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What happens when fiscal policy is forced into a macroeconomic model using a single aggregate primary balance? The answer can be distorted forecasts, unstable output-gap dynamics, and fiscal multipliers that fail to capture how policy actually moves through the economy. In this episode from The Better Policy Project, we examine why conventional approaches to incorporating fiscal policy into semi-structural macroeconomic models can produce misleading results—and what a better framework looks like. We explore why the composition of fiscal policy matters, how different fiscal instruments transmit differently through the economy, and why credible scenario analysis requires moving beyond a single aggregate fiscal variable. We also discuss how these ideas connect to practical forecasting and policy analysis using FPAS, scenario design, suites of models, prudent risk management, and growth strategies. 🎓 Want to take these ideas further? Join The Better Policy Project’s Global Forecasting School Executive Workshop in Prague, Czech Republic, December 7–11. The workshop will focus on hands-on, real-world policy analysis, including: • Prudent Risk Management • Building policy-consistent FPAS scenarios • Using a suite of models • Deploying “3C” growth strategies • Practical scenario analysis and case studies 📩 Workshop inquiries: [email protected] 🌐 Learn more about The Better Policy Project through our website, LinkedIn, and YouTube channel. Links are in the description. #fiscalpolicy #macroeconomics #economicpolicy #economicforecasting #FiscalMultipliers #MacroeconomicModeling #centralbanking #FPAS #policyanalysis #economicmodels #publicfinance #monetarypolicy #economicresearcher #ScenarioAnalysis #GlobalForecastingSchool #BetterPolicyProject

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