"The use of government revenue expenditures to influence macroeconomic variables developed in reaction to the Great Depression of the 1930s, when the previous laissez-faire approach to economic management became unworkable."
Fiscal policy refers to the use of government spending and taxation to influence economic activity. This topic covers the goals of fiscal policy, its mechanisms and how it works in practice.
What is Fiscal Policy?: An introduction to fiscal policy, its definition, and its purpose.
Classification of Fiscal Policy: Different types of fiscal policies and their significance in the economy.
Tools of Fiscal Policy: Instruments used by governments to implement and control fiscal policy.
Objectives of Fiscal Policy: The goals of fiscal policy, such as stabilization, economic growth, and reducing inflation.
Impact of Fiscal Policy: The effect fiscal policy has on the economy, including taxes, government spending, and borrowing.
The Role of Government: The role of government in fiscal policy, including its responsibility to manage the economy.
Implementation of Fiscal Policy: The procedures and techniques used to implement fiscal policy.
Fiscal Policy and Business Cycles: The relationship between fiscal policy and business cycles, including phases of booms and busts.
Fiscal Policy and Inflation: The impact of fiscal policy on inflation and its relationship to monetary policy.
Fiscal Policy and International Trade: How fiscal policy affects international trade, tariffs, and agreements.
Fiscal Policy and Income Distribution: The impact of fiscal policy on income distribution and inequalities.
Criticisms of Fiscal Policy: The flaws and criticisms of fiscal policy, including political constraints and unintended consequences.
Fiscal Policies around the world: An overview of the fiscal policies of different countries and their impact on their respective economies.
Future Prospects of Fiscal Policy: Potential changes and challenges that may impact fiscal policy in the future.
Stabilization: This refers to the use of fiscal policy tools to stabilize the economy by influencing aggregate demand and targeting specific economic goals.
Redistribution: This role of fiscal policy emphasizes the redistribution of income and wealth through taxation and government spending programs aimed at reducing income inequality.
Allocation: Fiscal policy can be used to allocate public resources to meet specific societal needs, such as infrastructure spending, education, health care, and national defense.
Macroeconomic stabilization: This role focuses on the stabilization of the business cycle, the reduction of inflation or unemployment, or both. The goal is to promote stability in the economy and reduce the impact of economic shocks.
Automatic stabilization: This refers to the ability of fiscal policy tools to automatically adjust to changes in economic conditions. Examples include progressive taxes, unemployment benefits, and social welfare programs.
Counter-cyclical policy: This role involves using fiscal policy tools to counteract business-cycle fluctuations. This can involve increased government spending and tax cuts during periods of economic downturns and the opposite during times of economic growth.
Fiscal sustainability: This role focuses on the long-term financing of government spending programs, balancing the budget, and ensuring the financial stability of the government.
Public investment: This role involves using government spending to invest in public goods and services such as education, infrastructure, and technology. This type of spending can promote long-run economic growth and development.
"Fiscal policy is based on the theories of the British economist John Maynard Keynes, whose Keynesian economics theorized that government changes in the levels of taxation and government spending influence aggregate demand and the level of economic activity."
"Fiscal and monetary policy are the key strategies used by a country's government and central bank to advance its economic objectives."
"Changes in the level and composition of taxation and government spending can affect macroeconomic variables, including: - Aggregate demand and the level of economic activity - Saving and investment - Income distribution - Allocation of resources."
"Fiscal policy deals with taxation and government spending and is often administered by a government department; while monetary policy deals with the money supply, interest rates and is often administered by a country's central bank."
"It is designed to try to keep GDP growth at 2%–3% and the unemployment rate near the natural unemployment rate of 4%–5%. This implies that fiscal policy is used to stabilize the economy over the course of the business cycle."
"The previous laissez-faire approach to economic management became unworkable during the Great Depression of the 1930s."
"Fiscal policy is used to stabilize the economy over the course of the business cycle."
"Fiscal policy is based on the use of government revenue collection (taxes or tax cuts) and expenditure to influence a country's economy."
"Fiscal policy is based on the theories of the British economist John Maynard Keynes, whose Keynesian economics theorized that government changes in the levels of taxation and government spending influence aggregate demand and the level of economic activity."
"Inflation is considered 'healthy' at the level in the range 2%–3%."
"Fiscal policy is designed to increase employment."
"The unemployment rate near the natural unemployment rate of 4%-5% is targeted by fiscal policy."
"Both fiscal and monetary policies influence a country's economic performance."
"The use of government revenue expenditures to influence macroeconomic variables developed in reaction to the Great Depression of the 1930s."
"The previous laissez-faire approach to economic management became unworkable during the Great Depression of the 1930s."
"Fiscal policy can affect macroeconomic variables, including aggregate demand and the level of economic activity, saving and investment, income distribution, and allocation of resources."
"Government revenue collection (taxes or tax cuts) and expenditure are the primary tools of fiscal policy."
"Fiscal policy is often administered by a government department."
"Fiscal policy deals with taxation and government spending, while monetary policy deals with the money supply and interest rates."