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Fiscal space is the flexibility of a government in its spending choices, and, more generally, to the financial well-being of a government. [1] Peter Heller (2005) defined it “as room in a government’s budget that allows it to provide resources for a desired purpose without jeopardizing the sustainability of its financial position or the stability of the economy.” [2]
Neutral fiscal policy is usually undertaken when an economy is in neither a recession nor an expansion. The amount of government deficit spending (the excess not financed by tax revenue ) is roughly the same as it has been on average over time, so no changes to it are occurring that would have an effect on the level of economic activity .
Many public policy experts prefer the notion of "vertical fiscal asymmetry" —coined and conceptualised by Sharma (2011) [5] —over its alternative "vertical fiscal imbalance" because the former is relatively neutral [6] [7] and highlights the unfeasibility of a balance or symmetry purporting to eliminate any kind of vertical fiscal asymmetry ...
The budget went from a $236 billion surplus in fiscal year 2000 to a $413 billion deficit in fiscal year 2004. In fiscal year 2005, the deficit began to shrink due to a sharp increase in tax revenue. By 2007, the deficit was reduced to $161 billion; less than half of what it was in 2004 and the budget appeared well on its way to balance once again.
The holy grail of macroeconomics is full employment along with price stability, which implies highly efficient use of resources while controlling price level. In the first place, Modern Monetary Theory (MMT) rejects the monetarist explanation virtually in toto, arguing that it is based on an incorrect view of actual operations of the Treasury, central bank, and commercial banking, and how they ...
Sometimes Congress raises the debt ceiling quietly, and sometimes lawmakers use the occasion to engage in a noisy debate over fiscal policy before raising the cap at the last possible moment.
To quantify the fiscal burden and to draw comparisons of different countries, the concept of "fiscal burden of government ratio" is used. Calculated according to certain methodologies, it basically means that the lower the score, the lower the involvement of the government in the economics of the country.
Fiscal capacity is the ability of the state to extract revenues to provide public goods and carry out other functions of the state, given an administrative, fiscal accounting structure. [1] In economics and political science , fiscal capacity may be referred to as tax capacity, extractive capacity or the power to tax, as taxes are a main source ...