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ACADEMY OF ECONOMIC STUDIES

The Effects of Fiscal Policy on Economic Growth. ACADEMY OF ECONOMIC STUDIES. DOCTORAL SCHOOL OF FINANACE AND BANKING. DISSERTATION PAPER. Student: RACARU IRINA Supervisor:MOISĂ ATLĂR, Ph.D. BUCHAREST, JULY 2001. The Effects of Fiscal Policy on Economic Growth. FISCAL POLICY. taxation

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ACADEMY OF ECONOMIC STUDIES

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  1. The Effects of Fiscal Policy on Economic Growth ACADEMY OF ECONOMIC STUDIES DOCTORAL SCHOOL OF FINANACE AND BANKING DISSERTATION PAPER Student: RACARU IRINA Supervisor:MOISĂ ATLĂR, Ph.D BUCHAREST, JULY 2001

  2. The Effects of Fiscal Policy on Economic Growth FISCAL POLICY • taxation • government spending ECONOMIC GROWTH • neoclassic • endogenous

  3. The Effects of Fiscal Policy on Economic Growth CONDITIONAL CONVERGENCE

  4. The Effects of Fiscal Policy on Economic Growth 1. THE EFFECTS OF TAXATION 2. THE EFFECTS OF GOVERNMENT SPENDING

  5. The Effects of Fiscal Policy on Economic Growth with and for

  6. The Effects of Fiscal Policy on Economic Growth THE EMPIRICAL EVIDENCE • cross section • pool Barro(1990) - negative effect of the government consumption Easterly and Rebelo (1993) - pozitive effect of the public investment

  7. The Effects of Fiscal Policy on Economic Growth

  8. The Effects of Fiscal Policy on Economic Growth The variables: Source: World Bank Indicators

  9. The Effects of Fiscal Policy on Economic Growth

  10. The Effects of Fiscal Policy on Economic Growth The Augmented Dickey Fuller test

  11. The Effects of Fiscal Policy on Economic Growth

  12. The Effects of Fiscal Policy on Economic Growth

  13. The Effects of Fiscal Policy on Economic Growth

  14. The Effects of Fiscal Policy on Economic Growth

  15. The Effects of Fiscal Policy on Economic Growth

  16. The Effects of Fiscal Policy on Economic Growth

  17. The Effects of Fiscal Policy on Economic Growth

  18. The Effects of Fiscal Policy on Economic Growth MIDDLE LOW 0.10 0.10 0.08 0.05 0.06 0.00 LOGGDPGRUSD 0.04 LOGGDPGRUSD -0.05 0.02 -0.10 0.00 -0.15 -0.02 -5 -4 -3 -2 -1 0 -4 -3 -2 -1 0 LOGPBLINV LOGPBLINV 0.10 0.10 0.08 0.05 0.06 0.00 LOGGDPGRUSD 0.04 LOGGDPGRUSD -0.05 0.02 -0.10 0.00 -0.15 -0.02 -4 -3 -2 -1 0 -4 -3 -2 -1 0 LOGCONS LOGCONS

  19. The Effects of Fiscal Policy on Economic Growth THE EFFECTS OF GOVERNMENT SPENDING ON INDUSTRIAL PRODUCTION - The Romanian Case The variables: Source: National Bank of Romania

  20. The Effects of Fiscal Policy on Economic Growth

  21. The Effects of Fiscal Policy on Economic Growth The Augmented Dickey Fuller test

  22. The Effects of Fiscal Policy on Economic Growth For the PROD-INV relation: The Johansen cointagration test

  23. The Effects of Fiscal Policy on Economic Growth PRODt = 2,211·INVt + ut (29,06) ΔPRODt = -0,132·ΔPRODt-1 - 0,083·ΔPRODt-2 -0,049·ΔINVt-1 (-1,769) (1,074) (-2,530) - 0,080·ΔINVt-2 -0,122·SEAS(12) - 0,004·ut-1 + εt (-5,065) (-6,690) (-0,481) ΔINVt = 1,302·ΔPRODt-1 + 0,212·ΔPRODt-2 -0,404·ΔINVt-1 (3,705) (0,581) (-4,375) - 0,667·ΔINVt-2 +0,483·SEAS(12) +0,154·ut-1 + εt (-3,573) (5,592) (3,665)

  24. The Effects of Fiscal Policy on Economic Growth

  25. The Effects of Fiscal Policy on Economic Growth

  26. The Effects of Fiscal Policy on Economic Growth For 5 years

  27. The Effects of Fiscal Policy on Economic Growth For the PROD - INVEST, CONS relation: The Johansen cointagration test

  28. The Effects of Fiscal Policy on Economic Growth PRODt = 1,041·INVESTt +0,668·CONSt+ ut (11,69) (8,244) ΔPRODt = -0,092·ΔPRODt-1 -0,033·ΔPRODt-2 -0,054·ΔINVESTt-1 (-1,185) (-0,432) (-2,473) - 0,079·ΔINVESTt-2 -0,056·CONSt-1 -0,039·CONSt-2 (-4,394) (-2,305) (-1,726) -0,122·SEAS(12) - 0,033·ut-1 + εt (-6,874) (-1,655)

  29. The Effects of Fiscal Policy on Economic Growth ΔINVESTt = 0,836·ΔPRODt-1+0,237·ΔPRODt-2 -0,264·ΔINVESTt-1 (2,344) (0,668) (-2,637) - 0,185·ΔINVESTt-2 -0,011·CONSt-1 +0,053·CONSt-2 (-2,240) (-0,103) (0,501) +0,439·SEAS(12) + 0,435·ut-1 + εt (5,409) (4,816) ΔCONSt = 0,601·ΔPRODt-1 +0,379·ΔPRODt-2 +0,149·ΔINVESTt-1 (2,290) (1,450) (2,026) +0,142·ΔINVESTt-2 -0,642·CONSt-1 -0,517·CONSt-2 (2,340) (-7,806) (-6,689) +0,380·SEAS(12) +0,214·ut-1 + εt (6,374) (3,219)

  30. The Effects of Fiscal Policy on Economic Growth

  31. The Effects of Fiscal Policy on Economic Growth

  32. The Effects of Fiscal Policy on Economic Growth Response to One S.D. Innovations For 5 years

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