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How Should Slovenia Design Fiscal Policies in the Government Debt Crisis?

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  • Dmitri Blueschke
  • Klaus Weyerstrass
  • Reinhard Neck

Abstract

We investigate how fiscal policies should be designed in Slovenia during the next few years. Using the SLOPOL model, an econometric model of the Slovenian economy, we analyze the effects of different fiscal policies using simulations and determine optimal fiscal policies for Slovenia. We show that the optimal design of fiscal policies is rather close to the austerity course as detailed in the Slovenian Stability Program, revealing the small scope of possible alternative fiscal stabilization policies available due to the relatively low effectiveness of the fiscal instruments with respect to their influence on the business cycle in the Slovenian economy.

Suggested Citation

  • Dmitri Blueschke & Klaus Weyerstrass & Reinhard Neck, 2016. "How Should Slovenia Design Fiscal Policies in the Government Debt Crisis?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(7), pages 1562-1573, July.
    • Handle: RePEc:mes:emfitr:v:52:y:2016:i:7:p:1562-1573
    DOI: 10.1080/1540496X.2016.1158549
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