heilbroner, Chapter 6? “The Great Depression”, Chapter 7? “The Rise of the Public Sector”, and Chapter 9? “The Golden Age of Capitalism” (I numbered the chapters with ?-marks since the numbers may depend on which edition you have.)
- Blinder, Chapters 2 – 3
- Friedman and Friedman, Chapters 3, 4, 9 and 10
- Schultze, Memoranda 12, 15-19, and 29
- You should be able to define a recessionary gap, and an inflationary gap.
- You should be able to explain graphically how the tools of fiscal policy work.
- You should be able to explain the difference between fiscal & monetary policy.
- You should be able to explain the difference between discretionary fiscal policy and automatic stabilizers.
- You should be able to explain the fundamental characteristics of Keynesian Economics, and differentiate them from other schools of thought.
- You should be able to explain and show graphically how fiscal policy from a Keynesian perspective can be used to correct recessionary and inflationary gaps.
- You should be able to explain the concept of the expenditure multiplier.