Lecturer Dr. Fiscal policy is the government operation of government spending (G) and taxes (T).

Lecturer Dr. “Fiscal policy” is the government operation of government spending (G) and taxes (T). Typically we consider the problem of how the government can manipulate G and T so as to control economic variables such as output, inflation, interest rates, etc. Issues: how fiscal policy can “stabilize” the economy? What about government borrowing and public debt?