Macroeconomic policies come from the “vision” of the ways in which an economy works. A “vision” of the economy where unemployment is a frequent occurrence gives rise to quite different policies from a “vision” of the economy in which there is little room for unemployment of labor, as, for example, in the New Classical macroeconomics. The macroeconomic vision that underlies the policy agenda of this chapter is described as Kaleckian-Keynesian, as it draws on the works and ideas of Michal Kalecki and John Maynard Keynes and others that approach the matter in a similar fashion. This chapter explores a modern Kaleckian-Keynesian framework for economic theory and policy. It first discusses fiscal policy, the main instrument of macroeconomic policy, before turning to monetary policy as well as financial policy, inflation, and policies that relate to product markets and labor markets.
The role of labor markets for euro area monetary policy
