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Fine Tuning

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Abstract

‘Fine Tuning’ was Walter Heller’s phrase for fiscal and monetary actions by government aimed at countering deviations in aggregate demand – forecast or actual – from some target path of output and associated inflation. The idea marked an important change in doctrine. The goal was not merely to smooth out fluctuations, but to track and output-employment/inflation path chosen from the set of attainable paths according to the preferences of the policymaker (see, however, the entry on “Functional Finance”).

This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman

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Bator, F.M. (1987). Fine Tuning. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_11-1

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  • DOI: https://doi.org/10.1057/978-1-349-95121-5_11-1

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  • Publisher Name: Palgrave Macmillan, London

  • Online ISBN: 978-1-349-95121-5

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