Policy is Policy, Economy is Economy, And (Sometimes) The Twain Shall Meet
Economist Arnold Kling gets skeptical about the extent to which monetary or fiscal policy can have predictable and expected effects on the macroeconomy:
The empirical basis for the belief that government can do something about output and employment is quite thin. If you really want to believe that, say, fiscal policy works, you can focus on those examples where it appeared to work (say, military spending in World War II and the Kennedy tax cut in the early 1960's) and try to explain away all the examples where it appeared to fail (which is pretty much every other time and place that it has been tried).
My father used to say that the First Iron Law of social science is, "Sometimes it's this way, and sometimes it's that way." My reading of the record on fiscal and monetary policy is that it follows the First Iron Law. Sometimes, we see economic improvement when fiscal expansions are attempted. Sometimes we don't. The same with monetary policy expansions. I think it is reasonable to read history as saying that economic outcomes are pretty much orthogonal to macroeconomic policy moves, which is a fancy way of saying that the economy does what it does without regard to fiscal and monetary policy.
The economy (that is, five billion people's decisions about what to do, choose, work at, save, invest, consume): shockingly, it's complicated stuff.
