Political Science 2211E Chapter Notes - Chapter Mcbride and Shields: Neoliberalism, Statism, Benefit Shortfall

• School: Western University
• Department: Political Science
• Course: Political Science 2211E
• Professor: Adam Harmes

Document Summary

A version of keynesianism was officially adopted in ottawa by 1945, thereafter policy discourse took place in keynesian terms and full employment was a legitimate goal of economic policy. Macro policy includes fiscal and monetary policies as well as the occasional use of other instruments, such as comprehensive wage and price controls. Mo(cid:374)etary poli(cid:272)y (cid:272)o(cid:374)sists of the state(cid:859)s efforts to (cid:272)o(cid:374)trol or i(cid:374)flue(cid:374)(cid:272)e (cid:448)aria(cid:271)les su(cid:272)h as money supply, interest rates and exchange rates. Fiscal policy pertains to the states powers of taxation and spending, and the balance between them, expressed in budget deficits or surpluses. Neo liberal governments are ideologically committed to expenditure restraint and deficit reduction. Apart from revenue shortfall the main cause of increased deficits has been high real interest rates resulting from monetary policy. High real interest rates perform a classic accumulation service in that they protect and even expand the value of money, a result that particularly benefits creditors and the rich.