Fiscal Policy-A Comparative Study With u

8/2/2019 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

Fiscal Policy-A Comparative Study With u

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