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New keynesian age

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DISCUSSION PAPER
Back to the Future:
A New Keynesian Age
Mustafa Metin Başbay

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DISCUSSION PAPER Back to the Future: A New Keynesian Age Mustafa Metin Başbay DISCUSSION PAPER Back to the Future: A New Keynesian Age Mustafa Metin Başbay Back to the Future: A New Keynesian Age © TRT WORLD RESEARCH CENTRE ALL RIGHTS RESERVED WRITTEN BY Mustafa Metin Başbay PUBLISHER TRT WORLD RESEARCH CENTRE July 2020 TRT WORLD İSTANBUL AHMET ADNAN SAYGUN STREET NO:83 34347 ULUS, BEŞİKTAŞ İSTANBUL / TURKEY TRT WORLD LONDON PORTLAND HOUSE 4 GREAT PORTLAND STREET NO:4 LONDON / UNITED KINGDOM TRT WORLD WASHINGTON D.C. 1819 L STREET NW SUITE 700 20036 WASHINGTON DC www.trtworld.com researchcentre.trtworld.com The opinions expressed in this discussion paper represent the views of the author(s) and do not necessarily reflect the views of the TRT World Research Centre. 4 Back to the Future: A New Keynesian Age Introduction I n developed economies, we are witnessing a return of the ‘old’ Keynesian economic doctrine that had long been declared dead. In the context of the Covid-19 crisis, governments are once again turning to aggregate demand policies of Keynesian nature. They are assuming responsibility to revive growth and improve employment and income outcomes, and weaponising the state’s massive spending powers to that end. The British economist’s policy prescriptions, which he developed in the aftermath of 1929 Great Depression, seem quite relevant to the current situation in most developed economies. Keynes suggested that in an economy whe ...
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