<abstract xmlns="http://www.w3.org/1999/xhtml"><p>An objective for each developed state remains the improvement of a suitable fiscal management system that could generate an increased level of resources. Further on, planning, distributing, allocating those resources to the proper beneficiaries, could generate an economic stabilization, suitable economic growth, decreased level of the net lending variable. The study consisted in an empirical research throughout it was developed the analysis of the impact of fiscal strategies and public expenses adjustments on economic growth and budgetary balance. Time series data from 1998 to 2018 were used on the empirical evidence over the European countries. The study developed an econometric model represented by an unbalanced panel data analysis having as independent variables: the variance of direct taxes, the dynamics of indirect taxes, the variance of budgetary balance, the variance of tax burden, the dynamics of change in net lending as percent of gross domestic product. The dependent variable was revealed throughout the variance of gross domestic product per capita. Over 588 time series observations and 28 cross-section data were taken into consideration in order to reveal if either revenue-adjustments or public-spending adjustments had a greater influence on the evolution of economic growth over the EU-Countries. The result of the econometric model exposed a positive correlation between total expenditure, budgetary balance and economic growth and a negative correlation between direct taxes, indirect taxes, tax burden and economic growth. Moreover, by generating dummy variables on the fixed effect model, it was revealed that large fiscal improvements had a less positive effect on the development of economic growth than fiscal adjustments based on medium-size consolidation.</p></abstract>

An objective for each developed state remains the improvement of a suitable fiscal management system that could generate an increased level of resources. Further on, planning, distributing, allocating those resources to the proper beneficiaries, could generate an economic stabilization, suitable economic growth, decreased level of the net lending variable. The study consisted in an empirical research throughout it was developed the analysis of the impact of fiscal strategies and public expenses adjustments on economic growth and budgetary balance. Time series data from 1998 to 2018 were used on the empirical evidence over the European countries. The study developed an econometric model represented by an unbalanced panel data analysis having as independent variables: the variance of direct taxes, the dynamics of indirect taxes, the variance of budgetary balance, the variance of tax burden, the dynamics of change in net lending as percent of gross domestic product. The dependent variable was revealed throughout the variance of gross domestic product per capita. Over 588 time series observations and 28 cross-section data were taken into consideration in order to reveal if either revenue-adjustments or public-spending adjustments had a greater influence on the evolution of economic growth over the EU-Countries. The result of the econometric model exposed a positive correlation between total expenditure, budgetary balance and economic growth and a negative correlation between direct taxes, indirect taxes, tax burden and economic growth. Moreover, by generating dummy variables on the fixed effect model, it was revealed that large fiscal improvements had a less positive effect on the development of economic growth than fiscal adjustments based on medium-size consolidation.

Fiscal management on revenue-based or expenditure-based adjustments: an empirical evidence from EU-Countries

The Bucharest University of Economic Studies

Management & Marketing

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

An objective for each developed state remains the improvement of a suitable fiscal management system that could generate an increased level of resources....

Fiscal management on revenue-based or expenditure-based adjustments: an empirical evidence from EU-Countries

Published Online: Apr 18, 2019

Page range: 163 - 175

DOI: https://doi.org/10.2478/mmcks-2019-0011

Keywords
euro zone, unbalanced panel data, fixed effects, fiscal adjustment, dummy variables, expenditure-based adjustment, revenues based-adjustment

© 2019 Ramona-Mihaela Bâzgan, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Fiscal management on revenue-based or expenditure-based adjustments: an empirical evidence from EU-Countries

Published Online: Apr 18, 2019

Page range: 163 - 175

DOI: https://doi.org/10.2478/mmcks-2019-0011

Keywordseuro zone, unbalanced panel data, fixed effects, fiscal adjustment, dummy variables, expenditure-based adjustment, revenues based-adjustment

© 2019 Ramona-Mihaela Bâzgan, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
euro zone, unbalanced panel data, fixed effects, fiscal adjustment, dummy variables, expenditure-based adjustment, revenues based-adjustment