fiscal policy-a comparative study with u
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FISCAL POLICY-ACOMPARATIVE STUDY WITH
U.S
Presented by-
Ankita Nayal (11)
Eeshma Singh (21)Madushmita Ghosh (31)
Shruti Saxena (48)
Sukanaya ()
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WHAT IS FISCAL POLICY?
Fiscal policy is the use of government spending andtaxation to influence the economy.
The main objective of Fiscal Policy: Is to stabilize the economy i.e. to overcome
recession and control inflation in the economy.
Government curb inflation by reducing publicspending and tightening the taxation policy
And for overcoming recession it has to do justopposite.
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TYPES OF FISCAL POLICY
Contractionary
Expansionary
Other type of fiscal policy are Automatic Stabilizers
Discretionary
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HOW DOES IT WORKS
Fiscal policy is based on the theories of British economist
John Maynard Keynes.The governments can influence
macroeconomic productivity levels by increasing or decreasing
tax levels and public spending. This influence, in turn, curbs
inflation (generally considered to be healthy when at a level
between 2-3%), increases employment and maintains a
healthy value of money.
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OBJECTIVE
The objective of the study is to
compare the policies used by both the
U.S.A and Indian government to deal
with Inflation and recession. We will
also study about the tools used by
both the government in different
situation and the problem faced by
them in using those tools.
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COMPARISION OF THE POLICIES USED BY U.S.A
AND INDIA TO TACKLE RECESSION
United states of America At the time of great depression U.S.A used Kyenes Theory and
halted the decline in the economy by increasing spending on itsown or by cutting taxes
But U.S increased public spending beyond the limit and then hadto face inflation.
India Government increased expenditure towards infrastructure andeducational programs.
Reducing taxes increased government spending however, by justreducing taxes government could not fulfill the populations needfor development thats why governmental expenditure waschosen.
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COMPARISION OF THE POLICIES USED BY U.S.A AND
INDIA TO CURB INFLATION
U.S.A The central bank abruptly tightened monetary policy beginning in
1979. This policy successfully slowed the growth of the moneysupply, but it helped trigger sharp recessions in 1980 and 1981-1982
India The government took fiscal measures to control price rise
in essential commodities and inflation has started showing signs ofmoderation .
"Reserve bank of India has also adopted a monetary policy to containinflation and inflationary expectations
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FINDINGS
For recession U.S.A and India both have used fiscal policy to
deal with recession.
U.S.A could not use fiscal policy correctly at the
time of great depression, so after that it had to
face inflation.
The tools used by both the countries were
government spending and reduction in taxes.
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FOR INFLATION
U.S.A is specifically using monetary policy to curbinflation.
There is a growing importance of monetary policy
and the diminishing role of fiscal policy in economicstabilization efforts in U.S.A .
Which suggests that governments of U.S.A may havemore trouble using fiscal policy to fight inflationthan unemployment.
India is using the mixture of both monetary as wellas fiscal policy to deal with inflation which accordingto our research is the best way.
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BIBLIOGRAPHY
Fiscal Policy in the United States: by GlennFollette and Byron Lutz
Romanian Journal of Fiscal Policy
Volume 2, Issue 1, January-June 2011 (2), Pages 1-23http://www.rjfp.ro/issues/Volume2_Issue1_Sucharita&
Sethi.pdf
http://articles.economictimes.indiatimes.com/2012-03-
20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-prices
http://www.rjfp.ro/issues/Volume2_Issue1_Sucharita&Sethi.pdfhttp://www.rjfp.ro/issues/Volume2_Issue1_Sucharita&Sethi.pdfhttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://articles.economictimes.indiatimes.com/2012-03-20/news/31215085_1_control-inflation-prices-of-primary-articles-high-global-commodity-priceshttp://www.rjfp.ro/issues/Volume2_Issue1_Sucharita&Sethi.pdfhttp://www.rjfp.ro/issues/Volume2_Issue1_Sucharita&Sethi.pdf -
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THANK YOU
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