question

question

by Josephine Fritcha -
Number of replies: 1

does a keynesian system absolutely need a government, or can it be another controller?

In reply to Josephine Fritcha

Re: question

by Danny Weaver -
For the expansionary fiscal policy, in theory the central bank could skip the middle man of a government treasury and spend money on whatever projects it deems worthy of a stimulus. That said, a central bank wouldn't have a means to perform contractionary fiscal policy since that is done through raising taxes. I should point out, central bank that could spend the currency it creates would most likely fail in the market since market participants wouldn't want to trade in a currency of which the value is beholden to private interests (and not beholden to a democratic constituency).

This was a fun thought experiment. Thank you Josie!