Originally Posted by Gatordoc50
Since the Fed is using a Keynesian approach to fiscal policy
Indeed. Pesky Keynesians and related modern neoclassic economists tend to do things like measure, analyze, and try to formulate quantitative results. I don't know why an organization managing monetary policy would be interested in something like that.
(BTW, the Fed handles monetary policy. Congress handles fiscal policy, such as it is, and sets mandates for the Fed's goals in monetary policy.)
I've always found a strict Austrian school interpretation to be much more entertaining. The Austrian school leans toward strict methodological individualism, treating all economic actors as efficient and logical individual agents, and deriving economic theory as a logical extension of basic principles of human action. They would have loved Star Trek's Mr. Spock. (For similar reasons, the Austrian school of economics is much loved in libertarian political circles.)
The Austrian school's focus on logical human actors leads to some interesting bits in their economic philosophy.
[*]Testability of economic hypothesis is virtually impossible, since attempting to measure the responses of human actors alters their actions.[*]Since an Austrian economic hypothesis is not testable, the Austrian school relies on the power of deduction and a priori reasoning. This puts the school well outside the realm of science, which is founded on testable hypothesis.[*]Econometrics and mathematical analysis, being based on mere empirical data and not derived as a logical extension of basic principles of human action, are rejected.
I'm not sure how useful an economic school that rejects quantitative analysis and measurement can be in the real world. It is amusing to see people using an economic philosophy that believes measurement and intervention are futile to argue points about measurement and intervention policy.
Samuelson, Paul A. (Sep 1964). "Theory and Realism: A Reply". The American Economic Review (American Economic Association): 736739.
Caplan, Bryan. "Why I Am Not an Austrian Economist"
. George Mason University