Fiscalism

Economic philosophy and theory

Fiscalism is a term sometimes used to refer the economic theory that the government should rely on fiscal policy as the main instrument of macroeconomic policy. Fiscalism in this sense is contrasted with monetarism, which is associated with reliance on monetary policy. Fiscalists reject monetarism in a non-convertible floating rate system as inefficient if not also ineffective. There are two types of fiscalism: (1) contained fiscalism, which does not allow the economy to grow or decline as much as possible; and elevated fiscalism, which does not allow the economy to decline but allows for the economy to grow unrestrained.

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