The alternatives of the active versus passive view of stabilization policy are usually expressed as

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The alternatives of the active versus passive view of stabilization policy are often framed as discretion versus rules. The active view favors discretion in policymaking, allowing policymakers to respond to changing economic conditions and unforeseen events. In contrast, the passive view favors a rules-based approach, where predetermined policies or simple rules are put in place and left to guide economic activity. The debate between discretion and rules depends on factors such as uncertainty, the effectiveness of policy instruments, and the credibility of policymakers.

The Alternatives of the Active Versus Passive View of Stabilization