CZ:Featured article/Current
Fiscal policy
Fiscal policy encompasses public expenditure, taxation and borrowing. Its essential function is the provision of public goods and services. It is also used to influence social conduct and the distribution of wealth, and to promote the growth and stability of economic activity. It can require a compromise between the objective of maintaining investor confidence in the government's bond issue and the longer term objective of preserving and developing the country's economic infrastructure, its human capital and its social capital.
Introduction: the fiscal stance
A government's fiscal stance is the outcome of multiple choices concerning public expenditure and taxation including, in particular, the choice of the fiscal balance, which is the choice that has to be made between financing expenditure by taxation and financing it by borrowing. The fiscal balance choice is concerned with the resolution of the sometimes conflicting objectives of financial stability and economic growth known as the fiscal dilemma.
| notes |
|---|