Fiscal Policy and Economic Growth: How Policy Shapes Jobs
Understanding fiscal policy and economic growth helps explain how governments’ choices about taxes, spending, and borrowing ripple through every corner of the economy, from the stability of family budgets to the vigor of local labor markets, and from the price level facing households to the resilience of small businesses during cycles of expansion and downturn, including the distributional effects on households, the incentives facing managers, and the role of credible rules that anchor expectations.By examining specific channels, analysts evaluate fiscal policy effects on jobs as infrastructure builds, education programs, targeted subsidies, and regulatory reforms shift the demand for labor, alter skill requirements, encourage entrepreneurship, raise productivity in tradable sectors, and improve the resilience of workers through retraining and mobility incentives.
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