It is not about calling for large public investment projects, new subsidies or additional tax benefits for companies. The public sector is expected to be a regulator and to ensure the level-playing field, allowing relative prices to play their signalling role. It is also expected to introduce the reforms needed to ensure that the labour and product markets adjust efficiently to an ever-changing world.
See Christopher J. Waller (2023), “The Unstable Phillips Curve,” speech delivered at Macroeconomics and Monetary Policy, a conference sponsored by the Federal Reserve Bank of San Francisco, San Francisco, Calif., March 31, https://www.federalreserve.gov/newsevents/speech/waller20230331a.htm. 7  -9The implication is that unemployment has to increase a lot to bring inflation down by a small amount.