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Title:The stabilizing role of fiscal policy: Theroretical background and empirical evidence PDF Logo
Authors:Vladimirov, Vladimir
Neicheva, Maria
Issue Date:2008
Citation:[Journal:] IBSU Scientific Journal (IBSUSJ) [ISSN:] 1512-3731 [Volume:] 2 [Year:] 2008 [Issue:] 1 [Pages:] 7-22
Abstract:The study sheds light on the stabilizing role of government budget. It finds that in Bulgaria both taxes and government spending are negatively related to the real growth rate. This leads to the conclusion that budgetary expenditure influence output in a non-Keynesian fashion. The size of discretionary fiscal impulse is the main determinant of the non-Keynesian outcome. The results imply that although the balanced budget ensures the sustainability of public finances, it does not guarantee a growth-stimulating effect in case of a large government sector. Abstention from an active fiscal policy would allow the automatic stabilizers to operate freely and to counteract the negative shocks to the economy.
Subjects:government budget
stabilizing fiscal policy
non-Keynesian effects
Document Type:Article
Appears in Collections:IBSU Scientific Journal (IBSUSJ)

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