Stabilization Function of Public Finances: Implementation of Instruments in Conditions of Socio-Economic Crises

Abstract

In the years 2020–2022, there was a significant slowdown in economic processes. The instability of macroeconomic factors necessitated efforts by public finance sector institutions to limit them. There were anti-crisis and stabilization measures that were supposed to lead to a return to the path of sustainable development. The aim of the paper is to identify the scope and possibilities of using stabilization instruments within the public finance sector and limiting the negative effects of crisis phenomena. As part of stabilization activities, targeted programs have already been launched, both on the scale of individual countries and internationally in the European Union, within the International Monetary Fund, and by other public entities. The scope of activities indicates an increased involvement of public resources in the social and economic spheres. Crisis phenomena indicate the advisability of using various stabilization instruments to reduce negative trends in the economy. The thematic scope of the study refers directly to current economic changes from a global perspective and also concerns selected national problems in Poland. It covers issues related to actions taken by public authorities to stabilize the economy in the face of changes caused by the above-mentioned crisis phenomena. Research indicates that the allocation of public resources to stabilize the economy may have other consequences, such as changing the structure of public expenditure to increase current expenditure, reducing the share of investment expenditure, and increasing the risk of excessive budget deficits and public debt, which may occur in the economy in the long term. KEYWORDS: public finances, stabilizing the economy, public debt, budget deficit