A Weak Fiscal Lever

Economic management is The basic aim of any governance in the world and its main indemnity objectives includes management of low and invariable inflation, reduction in unemployment, maintain frugal growth and to secure a favorable balance of payments.Fiscal lever is one of the main policy tools forthcoming to government to tackle economic downturn. According to Dornbusch, Fischer, and Startz, fiscal policy is the policy of the government with regard to the level of government purchases, the level of transfers, and the tax structures (Dornbusch, Fischer, and Startz 199).With altogether its signifi shadowce, Fiscal lever should be very strong for stabilization of economy.High sensitivity of enthronization to interest rates and misunderstanding of policy makers to anticipate the need of particular crisis makes a fiscal policy weak and ineffective.A weak fiscal lever is the recipe to create inflation and retard private investment by higher interest rates that leads to arrest grow th and maturation because deject investment means, the capital stock is also lower that leads to lower future incomes. That is the condition of total breakdown of the structure of any economic system.A weak fiscal lever also creates social unrest by manipulation of resource exclusivelyocation in the hands of government to touch their political priorities. It is well evident fact that if civil society get out be dissatisfied by the policies the process of growth can non be carried out rather the crisis management can not be achieved. In other words weak fiscal lever can not help economy to get out of recession with all its traditional tools.Work CitedDornbush, Fisher, and Startz. Macroeconomics McGraw-Hill, Singapore. 1999. Print