A critique of pragmatic "Keynesianism"

This paper responds to Alan Penna's pragmatic critique of Keynesianism by focusing on the key conditions that he argues must come together for traditional policies of fiscal expansion to have sustainable effects. In opposition to Penna, it argues for a clear linkage between neoliberal ideology and opposition to Keynesian economic policy. However, it also identifies a problem of observational equivalence for those holding to Penna's critical position and those questioning traditional Keynesian policies from a modem money perspective. In each case, limitations applying to conventional policies of demand management are identified. Where Penna, by his own logic, would be forced to abandon policies designed to achieve full-employment, modem money theorists instead argue for alternative approaches that overcome these limitations.