Naslov (eng)

The Challenges of the COVID-19 Pandemic to Mainstream Macroeconomics and Neoliberalism

Autor

Praščević, Aleksandra

Publisher

Opis (eng)

Abstract: The paper focuses on challenges which COVID-19 pandemic imposes on mainstream macroeconomics and neoliberalism. It is not a new fact that the economic recessions generate great changes both in macroeconomic theories and policies. This claim is supported by the fact that the emergence of macroeconomics was strongly connected with the economic conditions in the interwar period, especially of the Great Depression, the 1930s. The first, Keynesian era in the macroeconomics was guided by the Keynesian idea of handling business cycles by using aggregate demand management and active economic policy. The second phase in the development of macroeconomics was also generated by the recession, however atypical with persistently high inflation and high unemployment (“stagflation” decade of the 1970s). Thus, began a new era of monetarist domination of macroeconomics with the victory of the political forces of the New Right, which brought neoliberalism to the global political and economic scene, with the ideas of a strong, but small state. Finally, the New Consensus Macroeconomics (or the New Neoclassical Synthesis) which combined perceptions from both approaches (New Classical and New Keynesian) and still propagating neoliberalism and globalism, has emerged during the period of Great Moderation. The foregoing New Consensus and the neoliberal paradigm have been seriously challenged by the Great Recession, 2007-09. However, both survived with slight modifications connected to financial sector management. Yet, the atypical recession generated by the pandemic of COVID-19 and following health crisis, stroke the mainstream macroeconomics and the position of dominant neoliberalism, again. This time, the primary task of macroeconomics is to forecast the effects of various economic policy measures currently being conducted by policy makers around the world, as well as to forecast the duration and severity of the recession caused by the pandemic. Of course, the often-present question about the sustainability and superiority of the neoliberal approach to the organization of economic and social life, now with COVID-19 pandemic get new aspects with an uncertain perspective.

Jezik

engleski

Datum

2021

Licenca

© All rights reserved

Predmet

Keywords: New Consensus Macroeconomics, neoliberalism, economic policy

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Ekonomski fakultet