The Relevance of Keynesian Theory During the COVID-19 Health Crisis

Abstract

Introduction: This article analyzes the importance of Keynesian theory during the global health crisis of COVID-19, focusing on the fiscal policies implemented in Colombia. Objective: To analyze how the expansive fiscal policies implemented by the Colombian government helped mitigate the negative effects of the recession. Methodology: A qualitative approach was adopted, based on document review and analysis of government and international organization reports. Results: Although the government increased public spending and provided support such as subsidies to businesses and vulnerable households, public investment was limited compared to other economies in the region. Additionally, pro-cyclical fiscal policies at the subnational level heightened the effects of the crisis in various regions of the country. Conclusion: The health crisis highlighted the need for more flexible and expansive fiscal policies aligned with Keynesian principles to ensure a sustainable economic recovery.