Budget consolidation in a small open economy: a case study for Slovenia
Dmitri Blueschke (),
Klaus Weyerstrass (),
Andrej Srakar () and
Miroslav Verbič ()
Post-Communist Economies, 2019, vol. 31, issue 3, 325-348
In this article, we use the macroeconometric model SLOPOL10 to calculate simulations of the development of the Slovenian economy until 2030. Starting from the present favourable prospects of the European economies, the forecast is very optimistic but it can nevertheless be improved by optimal fiscal policies as calculated using the OPTCON2 algorithm. If a negative shock to world trade of a size comparable to the Great Recession occurs, it will entail a decline in GDP and a slow recovery. In this case, optimal fiscal policies should not act in an expansionary way as the effectiveness of fiscal policy with respect to output and employment is rather limited in a small open economy like Slovenia. Instead, the goal of budget consolidation will call for a more restrictive fiscal policy, at least if the shock is temporary.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:taf:pocoec:v:31:y:2019:i:3:p:325-348
Ordering information: This journal article can be ordered from
Access Statistics for this article
Post-Communist Economies is currently edited by Roger Clarke
More articles in Post-Communist Economies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().