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One of the major issues in macroeconomics is disagreement in the debate over policy activism versus policy rules What exactly is that disagreement Any implications?
Wiki User
∙ 12y ago
This disagreement stems from differing views on government intervention in the economy. Policy activism requires that the monetary and fiscal policy be used in such a way as to improve the economy. This type of reasoning dates back to Keynes, who believed that the economy sometimes needs government help to avoid stagnation. Policy rules require instead that the government use such things as a constant-growth-rate policy so as to accommodate economic growth, but not to attempt to stimulate it. In other words, the economy is best left to its own devices, and government intervention causes more problems than it solves.
Wiki User
∙ 12y ago
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