Conclusion

Abstract

From the mid-1960s Keynesianism clearly began to fall out of fashion in the academic world, and though this process may now be beginning to reverse itself, the influence of Keynesian ideas on policy-makers is as low as it has ever been since 1945. Nowadays there is a general fatalism about macroeconomic questions and a widespread belief that a policy of fiscal expansion cannot achieve very much to reduce unemployment. The experience of the Socialist Government in France, which attempted to expand in isolation and fairly quickly had to backtrack and introduce an austerity package, has reinforced such beliefs, although in today’s highly integrated world the chances of success for an individual country which bucks the general trend towards deflation are far lower than for an international policy shift, because of the tendency to suck in imports and the interactions between monetary policy, expectations, exchange rates and inflation.