<p>Japan’s outstanding stock of government bonds is exceptionally large, surpassing the levels observed in countries such as Greece that have experienced sovereign debt crises. Modern monetary theory maintains that expanding fiscal spending is unproblematic if it does not lead to inflation and that inflation can be controlled through tax increases. This study constructs a post-Keynesian macrodynamic model in an oligopolistic economy to examine the effects of fiscal policies targeting the inflation rate and the output–capital ratio. The findings demonstrate that both fiscal policies targeting the inflation rate and countercyclical fiscal policies stabilize the economy.</p>