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How Can Romanian Government Boost Economic Growth?

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  • Campeanu Emilia

    ()
    (Bucharest Academy of Economic Studies, Faculty of Finance, Insurance, Banking, and Stock Exchange)

  • Gyorgy Attila

    ()
    (Bucharest Academy of Economic Studies, Faculty of Finance, Insurance, Banking, and Stock Exchange)

Abstract

Restoring economic growth is a challenge for the Romanian government that have to apply fiscal and budgetary measures in order to restore the positive path of the GDP without deteriorating the public finances sustainability. Therefore, it is necessary to identify based on historic data the impact of fiscal and budgetary policy on economic growth. The aim of this study is to analyze the effects of fiscal and budgetary policies on economic growth based on Romania case. The results are useful for identifying the instruments to boost the economy and propagation mechanisms of their effects on growth. Therefore, the economic growth is sustained by governmental measures involving increases for taxes on production and imports and cut for current taxes on income and wealth. Meanwhile, compensation of employees, subsidies and interest have significant statistical effects on growth.

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Bibliographic Info

Article provided by University of Oradea, Faculty of Economics in its journal The Journal of the Faculty of Economics - Economic.

Volume (Year): 1 (2012)
Issue (Month): 2 (December)
Pages: 436-442

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Handle: RePEc:ora:journl:v:1:y:2012:i:2:p:436-442

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Keywords: fiscal policy; budgetary policy; growth;

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  1. Alberto F. Alesina & Silvia Ardagna, 2009. "Large Changes in Fiscal Policy: Taxes Versus Spending," NBER Working Papers 15438, National Bureau of Economic Research, Inc.
  2. Barro, Robert J, 1989. "The Ricardian Approach to Budget Deficits," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 3(2), pages 37-54, Spring.
  3. Buiter, Willem H., 1977. "`Crowding out' and the effectiveness of fiscal policy," Journal of Public Economics, Elsevier, Elsevier, vol. 7(3), pages 309-328, June.
  4. Minea, Alexandru & Villieu, Patrick, 2010. "Endogenous growth, government debt and budgetary regimes: A Corrigendum," Journal of Macroeconomics, Elsevier, Elsevier, vol. 32(2), pages 709-711, June.
  5. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
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