countercyclical fiscal policy
Countercyclical fiscal policy refers to government actions that aim to stabilize the economy by adjusting its spending and taxation policies in the opposite direction of the business cycle. In times of economic downturns, countercyclical fiscal policy involves increasing government spending or cutting taxes to stimulate demand and boost economic activity. Conversely, during periods of strong economic growth and inflation, countercyclical fiscal policy involves decreasing government spending or raising taxes to cool down the economy and prevent excessive inflation.
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Related Concepts (16)
- aggregate demand
- automatic stabilizers
- budget deficit
- business cycles
- economic expansion
- economic growth
- economic recession
- economic stabilization
- fiscal policy
- fiscal stimulus
- government spending
- macroeconomic policy
- monetary policy coordination
- public debt management
- taxation policies
- unemployment rate
Similar Concepts
- cyclical deficit
- cyclical unemployment
- expansionary fiscal policy
- fiscal discipline
- fiscal policies
- fiscal policy and government borrowing
- fiscal policy coordination
- fiscal policy debates
- fiscal policy spillovers
- inflationary policies
- macroprudential policy
- monetary policies
- monetary policy
- taxation and fiscal policy
- unconventional monetary policy