HETEROGENEITY OF FISCAL POLICIES

Alina Daniela Vodă (), Gabriela Dobrotă () and Loredana Andreea Cristea ()
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Alina Daniela Vodă: Department of Doctoral Studies, Faculty of Economic Sciences, Lucian Blaga University, Sibiu, Romania
Gabriela Dobrotă: Faculty of Economic Sciences, Constantin BrâncuÈ™i University, Târgu Jiu, Romania
Loredana Andreea Cristea: Department of Doctoral Studies, Faculty of Economic Sciences, Lucian Blaga University, Sibiu, Romania

Annals of Faculty of Economics, 2020, vol. 1, issue 2, 257-264

Abstract: Understanding the functionality of fiscal policies, as well as its fundamental role in economic balancing, these are important aspects in terms of protecting and developing the business environment with obvious effects on social life. This study delves into the heterogeneity of fiscal policies to create a delimiting framework for them. The two types of fiscal policies, the discretionary or deliberative fiscal policy and the fiscal policy that act as an automatic stabilizer, were debated and detailed. The characteristics of the two types of policies are offered the way of using government revenues and expenditures as fiscal instruments. Thus, deliberative fiscal policies use instruments in directions strictly defined by the government in the sense of economic expansion or coercion. In contrast, fiscal policies that act as an automatic stabilizer do not require government intervention, acting by increasing the number of payments in times of recession and reducing them in times of economic expansion. Automatic stabilizers operate on the basis of state regulations, although their nature, size and effect have not yet been well defined in the empirical literature. The overall picture obtained in this study by researching the types of fiscal policies has allowed us to understand their functionality and the effects they can produce in the economy.

Keywords: discretionary fiscal policy; automatic stabilizer; expansionary fiscal policy; contractionary fiscal policy (search for similar items in EconPapers)
JEL-codes: E61 E62 H30 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ora:journl:v:1:y:2020:i:2:p:257-264

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