Debts and Deficits in Alternative Macroeconomic Models

Ever since Keynes challenged the classical automaticity approach to macroeconomics, the economics profession has been engaged in a prolonged debate over the appropriate roles of monetary, fiscal, debt and exchange rate policies in economic management. In the two decades following the publication of the General Theory, Keynesian views were predominant in macroeconomic theory and economic policy. Classical views, however, were sustained by the abortive Keynesian prediction of a post-war depression. Control of inflation became a major objective of macroeconomic policy.