Schools of macroeconomic thought differ widely in their policy preferences to achieve social optima. A broad chiasm exists between Keynesians and neoclassical economists with respect to monetary policy and fiscal policy preferences. While the following description is a summary, it will suffice to illustrate how different views on ergodicity explain the differences in these schools of thoughts.
Keynesians and allies believe that there are economic conjectures whereby monetary intervention can generate real growth (situations where the output gap is significant and inflation is below target for example). Neoclassical economists and their monetary allies believe that the gravity of market forces is so powerful that monetary surprises cannot yield real economic benefits.
On the monetary debate, neoclassical economists & monetarists believe that economies are ergodic as market forces ensure price adjustments that maintain the economy at potential at most times and thus any gains due to a monetary surprise today will be balanced by a price change that will annihilate those nominal gain. Keynesians and allies believe that a short-term gain will forever alter the development path of an economy, hence initial conditions matter. Depending on each perspective the economy either has a long run steady state or a path that can be altered at each short-term junction. While neoclassical economics believes in the ergodicity of economic systems, Keynesians and associates believe in path dependence.
With respect to the fiscal debate, neoclassical economists believe that changes in government expenditures cannot efficiently modulate economic activity and change potential output because agents’ behaviour is altered by the expectations of a balancing fiscal change in the future. Since the government must over time keep a reasonable balance, a tax cut that leads to a deficit heralds higher future taxes and leads agents to save the tax cut (Ricardian equivalence). Keynesians on the other hand feel that short-term stimuli may create a boost in the economy’s growth path whose value exceeds the amount of the stimulus.
Who should we believe? Both schools of thought have a point. Unlike natural systems ergodicity does not apply always and everywhere with the same power. The challenge of wise economic management lies in the ability to recognize with a certain degree of certainty when a change in expected policy can yield positive results from those instances where a change in policy simply changes the timeframe of economic consequences.