Looking back

Abstract

In the closing chapter major arguments and conclusions are stressed. First, monetary policy is considered. It is highlighted that monetary policy in new classical macroeconomics is not an efficient countercyclical instrument, though it can contribute to such efforts of fiscal policy. Then, lessons from fiscal policy are summarized, according to which there are circumstances under which fiscal policy can be applied as an efficient countercyclical device. Both monetary and fiscal policy are mentioned in a context that new classicals, as it was argued in the preceding chapters, were interested not only in arguing for the complete inefficiency of economic policy in the context of countercyclical control, but also in defining the precise conditions necessary for this inefficiency. If these crucial conditions do not hold, economic policy may be effective again. Thanks to new classical macroeconomics, theoretical knowledge on the scope of economic policy control is highly improved. Finally, some further remarks are made as regards economics as pure science, citing the distinction between theoretical models as surrogate and substitute systems.