Fine tuning is attributed to American economist Walter Heller (1915-1987), and is used to refer to a short-run interventionist approach to the economy using monetary and fiscal policies to control fluctuations in demand.
A popular policy of British governments from 1945 to 1970, it involved altering fiscal policy continually to stabilize national income as close to its full-employment potential as possible.
However, studies of the fine tuning policies in Britain during the 1950s and 1960s have shown little, if any, success. The main problem with fine tuning the economy is the difficulty of accurately gauging the magnitude and timing of fluctuations in demand.
Also see: demand theory
W W Heller, New Dimensions to Political Economy (New York, 1967)