One issue that was not discussed in the previous article regarding fiscal policy relates to the timing of fiscal policy. Since Congress authorizes spending, a criticism of fiscal policy has been that it may not be quickly responsive to economic problems. However, this concern is ameliorated by the fact that we have implemented various policies that are designed to vary with economic conditions.
What are monetary policy and fiscal policy, and how do they differ? In this multi-part series, we’ll define these two types of economic policy, and explain their implementation and efficacy. With a little history to provide context and help you understand not just what these policies are, but their impact on our lives, this series gives a deeper understanding of MMT, and economic policy in general!