Expansionary Fiscal Policy Research

The fiscal policy in the modern meaning started in the 1930s. On practice, Roosevelt New Policies made a beginning through building public project with fiscal allocations in participating in and solving for employment problem. In theory, expansive fiscal policy of Keynesianism established the theoretical foundation in stability economy with fiscal means. Fiscal policy is used as a tool against business cycle, the result that financial policy carries out is that a financial state lias been balanced on the whole from periodic angle. However, what history is represented to us is another picture scroll, since the modern fiscal policy begins to be used, Certain cycle fluctuation appears in the macro-economy on one hand, the period for economic expansion is far greater than the period that economy shrinks; On the other hand, a kind of expansion but not tightening appear on the whole in the fiscal policy. This has some disagree as identical application with fiscal policy against business cycle, the fiscal policy might be not merely regarded as. The thesis will study expansive fiscal policy in economic stability and economic growth to give a rational explanation for the phenomenon of whole economic expansion going with fiscal policy expansion from the theory angle, and give a concrete explanation in terms of real example.The thesis reviews and analyses the traditional one against cycle and relevant problem of financial policy at first. Keynesian thought effective demand is not enough in the market economy. The aggregate supply can only often be realized balanced on the level lower than abundant employment. This is the result of spontaneous function of the market mechanism. A serious one, under balanced budget, because the different effect of fiscal multiplier will make the market spontaneous fluctuation that mechanism produce form a kind of vicious circle, Thus aggravate the existing fluctuation. Need government go on and intervene and regulate to market against cycle, in order to lighten and fluctuate, especially great fluctuate to the injury of the economy. Among them, expansive fiscal policy plays a main role. It fluctuates to be complicated involving the important factor of real economic cycle theory and Keynesianism theory, etc. But no matter that piece is difficult, to run side by side and make the rational explanation for a long time to national economic expansion with what fiscal policy expand.The economic growth is undoubtedly a most important sign of various countries' long-term economic performance, If does not reflect it for the growth of the total output or the long-term negative growth of the economy finally, Then the economic activity is nonsensical, or prove at least that the economic policy is unsuccessful, Because only the total output could meet varied demands of people. For this reason, the thesis analyze about the validity of promoting the economic growth of the fiscal policy. The theory analysis indicates, the fiscal policy is effectual to the economic growth, therefore essential too. When fiscal revenues are not enough to offer extra fund, expansive fiscal policy can be used to give play to the role of improving the balanced rate of economy growth. Restraintshould not be operated in business cycle. Positive tests find person who expansive fiscal policy play this kind of role. Thus the analysis proves realistic rationality of state of whole economic expansion walk abreast with fiscal policy expansion in theory and positive tests.The active roles of expansive fiscal policy lie in two respects in economy of stabilizing and promote increasing. Direct consequence that policy implements is an appearance of the national debt and deficit, The deficit and national debt will have a certain impact on economic stability and economic growth, and then they will influence the sustainability of expansive financial policy. So analyze after expansive fiscal policy to analyze further the national debt and deficit. The basic conclusion is that appropriate deficit and national debt can play a role i...