Author(s): Jeff Richter
This article explores the role of fiscal policy in influencing economic growth, providing a comprehensive macroeconomic assessment of its effects. Fiscal policy, through government spending and taxation, serves as a critical tool for managing economic activity and promoting sustainable growth. The analysis focuses on how expansionary and contractionary fiscal policies impact economic performance in both the short and long term. The article examines the channels through which fiscal policy affects aggregate demand, investment, and productivity, while also considering potential challenges such as budget deficits and public debt. The discussion concludes that while fiscal policy can effectively stimulate growth, its success depends on the timing, composition, and sustainability of fiscal measures