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Optimal Fiscal System And Public Finance Sustainability Indicators In East European Countries Within The Eu27

Author

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  • BANU Ilie

    ("Lucian Blaga" University of Sibiu)

  • BUTIUC Ioana-Madalina

    ("Lucian Blaga" University of Sibiu)

Abstract

The aim of the paper is to outline the characteristics that an optimal fiscal system has to fulfill. Starting from the hypothesis that high-debt EU countries may be suffering from higher tax induced distortions to their economy whereas the lower-debt counterparts will not, we expect taxes to influence public deficit rate and study its influence on the level of public debt ratio and determine the regression equations. Further, we discovered using SAS software that the influence is stronger on individual countries studied than on European level. Findings are a signal to be considered by policymakers when setting the automatic stabilizers.

Suggested Citation

  • BANU Ilie & BUTIUC Ioana-Madalina, 2012. "Optimal Fiscal System And Public Finance Sustainability Indicators In East European Countries Within The Eu27," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 63(4-5), pages 121-136.
    • Handle: RePEc:blg:reveco:v:63.4-5:y:2012:i:4-5:p:121-136
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    File URL: http://economice.ulbsibiu.ro/revista.economica/archive/RE%204-5-63-2012.pdf
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    More about this item

    Keywords

    optimal fiscal system; public debt; public deficit; tax-to-GDP ratio;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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