Effectiveness of Fiscal Policy in Different Economic Conditions

Olesya V. Polyakova – Junior Researcher at the Financial University under the Government of the Russian Federation (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The article describes the international research experience of recent years in terms of assessing the impact of fiscal policy on the economy through the use of fiscal multipliers. It is shown how the effectiveness of fiscal measures differs depending on the phase of the economic cycle, the causes of economic fluctuations, the characteristics of households (preference for risk-free assets), the labor market (aging of the population, downward rigidity of wages), the monetary policy regime, the level of creditworthiness of the economy and a number of other parameters. Regarding the application of research results for the development of fiscal policy in modern Russia, the following recommendations can be given (to achieve maximum effect for the economy): stimulate supply, support the labor market. In addition, when conducting policy, it is necessary to take into account the degree of household debt.

The article is based on the findings of research conducted with financial support from the budget funds under the state assignment of the Financial University under the Government of the Russian Federation.

Key words: fiscal policy, fiscal multiplier, DSGE models, economic cycle.

JEL-codes: D58, E62, H30, H50, H60.