Fine tuning the economy with activist stabilization policy

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Whether the Federal Reserve and the government should attempt to "fine-tune" the economy-smooth almost every fluctuation in GDP or inflation- with stabilization policy, or, instead, should focus on long-run objectives, such as low inflation or steady economic growth, and restrict the use of activist policy to fighting major downturns in the economy.

Does the reality that the Fed and the government must rely on "real-time data" that is subject to revisions weaken or strengthen the argument against fine-tuning the economy with activist stabilization policy? Explain.

Reference no: EM131302661

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