ABSTRACT
Fiscal policies, broadly defined to include tax, government expenditures, and deficit financing policies, have multiple goals and functions, including the fulfillment of micro-as well as macroeconomic objectives. While over time the emphasis, both of academics and policy makers, has shifted between these two aspects of public finance, there is no doubt that the analysis of the linkages between fiscal and other macroeconomic policies is today at the center stage of modern macroeconomic analysis. Indeed, at the core of such analysis are questions related to the interactions between the budgetary stance and the behavior of economic aggregates such as employment, inflation, savings, investments, and growth, as well as the implications of these linkages for the proper design of fiscal policies.
