ABSTRACT
Fiscal policies embody the optimizing logic financial officials use to interpret ambiguous phenomena. The research on fiscal policy impacts substantiates this logic beyond the liquidity, cost, and investment concerns that dominate the work financial officials do. Fiscal policies create incentives, distribute burdens and benefits, and trigger effects. Policy makers hope that intentions shape consequences. With the first-best or second-best alternatives in mind, this survey explores the origins and intentions of fiscal policies, the tools leaders choose to apply them, and the policy consequences found among seven policy impacts: incidence, work and leisure, savings and consumption, investment, portfolio choice, risk taking, and innovation-productivity relationships. We look at fiscal policies as government interventions in the economy—limiting or expanding liberty—for either pro-positive government or pro-business reasons resulting in either progress or leviathan.
