Is the Keynes concept of fine tuning an economy in economic disturbances still relevant?

山本太郎もMMTを見捨てたようだ。インフレを止める手段がないから。「インフレは税で止める」というが、山本のようなバカな政治家が多いから増税はできない。 https://t.co/RmRmJtHl5t

— 池田信夫 (@ikedanob) February 2, 2022

Is the Keynes concept of fine tuning an economy in economic disturbances still relevant?

Gene Chamson

, MBA from University of California, Berkeley

Answered Mar 30, 2021

Clearly it is, because the US government authorized some $5 trillion in new spending last year in an attempt to stimulate demand and boost the economy to counteract the effects of Covid shutdowns.

The problem with following Keynesian ideas is that the government seems only interested in following the spending part.

Keynes’ theory directed the government to spend money (deficit spending if necessary) to stimulate a contracting economy. And then to increase taxes and reduce spending during economic good times so as to generate a surplus to be used during the next downturn.

The problem is that there is a lot of incentive for politicians to increase spending, and little incentive to reduce it.

The result seems to be a state of permanent deficit spending, which is ultimately unsustainable. But every leader hopes the music won’t stop during their term.

The Concise Encyclopedia of Economics

Keynesian Economics

by Alan S. Blinde

 This does not mean that Keynesians advocate what used to be called fine-tuning—adjusting government spending, taxes, and the money supply every few months to keep the economy at full employment. Almost all economists, including most Keynesians, now believe that the government simply cannot know enough soon enough to fine-tune successfully. Three lags make it unlikely that fine-tuning will work. First, there is a lag between the time that a change in policy is required and the time that the government recognizes this. Second, there is a lag between when the government recognizes that a change in policy is required and when it takes action. In the United States, this lag is often very long for fiscal policy because Congress and the administration must first agree on most changes in spending and taxes. The third lag comes between the time that policy is changed and when the changes affect the economy. This, too, can be many months. Yet many Keynesians still believe that more modest goals for stabilization policy—coarse-tuning, if you will—are not only defensible, but sensible. For example, an economist need not have detailed quantitative knowledge of lags to prescribe a dose of expansionary monetary policy when the unemployment rate is 10 percent or more—as it was in many leading industrial countries in the eighties.

歴史については触れていないが、技術的な困難さには触れている。

政策変更の時期、その時期を政府が認識する時期　政府が認識した時期と現実に政策を実行する時期、実行する時期と経済的効果が現れる時期・・・の間に時差があるため政府による微調整はうまくいかないだろう、と。 ただし、失業対策のための拡張金融政策など安定化政策について大雑把な調整はできるかも・・・と