Exploring the Impact of Active Fiscal Policy on Economic Growth and Stability

Introduction The intricate relationship between fiscal policy and economic performance has long been a focal point of economic discourse, especially in the context of promoting growth and ensuring stability. Active fiscal policy, characterized by deliberate government intervention in the economy through adjustments in spending and taxation, plays a crucial role in shaping macroeconomic outcomes. This paper seeks to explore the impact of active fiscal policy on economic growth and stability, examining the mechanisms through which fiscal measures can stimulate economic activity and the potential risks associated with such interventions. By analyzing the theoretical foundations and empirical evidence surrounding active fiscal policy, this report aims to provide a comprehensive understanding of its efficacy and implications for policymakers.

The Role of Active Fiscal Policy in Economic Growth Active fiscal policy can significantly influence economic growth through various channels, primarily government spending and tax policy. Government spending, particularly on infrastructure, education, and research and develop