 Macroeconomic Effects of Budget Expenditure in Bulgaria (Econometric Analysis)Ikonomiceski i Sotsialni Alternativi, 2016, issue 2, 70-83 Abstract: This article studies the short-term and long-term impact of expenditure fiscal policy on the macroeconomic activity in Bulgaria. The study is based on an econometric analysis that uses various econometric techniques within an established algorithm following the logical schema of vector autoregression models that look at the characteristics, the significance, and the quantitative expressions of the studied relationships. The resulting empirical data shows that long-term budget expenditure increase stimulates real GDP growth, providing that expenditure has not reached marginal levels. This macroeconomic activity driving effect is observed when capital expenditure increases, while current expenditure growth has no impact that is statistically significant. In short periods of economic upturn, the expenditure fiscal policy should address the ratio between the different types of expenditure, giving priority to capital over current expenditure. In times of economic downturn, expansionary fiscal measures associated with increase in both capital and current expenditure have the capacity to stimulate economic growth and help limit the drop in macroeconomic activity Keywords: expenditure fiscal policy; macroeconomic activity; econometric analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:nwe:iisabg:y:2016:i:2:p:70-83 Access Statistics for this article More articles in Ikonomiceski i Sotsialni Alternativi from University of National and World Economy, Sofia, Bulgaria Contact information at EDIRC. |
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