Fiscal policy is a fundamental choice to ensure macroeconomic stability: A theoretical analysis

This article explores the theoretical foundations and historical perspectives of fiscal policy, emphasizing its role in economic stabilization and the management of economic cycles. It traces the evolution of economic ideas, from classical orthodoxy, focused on strict budgetary balance and limited state intervention, to the Keynesian revolution, which positioned fiscal policy as a strategic tool for influencing aggregate demand. The article also examines the main instruments of fiscal policy, including public spending, taxation, and debt, while detailing their effectiveness and limitations in various economic contexts. Finally, particular attention is given to automatic stabilizers and fiscal approaches specific to developing countries, highlighting the importance of balanced management to achieve sustainable growth and macroeconomic stability.