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Saudi Journal of Business and Management Studies (SJBMS)
Volume-3 | Issue-12 | 1318-1323
Review Article
Fiscal Policy and Its Relationship with Economic Growth: A Review Study
Omar Mohammad Abad Alkasasbeh, Nazatul Faizah Haron
Published : Dec. 30, 2018
DOI : 10.36348/sjbms.2018.v03i12.005
Abstract
The fiscal policy reflects the state use of its economic programs, which includes revenues and expenditures in the best way. This is done by directing the state economic plans to determine the sources of income and how to spend them, and what are the most important spending trends such as wages of government employees and various service projects, to achieve the highest levels of economic balance. Economic growth represents the process of increasing real income in a cumulative and continuous manner over a period of time, where this increase must be greater than the rate of population growth. The aim of this paper is to review the research work conducted on fiscal policies and economic growth, noting that there are two types of fiscal policy; the first type is spending, while the second type is taxation. In addition, according to previous research, the relationship between fiscal policy and economic growth is not clear and consistent, where in some cases a positive relationship, while in others it may be a negative relationship. In this paper we will discuss the concept of fiscal policies, economic growth and the relationship between those two variables through some of previous research.
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