HOW CAN ROMANIAN GOVERNMENT BOOST ECONOMIC GROWTH?

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.

Keywords

• fiscal policy, budgetary policy, growth