Fiscal Policy During The Current Crisis
Fiscal policy is an important government tool for managing the economy, having the ability to affect the total amount of output produced - GDP. Changes in the instruments of fiscal policy have impact on aggregate demand, the pattern of resource allocation, and the distribution of income. The article shows the mechanisms through which fiscal policy stabilizes the business cycle, and the specific requirements for fiscal policy during recession; the practical problems that may occur in implementing an effective fiscal policy are also emphasized. In the specific circumstances of the current financial crisis, the revival of the fiscal policy as a macroeconomic policy faces high expectations as to what it can accomplish. Therefore, the paper highlights the composition of fiscal stimulus package, and reviews the specific fiscal stimulus plans adopted so far by different countries and their objectives. The final section examines the fiscal measures implemented by the Romanian government, as a response to the current crisis. The conclusion is that Romania has conducted an inconsistent and ineffective fiscal policy, which has contributed to macroeconomic imbalances and to an increased fiscal pressure on business. Therefore, a medium-term fiscal framework has to be implemented, in order to ensure fiscal effectiveness and sustainability.
Volume (Year): 5 (2010)
Issue (Month): 4 (december)
|Contact details of provider:|| Postal: Bd.Expozitiei 1B, Bucuresti, Sector 1, Etaj 3, 012101|
Web page: http://www.rau.ro/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Torben M. Andersen, 2009. "Fiscal policy and the global financial crisis," Economics Working Papers 2009-07, Department of Economics and Business Economics, Aarhus University.
- Anna Stangl, 2007. "World Economic Survey," Chapters, in: Handbook of Survey-Based Business Cycle Analysis, chapter 5 Edward Elgar Publishing.
- Sanjeev Gupta & Carlos Mulas-Granados & Emanuele Baldacci, 2009. "How Effective is Fiscal Policy Response in Systemic Banking Crises?," IMF Working Papers 09/160, International Monetary Fund.
- N/A, 2009. "On the Recession," Local Economy, London South Bank University, vol. 24(3), pages 253-253, May.
- Antonio Spilimbergo & Steven A. Symansky & Carlo Cottarelli & Olivier J Blanchard, 2009.
"Fiscal Policy for the Crisis,"
IMF Staff Position Notes
2008/01, International Monetary Fund.
- Vito Tanzi, 2008. "The role of the state and public finance in the next generation," OECD Journal on Budgeting, OECD Publishing, vol. 8(2), pages 1-27.
- Martin Feldstein, 2002. "The Role for Discretionary Fiscal Policy in a Low Interest Rate Environment," NBER Working Papers 9203, National Bureau of Economic Research, Inc.
- Paolo Mauro & Mark A Horton & Manmohan S. Kumar, 2009. "The State of Public Finances; A Cross-Country Fiscal Monitor," IMF Staff Position Notes 2009/21, International Monetary Fund.
- Tanzi, Vito, 2008. "The role of the state and public finance in the next generation," Seminarios y Conferencias 7107, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- Ray Barrell & Tatiana Fic & Iana Liadze, 2009. "Fiscal Policy Effectiveness in the Banking Crisis," National Institute Economic Review, National Institute of Economic and Social Research, vol. 207(1), pages 43-50, January.
When requesting a correction, please mention this item's handle: RePEc:rau:journl:v:5:y:2010:i:4:p:48-67. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alex Tabusca)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.