OPTIMIZING MONETARY AND FISCAL POLICY INTERACTION TO ENSURE FINANCIAL SYSTEM STABILITY: THEORETICAL FOUNDATIONS, MACROECONOMIC INDICATORS, AND POLICY DIRECTIONS

Abstract

 This article examines the theoretical foundations and practical mechanisms of ensuring financial system stability through the coordinated interaction of monetary and fiscal policies. It provides an in-depth analysis of macroeconomic indicators, including GDP growth rates, inflation dynamics, exchange rate stability, budgetary balance, public debt sustainability, foreign trade performance, investment activity, and labor market trends. Special emphasis is placed on the role of the central bank and fiscal authorities in mitigating systemic risks, enhancing resilience to external shocks, and maintaining macroeconomic stability. The study also explores key theoretical models, such as IS-LM, Mundell–Fleming, and DSGE, to analyze policy coordination in different economic environments. Based on Uzbekistan’s recent macroeconomic performance, the research identifies current challenges and proposes strategic directions for optimizing policy interaction, integrating innovative financial instruments, and adapting international best practices to national conditions. The findings contribute to improving the efficiency of macroeconomic regulation and strengthening the foundations for sustainable economic development.