fiscal policy (1 Viewer)

[Blondie]

what are the objectives of FP? i mean, MP's objective is sustained level of uninflationary growth, right. so whats FP's??

 

[saves.the.day]

Fiscal policy is to achieve internal stability I think. I guess the contractionary/expansionary policies are aimed at affecting economic growth then.

 

[Blondie]

so by affecting the level of growth, inflation & unemployment can be managed? yeah, that makes sense. thanks

 

[timmii]

yep yep..my mistake..internal balance...

 

[symo]

i thought it had shifted towards an internal role. ie external between 96 and 99 then to internal... or has it changed again?

 

[krayziekarnevil]

To achieve a balanced budget over the economic cycle

 

[meh]

the role of fiscal policy is clearly set out

1. the reallocate resources
2. to redistribute income
3. Stabilise economy (counter cuclical action)

it works both for internal and external stability - particularly in the are of public sector debt (now trying to minimise it and encourage saving)

the CURRENT objective of fiscal is to achieve balanced budget, on average, over the the course of the business cycle

 

[rukawasan]

alrite... im not too sure bt this... but i think fiscal policy is kinda like a counterbalance to monetary policy in the last decade or so...

monetary policy's the 'swing arm' policy of govt macro... n its been damn effect even tho its a lil overdone sometimes... like way too preemptive, so fiscal policy kinda makes up for it by balanceing it out... eg when govt adopted an expansionary mp they would have a little budget surplus so that inflation dosnt get outa control. like rite now... even tho mp's tightened to 5%, its still expansionary, (i think cos anthing under 5.5% is considered expansionary if inflation is kept withint the target range), so budget is in balance, well a little surplus to balance it...

ergh... wot do u think