I've never quite got the hang of this one. Money is the object, but what's the difference between for example 'fiscal policy' and 'financial policy', or are they indeed merely synonyms?

3 Answers 3


The domains are different (though overlapping to some extent), as these two definitions show (bolding mine):

Fiscal Policy

In economics and political science, fiscal policy is the use of government revenue collection (mainly taxes) and expenditure (spending) to influence the economy.[1] According to Keynesian economics, when the government changes the levels of taxation and government spending, it influences aggregate demand and the level of economic activity. Fiscal policy can be used to stabilize the economy over the course of the business cycle.


Financial Policy

Financial Policy definition : Criteria describing a corporation's choices regarding its debt/equity mix, currencies of denomination, maturity structure, method of financing investment projects, and hedging decisions with a goal of maximizing the value of the firm to some set of stockholders.



There is some overlap in meaning between the terms: financial, meaning (obviously) 'involving financial matters', is a subset of fiscal, which has the additional meaning of 'relating to government revenue and taxes'.

(Links to definitions at Oxforddictionaries.com)

  • That is not my experience. Fiscal can be and often is used more widely than in government. You are right that there is not a clear distinction between fiscal and financial. But in general terms fiscal and fiscal policy are used to describe the more liquid elements, decisions, and policies e.g. cash, bonds, banking matters etc; whilst financial also takes in the wider elements of an organisation's affairs: sales revenue, costs, inventories, business assets etc. But there are no hard and fast rules to this.
    – WS2
    Feb 6, 2015 at 15:03

Financial policy is related to money and only money. Lending/interest rates are the bellwether of financial policy - it is just pure math. Fiscal policy is more about how (much) a Government wants to spend and earn - this is not pure math as financial policy and is quite discretionary.

Edit Fiscal policy is top-level directive/decision and includes financial policy.

  • 1
    Why don't you include references for your answers?
    – user98990
    Feb 6, 2015 at 7:53
  • Since 'fiscal policy' is mentioned and 'contrasted' with, I took it as 'financial policy' of Government. If you type fiscal policy in Google - it auto-completes to say 'Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's money supply'. As I said it is more of decision making (where to spend and earn) and financial policy is management of expenditure and revenue. Feb 6, 2015 at 10:20
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    I believe you sir, but you will score more rep points if you add references for all of your answers. Take example from all the other answers you see, especially the answers of high rep users.
    – user98990
    Feb 6, 2015 at 13:08

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