Neo-Liberal Economic Policy

Neo-Liberal Economic Policy

Critical Essays

Edited by Philip Arestis and Malcolm Sawyer

Over the past two decades there has been a prevailing shift in economic policy in many countries. This reflects the continuing rise of neo-liberalism – the doctrine that economic policy should ‘leave it to the market’ and that governments should retreat from market intervention. This book provides a balanced and comprehensive appraisal of these important policy developments. The authors examine the most notable trends in neo-liberal economic policy such as the withdrawal from the use of fiscal measures and the reliance on monetary policy. They discuss the neo-liberal view that the causes of unemployment lie in the operation of the labour market, in particular its inflexibility. They also assess the increasing inclination towards the liberalisation and deregulation of markets, most notably financial markets.

Chapter 5: The economic policy in Spain during the decades of the 1980s and the 1990s

Jesus Ferreiro and Felipe Serrano

Subjects: economics and finance, post-keynesian economics


Jesus Ferreiro and Felipe Serrano INTRODUCTION The government of the Socialist Party (Partido Socialista Obrero Español, PSOE) came to office in November 1982 and left in March 1996, when the elections were won by the Partido Popular, a right-wing Christian democratic party. During those 14 years, the economic policy of the different Felipe González administrations focused on two objectives. From a macroeconomic point of view, the entire strategy focused on the control of inflation. The problem of mass unemployment was subordinated to this main objective. Such a strategy was coincidental with the dominant strategies implemented in other Western economies. In this chapter we shall not analyse whether the adoption of this strategy was due to an ideological change within the Socialist Party which took place after they came to power or because it was the only strategy that could be implemented effectively. It is likely that both explanations have some validity. It should not be forgotten that during this period the Socialist Party suffered serious internal conflicts because of the strategy of economic policy supported by members of the government. From a long-term perspective, the general orientation of its economic policy was a response to two objectives: one with an ambiguous definition and difficult to measure and the other deeply rooted in the classic European social democratic tradition. The former was related to the idea of modernization, that is, of social and economic adaptation to the changes which arose as a result of...

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