DEFINITION of 'Fiscal Localism'

Institutionalized monetary exchange focused upon local and regional aspects. Fiscal localism can refer to different theologies, but the most basic and easily recognizable form of fiscal localism would be the idea of buying locally. Advocates of the practice believe that fiscal localism allows communities to grow organically and more efficiently, as local merchants and consumers work together to further their resident economy.

BREAKING DOWN 'Fiscal Localism'

In addition to the idea of buying locally to support the local economy, local fiscalism can also include the use of a localized currency. By using a local currency, a community may be able to better gauge its true economic performance, as economic factors such as inflation and interest rates tend to be a national metric. By using a local currency, that unit of value may be a better measure of the region's economic conditions than a national currency may be.

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