Demand – Supply – Taxation in Times of Crisis

Timisoara Journal of Economics and Business

Socoliuc Oana Ramona¹  Pohoata Ion²  Diaconasu Delia Elena³ 

[1] Lecturer PhD, Department of Economics and International Relations, Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, Romania.;Professor PhD, Department of Economics and International Relations, Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, Romania.;Researcher PhD, Department of Research, Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, Romania.;

关键词: Fiscal policy;    Consumption;    Investment;    Vector Error Correction;    Crisis;    E12;    E62;    B23;   

DOI  :  10.1515/tjeb-2017-0006

来源: DOAJ

【 摘 要 】

The confrontation of the two doctrines, the Keynesianism and the Supply-side economics highlight that the Laffer perspective is the way to achieve solid economic growth on the long way and aims the core of an “exit from crisis” policy. Therefore, this article aims to analyze the hypothesis that a high level of taxation and public spending deters productive behavior and reduces economic growth during recessions. In other words, an easy taxation and low unproductive public spending are desirable for both, the enterprising investor and the consumer. Using the example of Romanian fiscal policy, on one side, we validated within a Vector Error Correction framework that an increase in government revenues harms consumption, investment and the level of employment, in conjunction with a procyclical behavior of fiscal authorities. On the other side, our results showed some positive effects of an increased government expenditures on consumption and employment, which can be explained by the accelerate deterioration of primary balance deficit and the Central Bank’s low interest rate. Moreover, even though the initial positive response of investment to a government spending shock is positive, this is ephemeral and nonsignificant. Our findings highlight that, in order to reach growth on the long-run in times of crisis, the Romanian economy should adopt the fiscal policy and measures suggested by the Supply-side Economics.

【 授权许可】

Unknown