Epistemology of public spending as a component of interventionist fiscal policy

Abstract

The macroeconomic environment determines a country's economic activity, manifesting itself through discretionary policies that the government implements concerning aggregate demand. One of the most impactful forms of state intervention is through fiscal policy, as it enables influence over public spending and, consequently, the entire national economy. John Maynard Keynes developed a theory of macroeconomic adjustment consisting of the active participation of the State in the market to regulate it. This theory was considered revolutionary, getting detractors, mainly defenders of liberalism who considered that the economy should regulate itself and the State should only watch over that. Therefore, this research paper analyzes the theoretical construction that supports fiscal policy as an interventionist tool, making inductions about the components that determine it and using the dialectical method to present the various arguments provided in the documentary sources consulted.