Principles of Macroeconomics / Unit 10 MAC 0916 short lesson, about 20 seconds
The Case Against Fine-Tuning
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The idea
Policy takes time at three stages. Recognition, because output data arrive late and get revised. Implementation, because acting takes time. Impact, because the effect on demand arrives later still.
In practice
A typical postwar recession ran about a year, which is short enough for help to arrive afterwards.
Where people slip
The anchor calls the middle stage the legislative lag. Unit fourteen works all three in full.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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