ABSTRACT
The Keynesian model has thus far been developed on the assumption that no government exists. The model, however, suggests ways in which government policy might influence the economy in attempting to achieve full employment. Fiscal policy was at first considered to be the main instrument with which to achieve this objective. In the post-war period the concentration on fiscal policy came to be considered too narrow, and the analysis developed into a theory of economic policy, including both fiscal and monetary instruments.
