How Fiscal Policy Affects the National Economy

The following sections are included:

• Fiscal Policy: An Introduction

• Fiscal Policy and Aggregate Demand

  • Fiscal policy in a closed economy

  • Fiscal policy in an open economy

    • Open economy with limited capital mobility and flexible exchange rate

    • Open economy with perfect capital mobility

    • Impact of budget financing

    • Other factors affecting the impact of fiscal policy

  • Fiscal policy in countries with limited credibility

• Fiscal Policy and the Supply Side

• Fiscal Policy and the Balance of Payments

• The Interaction between Fiscal and Monetary Policy

• Using Fiscal Policy for Macroeconomic Management

  • Relative effectiveness of tax and spending policies for adjustment

  • Using fiscal policy to promote economic growth

• Limitations on Fiscal Policy

• Summary