The structural-functional model that highlights both fiscal and monetary policies’ impact on aggregate demand is proposed. The above model is based on the complex combination of financial architectonics’ instruments, regarding the composition and structure effects, time lags, essential modifications in endogenous and exogenous economic environment, and some institutional transformations in financial system. Financial policy’s performance experience in countries with advanced end emerging economies at the stages of recession, post-stabilization recovery and sustainable economic growth is systematized.
The statements on fiscal consolidation and stimuli in emerging economies are validated. The mentioned measures should include the simultaneous fiscal rules’ implementation and observance, the appropriate budget programs’ preparation, the synchronized regulation of public expenditures’ and revenues’ weight indices, and the budget system’s institutional modernization. The institutional approach to fiscal and monetary policies’ coordination is disclosed. That approach is based on the statements that: the goals of ongoing increase in social welfare and dynamic macroeconomic equilibrium’s maintenance are dialectically interconnected; fiscal and monetary mechanisms should be combined alternatively, depending on the economic dynamics, financial and budget balance, the economic cycle’s stages, and the financial regulators’ systematic interaction, based on the principles of transparency and efficiency. The conceptual bases of public financial strategy for social development are proposed. The strategy involves permanently coordinated introduction of financial instruments, aiming to ensure macroeconomic stability, to foster the investment recourses’ attraction and redistribution processes, to promote the necessary institutional transformations in government finances, to induce the budget expenditures’ efficiency, and to improve public financial management system as well.
The approaches to the tax system’s fiscal efficiency assessment considering the taxation of business inputs and consumption are improved. Under conditions of institutional transformations, the monetary policy’s performance techniques focused on the strategic objective of price and financial stability are refined. The economic globalization’s effects on the financial system’s development are justified. The domestic tax system’s institutional formation features are determined. The basic security principles for the government finances sustainability are developed. Firstly, all the factors that affect the public debt-to-GDP ratio dynamics should be monitored properly. Secondly, to ensure financial security of the country in terms of government debt, the respective integral indicator should be calculated and controlled continually. Furthermore, some rational institutional restrictions on the cyclically adjusted budget deficit should be imposed.
The main techniques for the excise taxation strategy’s preparation have got further development. The periodization approaches to the domestic monetary policy’s implementation experience, allowing to determine its specific historical stages, are significantly deepened. The methodological formation principles for government financial policy are improved. The priorities for crucial increase in the budget expenditures’ efficiency are substantiated.
