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Careful coordination to avoid overdoing

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Reference no: EM131936031

Since it takes time for monetary or fiscal policy to have an impact, is it faster to do nothing?

Using the policies together to "fix" the economy makes sense, but would require careful coordination to avoid "overdoing" it. And there are times when using them together could be disastrous; as right now. The Administration's tax cuts are strongly expansionary, so the Fed is watching carefully for signs of imminent inflation so they can start contractionary monetary policy to keep the economy under control . And if anyone knows someone who's crystal ball can accurately predict significant economic events, please get them to work, fast!

In the meantime, what alternatives do we have to the monetary and fiscal policy concepts in terms of avoiding or correcting economic disasters?

Reference no: EM131936031

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