The Role of Fiscal Policy in Maintaining Economic Stability and Post-Pandemic Recovery

Abstract

This study aims to analyze the effectiveness of fiscal policy in maintaining economic stability and supporting post-pandemic recovery during the last five years. Using a narrative study approach, this research synthesizes a range of empirical and conceptual literature that highlights the central role of fiscal policy as a key instrument for global economic recovery. The study also evaluates the interaction between fiscal and monetary policies, as well as the importance of sound fiscal governance in ensuring macroeconomic stability. The findings reveal that fiscal policy functions not only as a short-term stabilization mechanism to mitigate economic contraction but also as a long-term structural reform tool that enhances fiscal resilience, stimulates inclusive and sustainable growth, and strengthens national economic capacity. Moreover, the integration of green fiscal policy and transparency in public spending has proven essential in achieving fiscal sustainability while facilitating the transition toward low-carbon economic development. This study concludes that future fiscal policy design must be adaptive, efficient, and balanced to support economic growth, social equity, environmental protection, and long-term financial stability.