The Role of Fiscal and Monetary Policies in Shaping Public Health Trajectories under Varying Macroeconomic Regimes

Abstract

Economic policy decisions fundamentally shape population health outcomes through complex interdependencies between fiscal allocations, monetary conditions, and healthcare accessibility. This research examines the intricate relationship between fiscal and monetary policy instruments and their collective impact on public health trajectories across different macroeconomic regimes. Through comprehensive analysis of policy transmission mechanisms, we investigate how government spending patterns, taxation structures, interest rate policies, and money supply dynamics influence health system performance, disease prevention capabilities, and population wellness indicators. Our mathematical modeling framework incorporates stochastic differential equations to capture the nonlinear dynamics between economic policy variables and health outcomes under varying macroeconomic conditions including recession, expansion, and stagflation periods. The analysis reveals significant heterogeneity in policy effectiveness across different economic environments, with fiscal multipliers for health spending ranging from 1.2 to 3.8 depending on the prevailing macroeconomic regime. Monetary policy transmission through credit channels demonstrates particularly strong effects during periods of financial stress, with a 100 basis point reduction in policy rates associated with 2.3\% to 4.7\% improvements in healthcare access metrics. These findings suggest that coordinated fiscal-monetary policy frameworks can generate substantial synergistic effects on public health outcomes, with optimal policy combinations varying systematically across business cycle phases and institutional contexts.