AN OPTIMALITY ASSESSMENT OF THE FISCAL CONSOLIDATION PROCESS INITIATED BY ROMANIA IN 2010

Bogdan Dumitrescu

Studii Financiare (Financial Studies), 2015, vol. 19, issue 1, 8-20

Abstract: The manifestation of the economic and financial crisis consequences in Romania at the end of 2008 coincided with the accumulation of severe imbalances in terms of public finances position and current account balance. The inevitable decision of the Romanian authorities to implement a program of fiscal consolidation in 2010 raised the question of its optimality in terms of size and composition, namely the mix between the modification of different categories of revenues and expenditures. The present study calculated the short and medium term need for fiscal adjustment existent in 2009 and also compared the structure of the chosen fiscal consolidation package with the one indicated by the best practices from the literature. The paper concludes that, although the fiscal consolidation program has been successful in correcting the fiscal imbalances, its quality in terms of composition was an average one.

Keywords: fiscal consolidation; economic growth; equity; crisis management (search for similar items in EconPapers)
JEL-codes: H12 H23 H68 (search for similar items in EconPapers)
Date: 2015
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