Let us, just for the sake of argument, agree with Keynesian economists. It is possible for the economy to get stuck at a non-optimal equilibrium. Government can then – should then – shock the economy to an optimal equilibrium through intervention.
The underlying method here being to stimulate demand in the economy. This involves increasing the budget deficit (for MMT types, print more money and spend it) by either spending more money or cutting taxes. The usual preference is to go build infrastructure because multipliers.…See More