This paper argues that the Covid-19 crisis will accelerate the major policy transformation already underway in developed economies towards a Keynesian framework.

M. Metin Başbay 21 July 2020

This paper argues that the Covid-19 crisis will accelerate the major policy transformation already underway in developed economies towards a Keynesian framework. First, it summarises the long-hold discussion between those who supported unregulated free markets and those who believe in the necessity of government intervention and regulation. Second, it introduces the theoretical bases for the argument that governments in developed economies should intervene in their economies to keep them healthy in the current situation. Third, it discusses the spending packages proposed in the US, the UK and Eurozone based on what we know about them so far. It concludes that the new Keynesianism is likely to live on and bring about what it promises.

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