Review of International Economy and finance (RITEF)
Vol. 1 No. 4 (2025)

THE EFFECTIVENESS OF FISCAL POLICY AND GOVERNMENT STIMULUS IN MAINTAINING DOMESTIC CONSUMPTION AND INVESTMENT: A LITERATURE REVIEW

Gunawan Widjaja (Faculty of Law Universitas 17 Agustus 1945 Jakarta)



Article Info

Publish Date
12 Aug 2025

Abstract

This article aims to review the effectiveness of fiscal policy and government stimulus in maintaining domestic consumption and investment, particularly during periods of economic crisis. Through a literature review, it was found that fiscal policy instruments such as government spending, tax incentives, and social assistance play a significant role in maintaining people's purchasing power and encouraging investment recovery. The success of stimulus measures is highly influenced by the speed of distribution, targeting accuracy, and the fiscal capacity of the country concerned. However, the implementation of fiscal policies also faces various challenges such as limited fiscal space, the risk of rising public debt, bureaucratic weaknesses, and the need for transparent governance. The review emphasises the importance of adaptive stimulus design, synergy with monetary policy, and continuous evaluation to ensure that fiscal policy remains effective and sustainable in the face of future global and domestic economic dynamics.

Copyrights © 2025






Journal Info

Abbrev

RITEF

Publisher

Subject

Description

Review of International Economy and finance (RITEF) is a scientific journal that publishes articles in the Business field includes conceptual ideas in the fields of Economics, Accounting, Management, business. The scopes are Human Resource Management, Marketing Management, Financial Management, ...