30 years: Debt capital markets
In the first video about fiscal policy, Tim gave us an overview of the broader macroeconomic model that provides the framework for determining how fiscal policy influences the trajectory of economic growth. In this video, he explains us the theory behind macroeconomic policy but dig a bit deeper, looking specifically at how passive fiscal policy works, then more interestingly at the fiscal policy tools available to governments to influence their economies.
In the first video about fiscal policy, Tim gave us an overview of the broader macroeconomic model that provides the framework for determining how fiscal policy influences the trajectory of economic growth. In this video, he explains us the theory behind macroeconomic policy but dig a bit deeper, looking specifically at how passive fiscal policy works, then more interestingly at the fiscal policy tools available to governments to influence their economies.
10 mins 14 secs
Fiscal policy can be discretionary, but an economy also has automatic stabilisers that influence business cycles even if a government is not proactively using fiscal policy tools. The major discretionary fiscal policy tools available to a government to correct an economy that is out of equilibrium are taxes and government expenditures.
Key learning objectives:
Explain automatic stabilisers and how they work over a business cycle
Examine the discretionary policy tools available to governments to influence business cycles, specifically taxes and government expenditures
10:44