EVALUATION OF THE CRITERIA FOR DETERMINING THE MEDIUM-TERM BUDGETARY OBJECTIVE

Ionel Leonida
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Ionel Leonida: Centre for Financial and Monetary Research “Victor Slavescu”, N.I.E.R., Romanian Academy, Bucharest, Romania

Journal of Financial and Monetary Economics, 2019, vol. 7, issue 1, 52-61

Abstract: The objective of this paper is to evaluate the criteria for determining the medium-term budgetary objective. In this respect, the criteria of institutional, economic and behavioral nature will be evaluated. The association of the criteria with the determinants of the medium-term budgetary objective will be done as follows: the component regarding the cost of population aging over a time horizon, we consider it the determinant of institutional nature; The potential Gross Domestic Product is considered the determining factor of economic nature, this being an important indicator in determining the medium-term budgetary objective - the structural deficit - in determining the production gap, but also with other "responsibilities"; we associate the public debt with the behavioral determinant, which is an indicator in which the historical budgetary behavior of a Member State is observed. Based on the evaluation of these criteria, strengths and vulnerabilities of the framework for determining the medium-term budgetary objective will be presented.

Keywords: public debt; budget deficit; fiscal consolidation; medium-term budgetary objective (search for similar items in EconPapers)
JEL-codes: H22 H26 H62 (search for similar items in EconPapers)
Date: 2019
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