THE IMPACT OF MONETARY AND FISCAL POLICIES ON PUBLIC FINANCIAL MANAGEMENT

• Main Author: Loredana Ciurlău
• Format: Article
• Language: English
• Published: Vasile Goldis University Press 2012-01-01
• Series: Studia Universitatis Vasile Goldis Arad, Seria Stiinte Economice
• Subjects: financial policy; monetary policy; fiscal policy; the budgetary constraint
• Online Access: http://www.uvvg.ro/studiaeconomia/images/2012/p1/2.%20Loredana%20Ciurlau%20-%20THE%20IMPACT%20OF%20MONETARY%20AND%20FISCAL%20POLICIES%20ON%20PUBLIC%20FINANCIAL%20MANAGEMENT.pdf

Fiscal policy is the main component of financial policy. Being a component of economic policy, taxation must lead to economic objectives. Maintaining equilibria macroeconomic cannot be blamed solely in charge of monetary policy, fiscal policy and that the revenue must have a role in support and to bear the load efforts to stabilise. Large deficits are dangerous for current account, because they are associated with a greater risk of producing an adjustment steep in the exchange rate and high volatility of exchange rate has major implications on the stability and macroeconomic monetary, in general. This means that countries should his election budgets so as to cope with growing demand from the private sector and to take necessary safeguard measures against potential crises, whereas the extent fiscal deficit contributes directly to the magnitude current account deficit.