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Impact Of Cyclical Evolution On Budget Balance- Romania’S Case

Author

Listed:
  • Alexandru Avram

    (West University of Timisoara Faculty of Economics and Business Administration)

  • Veronel Avram

    (University of Craiova Faculty of Economics and Business Administration)

  • Roxana Adriana Hetes-Gavra

    (West University of Timisoara Faculty of Economics and Business Administration)

Abstract

History has provided sufficient evidence that economic activity does not grow linearly and economic cycles can be easily distinguished, in which periods of growth are followed by periods of recession, stagnation, rising unemployment and widening budget deficits. Cyclical evolution impact on macroeconomic equilibrium requires us to move to a multiannual approach to budget balance and think about adjustments for the fiscal policy mix over the economic cycle, i.e. to pursue higher deficits in periods of recession as a result of tax incentives and some public investment expenditures absolutely necessary to resume growth and the deficits and public debt accumulated will be reduced in further periods.

Suggested Citation

  • Alexandru Avram & Veronel Avram & Roxana Adriana Hetes-Gavra, 2014. "Impact Of Cyclical Evolution On Budget Balance- Romania’S Case," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(42), pages 144-149.
    • Handle: RePEc:aio:aucsse:v:1:y:2014:i:42:p:144-149
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    File URL: http://feaa.ucv.ro/AUCSSE/0042v1-019.pdf
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    References listed on IDEAS

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    1. Dima BOGDAN & Nicoleta MOLDOVAN & Lobon? OANA, 2010. "Correlation between electoral cycle and fiscal policy decisions in Romania," EuroEconomica, Danubius University of Galati, issue 24, pages 48-56, March.
    2. Ludvigson, Sydney, 1996. "The macroeconomic effects of government debt in a stochastic growth model," Journal of Monetary Economics, Elsevier, vol. 38(1), pages 25-45, August.
    3. Ioan Talpos & Bogdan Dima & Mihai Mutascu & Cosmin Enache, 2007. "An Empirical Analysis of the Budget Deficit," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 11(11(516)), pages 15-36, November.
    4. Milesi-Ferretti, Gian Maria & Roubini, Nouriel, 1998. "Growth Effects of Income and Consumption Taxes," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(4), pages 721-744, November.
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    Cited by:

    1. Aurelia Dumitru, 2015. "Book review: Alexandru Avram - Fiscal policies and economic growth during crisis," Social Sciences and Education Research Review, Department of Communication, Journalism and Education Sciences, University of Craiova, vol. 2(2), pages 99-102, October.

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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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