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Corresponding Author:
Nicola Acocella, University La Sapienza, Memotef, Rome, Italy

The Current Status of Economic Policy as a Discipline

Volume 75 - Issue 4 - Papers in memoriam of Amedeo Amato, November 2022
(pp. 391-406)
JEL classification: C72; D02; D71; D84; E52; E62; H11
Keywords: Economic Policy; Expectations; Institutions; Social Choice; Strategic Games

Abstract

This paper deals with the strategic theory of economic policy, which has revived the traditional theory of economic policy, while offering a number of new contributions. The importance of the new theory in so far as not only current policies, but also institutions should be underlined. It has important implications for the theory of institutions, both as far as the possibility that different institutions reach a unique equilibrium, multiple equilibria, or no equilibrium at all and because this impinges on choice of a democratic institutional setting within a country or at a world level.

The theory of economic policy in a strategic setting has been of great help in the theoretical debate on policy effectiveness, leading to a critique of the current conviction of policy neutrality, which is skeptical on government intervention.


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