[1] The established methodological approach to macroeconomic research was primarily defended by economists at the universities and other institutions near the east and west coasts of the United States.
[1] More than anything else it was a methodological disagreement about to what extent researchers should employ the theory of economic decision making and how individuals and firms interact in markets when striving to account for aggregate ("macroeconomic") phenomena.
An implication of saltwater economic theory was that the government has an important role to play in order to actively and discretionarily stabilize the economy over the business cycle through striving to fine-tune "aggregate demand".
[5] Researchers associated with the "saltwater school" found that government economic policies are of utmost importance for both the economy's abilities to respond to shocks and for its long-term potential to provide welfare to its citizens.
Most researchers that have been associated with the "freshwater school" have, however, found it hard to identify mechanisms through which it is possible for governments to actively stabilize the economy through discretionary changes in aggregate public spending.
[7] "Saltwater Keynesian economists" argue that business cycles represent market failures, and should be counteracted through discretionary changes in aggregate public spending and the short-term nominal interest rate.
However, it does not follow from these findings that governments can effectively mitigate business cycles fluctuations through discretionary changes in aggregate public spending or the short-term nominal interest rate.