ABSTRACT
The end of the long boom was accompanied by a collapse of confidence in Keynesian theory and policy proposals. A prominent Keynesian recently described these developments by pronouncing that ‘Keynesian economics has now reached middle age’ (Akerlof, 1979, p. 219). Keynesian macroeconomics, centred on demand management policies designed to produce rapid and stable rates of output growth and high employment levels, is in some senses the establishment now under heavy attack from two well-articulated schools of thought advocating a return to laissez faire policies by the state. Macroeconomics during the Keynesian era was a subject concerned with the efficient exercise of state control or influence over key macroeconomic variables. Today it has become a dismal science emphasising the factors on the supply side of the economy which impair, or totally inhibit, the state’s ability to manage the capitalist economy using macroeconomic tools.
