Fiscal Policy Limitations | Vibepedia

Fiscal policy, a crucial tool for governments to manage their economies, has several limitations that can hinder its effectiveness. The use of government revenue collection and expenditure to influence macroeconomic variables, as theorized by John Maynard Keynes, can be constrained by factors such as debt levels, inflation, and political considerations. Nouriel Roubini notes that 'fiscal policy is not a panacea for all economic ills,' emphasizing the need for a nuanced approach to fiscal management.